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Shinhokoku Material Corp. (JP:5542)
:5542
Japanese Market
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Shinhokoku Material Corp. (5542) AI Stock Analysis

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JP:5542

Shinhokoku Material Corp.

(5542)

Rating:77Outperform
Price Target:
¥883.00
▲(7.68%Upside)
Shinhokoku Material Corp. shows strong financial performance, with stable financial metrics and robust cash flows as key strengths. The stock's attractive valuation further supports its appeal. However, technical indicators suggest caution due to overbought conditions, which could impact short-term price movements. Overall, the company's financial health and valuation provide a solid foundation for its stock performance.

Shinhokoku Material Corp. (5542) vs. iShares MSCI Japan ETF (EWJ)

Shinhokoku Material Corp. Business Overview & Revenue Model

Company DescriptionShinhokoku Material Corp. (5542) is a Japanese company specializing in the manufacturing and sale of non-ferrous metal products. The company focuses on producing precision components and materials essential for various industrial applications. Shinhokoku Material Corp. serves sectors such as electronics, automotive, and industrial machinery, providing high-quality materials that meet diverse customer needs.
How the Company Makes MoneyShinhokoku Material Corp. generates revenue primarily through the sale of its non-ferrous metal products and precision components. The company's key revenue streams include contracts with manufacturers in the electronics, automotive, and industrial machinery sectors. By offering specialized materials that enhance product performance and durability, Shinhokoku Material Corp. maintains strong relationships with its clients. Additionally, the company may engage in strategic partnerships and collaborations to expand its market reach and access new technologies, further contributing to its earnings.

Shinhokoku Material Corp. Financial Statement Overview

Summary
Shinhokoku Material Corp. demonstrates strong financial performance with stable margins, a solid balance sheet, and improving cash flows. The company's low leverage and strong equity base provide a cushion against economic fluctuations. Despite a revenue decline in 2024, profitability and cash flow trends are positive, indicating a well-managed financial position.
Income Statement
82
Very Positive
The income statement reflects robust financial health, with a consistent gross profit margin around 23.5% over the years. Net profit margin saw an increase from 7.5% in 2020 to 9.3% in 2024, indicating improved cost management. Revenue growth was 55.8% from 2020 to 2021, followed by more modest growth, with a slight decline in 2024 compared to 2023. EBIT and EBITDA margins have remained stable, showcasing operational efficiency. However, the recent revenue dip warrants monitoring.
Balance Sheet
88
Very Positive
The balance sheet is strong, with a low debt-to-equity ratio of 0.20 in 2024, indicating low financial leverage. The equity ratio improved to 72% in 2024, showing a solid equity base. Return on equity rose to 10.3% in 2024, reflecting effective use of equity to generate profits. The company maintains a healthy cash position, supporting its financial stability. Overall, the balance sheet highlights strong financial fundamentals with low risk.
Cash Flow
85
Very Positive
Cash flow analysis shows impressive growth, with free cash flow increasing significantly from negative in 2021 to $1.29 billion in 2024, driven by strong operating cash flow. The operating cash flow to net income ratio of 2.45 in 2024 indicates efficient cash generation relative to net income. Historically, cash flow volatility was present, but recent improvements suggest strengthening cash flow management. The focus should remain on maintaining positive cash flow trends.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue6.21B6.48B6.36B4.66B3.99B
Gross Profit1.46B1.42B1.42B1.02B804.52M
EBITDA933.38M792.15M833.21M580.65M445.92M
Net Income576.42M476.04M491.85M322.74M191.60M
Balance Sheet
Total Assets7.80B7.74B7.28B6.97B6.52B
Cash, Cash Equivalents and Short-Term Investments3.43B2.56B2.37B2.55B3.05B
Total Debt1.11B1.51B1.52B1.52B1.58B
Total Liabilities2.19B2.51B2.47B2.50B2.28B
Stockholders Equity5.61B5.24B4.82B4.47B4.24B
Cash Flow
Free Cash Flow1.29B301.95M-31.70M-341.21M614.24M
Operating Cash Flow1.41B497.28M169.73M-243.28M674.79M
Investing Cash Flow4.86M-197.63M-201.11M-97.33M-60.55M
Financing Cash Flow-554.29M-104.26M-151.80M-160.38M-193.40M

Shinhokoku Material Corp. Technical Analysis

Technical Analysis Sentiment
Positive
Last Price820.00
Price Trends
50DMA
720.69
Positive
100DMA
694.93
Positive
200DMA
659.30
Positive
Market Momentum
MACD
29.94
Negative
RSI
73.74
Negative
STOCH
68.06
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5542, the sentiment is Positive. The current price of 820 is above the 20-day moving average (MA) of 765.20, above the 50-day MA of 720.69, and above the 200-day MA of 659.30, indicating a bullish trend. The MACD of 29.94 indicates Negative momentum. The RSI at 73.74 is Negative, neither overbought nor oversold. The STOCH value of 68.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5542.

Shinhokoku Material Corp. Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
¥5.58B8.88
2.46%-7.18%15.81%
73
Outperform
¥4.46B13.54
2.01%-0.54%5.46%
72
Outperform
¥4.84B6.88
-0.22%-54.50%
69
Neutral
¥4.22B17.88
3.43%-10.51%-63.75%
65
Neutral
¥4.77B8.36
3.62%-9.72%22.17%
63
Neutral
$10.60B10.341.36%2.89%2.35%-33.38%
45
Neutral
¥5.82B
12.44%0.44%-217.04%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:5542
Shinhokoku Material Corp.
820.00
180.00
28.13%
JP:5446
Hokuetsu Metal Co., Ltd.
1,233.00
-191.47
-13.44%
JP:5476
Nippon Koshuha Steel Co., Ltd.
397.00
-53.00
-11.78%
JP:5491
Nippon Kinzoku Co., Ltd.
723.00
-61.00
-7.78%
JP:5609
Nippon Chuzo K.K.
875.00
-76.38
-8.03%
JP:5986
Molitec Steel Co., Ltd.
199.00
-20.23
-9.23%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 10, 2025