Shinhokoku Material Corp. (5542) AI Stock Analysis

• Market Cap: ¥4.93B
• Dividend Yield: 2.78%
• Average Volume (3M): 5.23K
• Price to Earnings (P/E): 7.8
• Beta (1Y): 0.48
• Revenue Growth: -7.18%
• EPS Growth: 15.81%
• Country: JP
• Employees: 84
• Sector: Basic Materials
• Sector Strength: 69
• Industry: Steel
• EPS (TTM): 24.07
• Shares Outstanding: 7,020,000
• 10 Day Avg. Volume: 8,460
• 30 Day Avg. Volume: 5,230
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 78 Outperform
• Price Target: ―

The strong financial performance, highlighted by stable margins and a solid balance sheet, is the key driver of Shinhokoku Material Corp.'s stock score. The technical analysis shows a positive trend, although some caution is warranted due to near overbought indicators. The valuation is attractive, with a low P/E ratio and a decent dividend yield. These factors collectively result in a favorable stock score.

Shinhokoku Material Corp. Business Overview & Revenue Model

Company Description

Shinhokoku Material Corp. (5542) is a specialized industrial company focusing on the production and distribution of precision materials, particularly in the metal and alloy sectors. The company is known for its high-quality metal products, which are used in various industries including automotive, electronics, and machinery manufacturing. Shinhokoku Material Corp. is committed to innovation and quality, providing materials that meet the stringent requirements of its diverse clientele.

How the Company Makes Money

Shinhokoku Material Corp. generates revenue primarily through the sale of its precision metal and alloy products. The company supplies these materials to a range of industries, ensuring a steady demand for its offerings. Its key revenue streams include contracts with manufacturers in the automotive, electronics, and industrial machinery sectors, who require high-quality materials for their production processes. Additionally, the company may engage in strategic partnerships with other firms to enhance its distribution network and expand its market reach, contributing to its overall earnings.

Shinhokoku Material Corp. Financial Statement Overview

Summary

Shinhokoku Material Corp. demonstrates strong financial performance, characterized by stable margins, solid balance sheet metrics, and improving cash flows. The company's low leverage and strong equity base provide a cushion against economic fluctuations. Although revenue declined in 2024, the overall trajectory is positive, with profitability and cash flow trends pointing to a well-managed financial position. Continued focus on revenue growth and cash flow stability will be key to sustaining this performance.

Income Statement

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

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

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.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.21B	6.48B	6.36B	4.66B	3.99B
Gross Profit	1.46B	1.42B	1.42B	1.02B	804.52M
EBITDA	933.38M	792.15M	833.21M	580.65M	445.92M
Net Income	576.42M	476.04M	491.85M	322.74M	191.60M
Balance Sheet
Total Assets	7.80B	7.74B	7.28B	6.97B	6.52B
Cash, Cash Equivalents and Short-Term Investments	3.43B	2.56B	2.37B	2.55B	3.05B
Total Debt	1.11B	1.51B	1.52B	1.52B	1.58B
Total Liabilities	2.19B	2.51B	2.47B	2.50B	2.28B
Stockholders Equity	5.61B	5.24B	4.82B	4.47B	4.24B
Cash Flow
Free Cash Flow	1.29B	301.95M	-31.70M	-341.21M	614.24M
Operating Cash Flow	1.41B	497.28M	169.73M	-243.28M	674.79M
Investing Cash Flow	4.86M	-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 Price: 719.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 719 is above the 20-day moving average (MA) of 707.35, above the 50-day MA of 689.64, and above the 200-day MA of 643.67, indicating a bullish trend. The MACD of 11.77 indicates Negative momentum. The RSI at 58.02 is Neutral, neither overbought nor oversold. The STOCH value of 45.29 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5542	78 Outperform	¥4.93B	7.84		2.78%	-7.18%	15.81%
5986	73 Outperform	¥4.37B	13.26		2.05%	-0.54%	5.46%
5491	72 Outperform	¥4.93B	6.98		―	-0.22%	-54.50%
5609	69 Neutral	¥4.33B	18.37		3.37%	-10.51%	-63.75%
5446	65 Neutral	¥4.73B	8.30		5.69%	-9.72%	22.17%
Sector *	62 Neutral	$10.11B	9.76	-0.15%	2.94%	2.14%	-32.15%
5476	44 Neutral	¥5.66B	―		12.44%	0.44%	-217.04%