Nippon Denko Co., Ltd. (5563) AI Stock Analysis

• Market Cap: €35.17B
• Dividend Yield: 3.91%
• Average Volume (3M): 448.18K
• Price to Earnings (P/E): 10.1
• Beta (1Y): 0.69
• Revenue Growth: 8.87%
• EPS Growth: -10.93%
• Country: JP
• Employees: 783
• Sector: Basic Materials
• Sector Strength: 73
• Industry: Steel
• EPS (TTM): 0.18
• Shares Outstanding: 137,386,470
• 10 Day Avg. Volume: 536,540
• 30 Day Avg. Volume: 448,183
• PEG Ratio: 2.22
• Price to Book (P/B): 0.74
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 29.58
• 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: €277.39
• Price Target Upside: 8.36% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 75 Outperform
• Price Target: ¥282.00 ▲(10.16%Upside)

Nippon Denko Co., Ltd. demonstrates strong valuation metrics with a low P/E ratio and a high dividend yield, making it attractive to value and income investors. The financial performance indicates solid operational efficiency and a stable financial position despite challenges in net income and cash flow. Technical indicators show moderate bullish momentum, supporting the stock's positive outlook. However, the lack of earnings call data limits insights into management guidance and sentiment.

Nippon Denko Co., Ltd. Business Overview & Revenue Model

Company Description

Nippon Denko Co., Ltd. (5563) is a Japanese company primarily engaged in the production and sale of ferroalloys, chemical products, and environmental recycling services. The company's core products include various types of ferroalloys, such as ferromanganese and silicon manganese, which are crucial in the steel manufacturing industry. Additionally, Nippon Denko is involved in the production of chemical products and provides recycling services, contributing to environmental sustainability initiatives.

How the Company Makes Money

Nippon Denko Co., Ltd. generates revenue through the manufacturing and sale of ferroalloys, which are essential materials for steel production. The demand for these alloys is closely tied to the steel industry's performance, making it a significant revenue stream for the company. Besides ferroalloys, Nippon Denko earns income from its chemical products division, which produces a range of chemicals used in various industrial applications. The company also provides environmental recycling services, converting industrial waste into reusable resources, thus offering a revenue stream that also aligns with environmental regulations and sustainability trends. Strategic partnerships with steel manufacturers and other industrial players often enhance Nippon Denko's market position and revenue prospects.

Nippon Denko Co., Ltd. Financial Statement Overview

Summary

Nippon Denko Co., Ltd. displays solid operational metrics with improving profit margins and a robust balance sheet characterized by a strong equity position and controlled leverage. However, the decreasing net income and significant drop in free cash flow highlight potential areas for improvement. The company is in a stable financial position, but sustaining profitability and improving cash flow management will be crucial for future growth.

Income Statement

Nippon Denko Co., Ltd. shows moderate revenue growth of 2.39% from 2023 to 2024, with a notable improvement in gross profit margin at 17.39% for 2024. The net profit margin stood at 4.02% for 2024, indicating profitability, although it has seen a decrease compared to the previous year. EBIT and EBITDA margins have also improved to 8.76% and 12.91%, respectively, demonstrating enhanced operational efficiency. However, the dip in net income from 2023 suggests some challenges in sustaining net profitability.

Balance Sheet

The company maintains a strong equity base with an equity ratio of 72.07% in 2024, indicating financial stability. The debt-to-equity ratio has improved to 0.23, reflecting effective leverage management. Return on Equity (ROE) for 2024 is at 4.27%, indicating moderate returns on shareholder investments. The balance sheet reflects a healthy financial position with a good balance between assets and liabilities.

Cash Flow

The free cash flow has decreased significantly from 2023 to 2024, showing a decline of 58.39%, which could pose potential liquidity challenges. The operating cash flow to net income ratio is 1.90, suggesting strong cash generation relative to net income. The free cash flow to net income ratio is 0.53, indicating lower free cash flow generation compared to net income. Overall, while cash generation remains positive, the decline in free cash flow is a concern.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	78.23B	78.39B	79.34B	65.98B	54.00B
Gross Profit	13.61B	11.39B	15.38B	14.36B	10.62B
EBITDA	8.59B	6.40B	13.36B	8.75B	4.71B
Net Income	3.14B	4.38B	7.95B	7.77B	2.62B
Balance Sheet
Total Assets	102.20B	101.02B	104.94B	95.89B	86.17B
Cash, Cash Equivalents and Short-Term Investments	5.95B	7.87B	8.91B	9.78B	9.60B
Total Debt	17.08B	18.56B	21.47B	18.00B	19.44B
Total Liabilities	28.52B	29.32B	35.72B	31.56B	29.74B
Stockholders Equity	73.68B	71.70B	69.19B	64.26B	56.37B
Cash Flow
Free Cash Flow	1.66B	3.98B	1.74B	2.53B	5.72B
Operating Cash Flow	5.96B	8.78B	6.28B	5.25B	10.35B
Investing Cash Flow	-4.85B	-4.67B	-4.59B	-2.21B	-8.99B
Financing Cash Flow	-3.06B	-5.24B	-2.68B	-2.92B	701.00M

Nippon Denko Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 256.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5563, the sentiment is Positive. The current price of 256 is above the 20-day moving average (MA) of 248.26, above the 50-day MA of 248.96, and below the 200-day MA of 268.89, indicating a neutral trend. The MACD of 1.38 indicates Negative momentum. The RSI at 59.99 is Neutral, neither overbought nor oversold. The STOCH value of 87.88 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5563.

Nippon Denko Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5445	78 Outperform	¥50.00B	4.47		8.33%	3.74%	39.89%
5563	75 Outperform	€35.17B	10.08	4.80%	3.91%	8.87%	-10.93%
5410	72 Outperform	¥56.54B	4.99		7.24%	-7.92%	-25.47%
5449	72 Outperform	¥112.91B	34.99		1.31%	-0.60%	3.40%
5440	71 Outperform	¥97.13B	9.00		5.37%	0.58%	-21.95%
5480	64 Neutral	¥62.09B	5.02		0.97%	-4.57%	-12.17%
Sector *	44 Neutral	C$979.29M	-6.67	-13.73%	2.43%	17.55%	-32.57%

Nippon Denko Co., Ltd. Corporate Events

Nippon Denko Completes Payment for New Share Issuance

Nippon Denko Co., Ltd. has completed the payment procedures for the issuance of new shares as restricted stock compensation, which was resolved by its Board of Directors. This issuance involves 91,000 shares of common stock, with a total issuance amount of 24,115,000 yen, allocated to directors, executive officers, and executive counselors, marking a strategic move to align company leadership with shareholder interests.

Nippon Denko Reports Strong Q1 2025 Performance and Revises Forecasts

Nippon Denko Co., Ltd. reported a significant improvement in its financial performance for the first quarter of 2025, with net sales increasing by 9.4% and operating profit rising by 22.6% compared to the same period last year. The company has revised its earnings and dividend forecasts for the fiscal year ending December 31, 2025, indicating a cautious outlook amidst market uncertainties.

Nippon Denko Reports Strong Q1 2025 Performance Amid Revised Forecasts

Nippon Denko Co., Ltd. reported a significant improvement in its financial performance for the first quarter of 2025, with net sales increasing by 9.4% and operating profit rising by 22.6% compared to the previous year. Despite the positive results, the company has revised its earnings and dividend forecasts for the fiscal year, indicating caution amidst market uncertainties.

Nippon Denko Revises 2025 Earnings and Dividend Forecasts Amid Market Changes

Nippon Denko Co., Ltd. has revised its consolidated earnings forecasts for the fiscal year ending December 31, 2025, anticipating a decrease in net sales and ordinary profit due to reduced demand for steel products and fluctuations in market prices and exchange rates. The company also updated its dividend forecasts, setting an interim dividend of 5 yen per share, aligning with its strategy to return profits to shareholders, with a minimum annual dividend of 10 yen per share.

Nippon Denko Issues New Shares for Executive Compensation

Nippon Denko Co., Ltd. has announced the issuance of new shares as restricted stock compensation to its directors and executive officers, aiming to align their interests with shareholders and enhance corporate value. This move is part of a broader compensation plan designed to motivate key personnel and ensure long-term commitment, reflecting the company’s strategic focus on sustainable growth and stakeholder value.