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Nippon Denko Co., Ltd.
(5563)
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Rating:58Neutral
Price Target:
¥428.00
▲(23.34% Upside)
Action:Reiterated
Date:08/06/26
The score is primarily supported by a conservative balance sheet and a strong 2025 cash flow rebound, which reduce financial risk. It is held back by significant profitability compression versus prior peaks and a mixed-to-weak technical setup (below key moving averages with negative MACD), while valuation remains relatively demanding at ~28.6x earnings despite only a moderate ~2.9% dividend yield.
Positive Factors
Conservative leverage
Leverage reduced to ~0.19 provides durable financial resilience versus cyclical downturns. Lower gross debt and stronger equity cushions increase flexibility to absorb commodity-driven earnings swings, fund needed maintenance capex, and prioritize deleveraging or strategic investments without stressing liquidity.
Negative Factors
Profitability compression
A multi-year decline in net margin reflects structural pressure from weaker selling prices, higher input/energy costs or poorer mix. Such erosion reduces retained earnings and ROE, limits reinvestment capacity, and increases sensitivity to market cycles, making long-term earnings power and dividend sustainability less certain.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative leverage
Leverage reduced to ~0.19 provides durable financial resilience versus cyclical downturns. Lower gross debt and stronger equity cushions increase flexibility to absorb commodity-driven earnings swings, fund needed maintenance capex, and prioritize deleveraging or strategic investments without stressing liquidity.
Read all positive factors
Nippon Denko Co., Ltd. (5563) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥58.80B
Dividend Yield2.92%
Average Volume (3M)312.88K
Price to Earnings (P/E)28.6
Beta (1Y)0.99
Revenue Growth-3.24%
EPS Growth-39.60%
CountryJP
Employees964
SectorBasic Materials
Sector Strength58
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)14.95
Shares Outstanding137,386,470
10 Day Avg. Volume331,920
30 Day Avg. Volume312,880
Financial Highlights & Ratios
PEG Ratio-0.63
Price to Book (P/B)0.67
Price to Sales (P/S)0.61
P/FCF Ratio4.87
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Nippon Denko Co., Ltd. Business Overview & Revenue Model
Company Description
Nippon Denko Co., Ltd., together with its subsidiaries, engages in the ferroalloys, functional materials, incineration ash resource recovery, aqua solutions, and electric power businesses in Japan. The company offers ferroalloys products, includin...
How the Company Makes Money
Nippon Denko primarily makes money by manufacturing and selling ferroalloy products used by steel producers and other industrial customers. Its key revenue stream is the sale of ferromanganese and silicomanganese, where earnings are driven by ship...
Nippon Denko Co., Ltd. Financial Statement Overview
Summary
Income Statement
52
Neutral
Balance Sheet
74
Positive
Cash Flow
66
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 77.32B | 77.28B | 78.23B | 78.39B | 79.34B | 65.98B |
| Gross Profit | 13.55B | 12.49B | 13.61B | 11.35B | 15.38B | 14.36B |
| EBITDA | 9.98B | 8.83B | 10.10B | 7.64B | 11.28B | 10.56B |
| Net Income | 1.95B | 1.42B | 3.14B | 4.33B | 7.95B | 7.77B |
Balance Sheet | ||||||
| Total Assets | 98.48B | 93.41B | 104.16B | 102.54B | 104.94B | 95.89B |
| Cash, Cash Equivalents and Short-Term Investments | 6.56B | 6.02B | 5.95B | 7.87B | 8.91B | 9.78B |
| Total Debt | 16.39B | 13.82B | 17.07B | 18.55B | 21.47B | 18.00B |
| Total Liabilities | 26.80B | 22.39B | 30.48B | 31.10B | 35.72B | 31.56B |
| Stockholders Equity | 71.68B | 71.03B | 73.68B | 71.44B | 69.19B | 64.26B |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | 9.74B | 1.66B | 3.98B | 1.74B | 2.53B |
| Operating Cash Flow | 0.00 | 14.57B | 5.96B | 8.78B | 6.28B | 5.25B |
| Investing Cash Flow | 0.00 | -5.58B | -4.85B | -4.67B | -4.59B | -2.21B |
| Financing Cash Flow | 0.00 | -8.91B | -3.06B | -5.24B | -2.68B | -2.92B |
Nippon Denko Co., Ltd. Technical Analysis
Neutral
347.00
Price Trends
447.75
Negative
444.27
Negative
401.17
Positive
Market Momentum
-6.47
Negative
50.81
Neutral
56.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5563, the sentiment is Neutral. The current price of 347 is below the 20-day moving average (MA) of 420.30, below the 50-day MA of 447.75, and below the 200-day MA of 401.17, indicating a neutral trend. The MACD of -6.47 indicates Negative momentum. The RSI at 50.81 is Neutral, neither overbought nor oversold. The STOCH value of 56.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:5563.
Nippon Denko Co., Ltd. Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | ¥429.22B | 15.15 | ― | 3.26% | -6.84% | 5.08% | |
72 Outperform | ¥212.36B | 11.49 | 8.84% | 6.54% | -6.28% | 29.39% | |
63 Neutral | ¥189.25B | 17.46 | 5.08% | 1.80% | 2.78% | 24.29% | |
63 Neutral | ¥84.40B | 9.30 | ― | 3.70% | 2.94% | -16.58% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
61 Neutral | ¥468.16B | 12.92 | 7.28% | 2.99% | 4.19% | 31.79% | |
58 Neutral | ¥58.80B | 28.63 | 1.97% | 3.23% | -3.24% | -39.60% |
* Basic Materials Sector Average
JP:5563
Nippon Denko Co., Ltd.
430.00
139.51
48.02%
JP:5471
Daido Steel Co
2,300.00
1,103.34
92.20%
JP:5451
Yodogawa Steel Works
1,394.00
141.01
11.25%
JP:5482
Aichi Steel Corporation
3,195.00
826.74
34.91%
JP:5440
Kyoei Steel Ltd.
1,893.00
-236.68
-11.11%
JP:5463
Maruichi Steel Tube Ltd.
1,846.50
690.17
59.69%
Nippon Denko Co., Ltd. Corporate Events
Nippon Denko Swings to Loss but Raises 2026 Dividend Forecast
Aug 5, 2026
Nippon Denko Co., Ltd. is a Tokyo Stock Exchange-listed Japanese industrial materials manufacturer operating under Japanese GAAP. The company focuses on ferroalloys and related products for steelmaking and heavy industry, serving domestic and over...
Nippon Denko Raises Underlying Profit and Dividend Outlook Despite Affiliate Losses
Aug 5, 2026
Nippon Denko has revised its full-year 2026 consolidated earnings forecast, now projecting net sales of ¥81.1 billion and disclosing operating profit of ¥11 billion and profit attributable to owners of parent of ¥500 million. The or...
Nippon Denko to Cancel 8.69% of Outstanding Shares in Capital Efficiency Move
Aug 5, 2026
Nippon Denko Co., Ltd., listed on the TSE Prime Market under securities code 5563, operates in Japan’s industrial materials sector and is known for producing ferroalloys and related metallurgical products used by steelmakers and other heavy ...
Nippon Denko Books Large Equity-Method Loss on Ferroalloy Affiliate
Aug 5, 2026
Nippon Denko Co., Ltd., listed on the TSE Prime Market under securities code 5563, operates in the ferroalloys and related materials industry, supplying key inputs for steelmaking and other heavy industrial applications. The company’s portfo...
Nippon Denko Completes Restricted Stock Treasury Share Disposal for Executive Compensation
May 25, 2026
Nippon Denko has completed the payment procedures for the disposal of treasury shares used as restricted stock compensation, following a resolution by its Board of Directors on April 27, 2026. The transaction involves 91,800 shares of common stock...
Nippon Denko Doubles Quarterly Profit and Raises Full-Year Earnings Outlook
May 12, 2026
Nippon Denko reported consolidated net sales of ¥19.4 billion for the three months ended March 31, 2026, essentially flat year on year, while operating profit nearly doubled to ¥2.0 billion and ordinary profit surged to ¥1.1 billion...
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.