Otani Kogyo Co., Ltd. (5939) AI Stock Analysis

• Market Cap: ¥4.97B
• Dividend Yield: 0.55%
• Average Volume (3M): 1.71K
• Price to Earnings (P/E): 17.6
• Beta (1Y): 0.44
• Revenue Growth: -3.52%
• EPS Growth: -32.97%
• Country: JP
• Employees: 177
• Sector: Industrials
• Sector Strength: 72
• Industry: Electrical Equipment & Parts
• EPS (TTM): 51.77
• Shares Outstanding: 780,000
• 10 Day Avg. Volume: 520
• 30 Day Avg. Volume: 1,713
• PEG Ratio: 1.23
• Price to Book (P/B): 1.17
• Price to Sales (P/S): 0.61
• P/FCF Ratio: 11.17
• 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
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 65 Neutral
• Price Target: ¥6,988.00 ▲(34.90% Upside)

The score is primarily driven by solid financial stability (low leverage) but offset by deteriorating profitability and especially weak cash flow metrics. Technicals are supportive due to strong trend and positive MACD, though overbought RSI/Stoch temper the outlook. Valuation is middling with a modest P/E and low dividend yield.

Positive Factors

Balance Sheet Strength

A low debt-to-equity ratio indicates financial stability and low leverage, providing flexibility for future investments and growth opportunities.

Product Quality and Innovation

Commitment to quality and innovation enhances competitive advantage and customer loyalty, supporting long-term revenue stability.

Diverse Revenue Streams

Diversified revenue streams across multiple sectors reduce dependency on a single market, enhancing resilience against sector-specific downturns.

Negative Factors

Declining Revenue Growth

Negative revenue growth suggests challenges in market demand or competitive pressures, potentially impacting future profitability and market position.

Weak Cash Flow Generation

Declining cash flow generation limits the company's ability to reinvest in growth opportunities and may affect liquidity and financial health.

Decreasing Profit Margins

Reduced profit margins indicate rising costs or pricing pressures, which can erode profitability and affect long-term financial performance.

Otani Kogyo Co., Ltd. Business Overview & Revenue Model

Company Description

Otani Kogyo Co., Ltd. (5939) is a Japanese company primarily engaged in the manufacturing and sales of various types of industrial equipment and materials. The company specializes in the production of high-quality steel pipes, valves, and fittings used across multiple sectors, including construction, infrastructure, and energy. Otani Kogyo is known for its innovation in product design and commitment to quality, serving a diverse clientele both domestically and internationally.

How the Company Makes Money

Otani Kogyo Co., Ltd. generates revenue primarily through the sale of its industrial products, including steel pipes, valves, and fittings, which are essential components in various industrial applications. The company's revenue model is based on direct sales to businesses in sectors such as construction, manufacturing, and energy, where demand for reliable and durable materials is high. Key revenue streams include bulk orders from construction firms, long-term contracts with infrastructure projects, and partnerships with other manufacturers for component supply. Additionally, Otani Kogyo may benefit from exporting products to international markets, which can further enhance its earnings. The company's focus on quality and customer service, along with strategic partnerships in the industry, also contributes to its financial success.

Otani Kogyo Co., Ltd. Financial Statement Overview

Summary

Otani Kogyo Co., Ltd. shows strong revenue growth and profitability, supported by a solid balance sheet with low leverage. However, cash flow challenges, particularly in free cash flow, suggest areas for improvement in financial management. Overall, the company is well-positioned in its industry but should focus on enhancing cash flow stability.

Income Statement

Otani Kogyo Co., Ltd. demonstrates strong revenue growth with a TTM increase of 68%. The company maintains healthy gross and net profit margins of 21.8% and 4.7%, respectively. EBIT and EBITDA margins are stable at 6.1% and 7.7%, indicating efficient operational management. However, the slight decline in gross profit from the previous annual report suggests potential cost pressures.

Balance Sheet

The company has a solid balance sheet with a low debt-to-equity ratio of 0.12, indicating low leverage. Return on equity is robust at 9.3%, reflecting effective use of shareholder funds. The equity ratio stands at 55.8%, showcasing a strong capital structure. However, the slight increase in debt over the past year could be a point to monitor.

Cash Flow

Cash flow analysis reveals challenges, with a negative free cash flow growth rate of -223.7% in the TTM period. The operating cash flow to net income ratio is moderate at 0.32, suggesting adequate cash generation relative to earnings. However, the negative free cash flow indicates potential issues with capital expenditure or working capital management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.80B	7.90B	7.91B	7.19B	6.41B	6.06B
Gross Profit	1.58B	1.72B	1.55B	1.29B	1.23B	1.33B
EBITDA	522.52M	606.68M	587.22M	402.64M	352.84M	482.74M
Net Income	282.79M	369.16M	334.57M	173.88M	127.00M	206.57M
Balance Sheet
Total Assets	7.77B	7.56B	7.19B	6.23B	5.49B	5.34B
Cash, Cash Equivalents and Short-Term Investments	1.18B	1.91B	1.56B	1.16B	1.23B	1.52B
Total Debt	585.16M	478.52M	525.77M	48.00M	48.00M	48.00M
Total Liabilities	3.56B	3.49B	3.46B	2.84B	2.26B	2.21B
Stockholders Equity	4.21B	4.08B	3.73B	3.38B	3.23B	3.13B
Cash Flow
Free Cash Flow	-248.42M	428.38M	-70.72M	-42.59M	-273.54M	116.09M
Operating Cash Flow	163.44M	783.41M	183.99M	112.25M	56.95M	336.18M
Investing Cash Flow	-401.29M	-356.69M	-241.34M	-150.96M	-325.00M	-217.00M
Financing Cash Flow	-121.52M	-74.36M	451.09M	-23.39M	-28.92M	-32.63M

Otani Kogyo Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5180.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5939, the sentiment is Positive. The current price of 5180 is below the 20-day moving average (MA) of 5821.50, below the 50-day MA of 5406.60, and below the 200-day MA of 5481.25, indicating a bullish trend. The MACD of 310.25 indicates Negative momentum. The RSI at 73.42 is Negative, neither overbought nor oversold. The STOCH value of 86.25 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5939.

Otani Kogyo Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6894	76 Outperform	¥2.93B	7.29	―	3.92%	-1.32%	45.44%
6654	68 Neutral	¥6.08B	34.46	―	2.90%	-0.14%	-32.62%
5939	65 Neutral	¥4.97B	17.55	―	0.55%	-3.52%	-32.97%
5820	64 Neutral	¥2.47B	12.60	―	2.69%	2.48%	161.80%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6993	52 Neutral	¥84.23B	-21.51	―	―	-2.35%	16.12%
6943	51 Neutral	¥3.80B	-8.95	―	1.79%	-10.43%	-368.47%