Naikai Zosen Corporation (7018) AI Stock Analysis

• Market Cap: ¥29.73B
• Dividend Yield: 0.27%
• Average Volume (3M): 246.03K
• Price to Earnings (P/E): 17.4
• Beta (1Y): 1.77
• Revenue Growth: 1.60%
• EPS Growth: 314.05%
• Country: JP
• Employees: 628
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 287.70
• Shares Outstanding: 2,253,000
• 10 Day Avg. Volume: 123,300
• 30 Day Avg. Volume: 246,030
• PEG Ratio: -0.17
• Price to Book (P/B): 0.87
• Price to Sales (P/S): 0.21
• P/FCF Ratio: -1.44
• 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: 63 Neutral
• Price Target: ¥18,680.00 ▲(31.92% Upside)
• Action: Reiterated Date: 02/06/26
• Date: Action: Reiterated 02/06/26

The score is primarily held back by weakening fundamentals—declining revenue and negative operating/free cash flow—despite a moderately stable balance sheet. Valuation is supportive (P/E 16.70 with a high dividend yield), while technical signals are neutral with price below short-term averages.

Positive Factors

Stable profitability margins

Despite a revenue dip, gross and net margins are reported as stable, indicating the company maintains pricing or cost control. Stable margins help sustain earnings through shipbuilding cycles, supporting medium-term profitability as contracts are executed and deliveries proceed.

Manageable leverage

A D/E of 0.52 and reasonable equity ratio point to moderate leverage and a solid equity base. This balance sheet profile provides financial flexibility to fund multi-year shipbuilding projects and absorb cyclical swings without immediate refinancing stress over the next several quarters.

Recurring repair and after-sales revenue

The business mixes newbuild contracts with repair, maintenance and after-delivery services, which are more recurring and less lumpy. This service revenue diversifies cash flow, strengthens customer ties, and smooths income volatility inherent in newbuild order timing over the medium term.

Negative Factors

Declining revenue trend

A year-over-year top-line decline signals weakening demand or delivery timing issues in a cyclical shipbuilding market. Lower revenue reduces scale benefits and puts pressure on margins and fixed-cost absorption, threatening earnings durability over the next several quarters if demand or orders don't recover.

Negative operating and free cash flow

Sustained negative operating and free cash flow limit the firm's ability to self-fund working capital and capex for yards. Over time this can force external financing, constrain reinvestment in facilities, and reduce resilience to contract cost overruns or slower delivery schedules.

Decreasing cash reserves / liquidity concerns

A material drop in cash reserves weakens the liquidity buffer needed for long-cycle builds and unexpected warranty or repair costs. Reduced cash increases refinancing and operational risk, limiting flexibility to support bids, accept new contracts, or absorb timing mismatches over the medium term.

Naikai Zosen Corporation Business Overview & Revenue Model

Company Description

Naikai Zosen Corporation engages in shipbuilding business in Japan. The company constructs ferries, container ships, product tankers, bulk carriers, general cargo ships, car carriers, refrigerated cargo ships, ro-ro ships, research vessels, investigation and patrol vessels, LPG/LAG/LEG tankers, chemical tankers, and others. It is also involved in the repair and remodeling of ships and governmental vessels. Naikai Zosen Corporation was founded in 1940 and is headquartered in Onomichi, Japan.

How the Company Makes Money

Naikai Zosen Corporation generates revenue primarily through the construction of ships and marine vessels, which constitutes its main revenue stream. The company enters into contracts with shipping companies and other commercial entities to build customized vessels according to specific requirements. Additionally, Naikai Zosen earns income from the repair and maintenance services offered to existing vessels. Another significant revenue source includes the sale of marine equipment and components, which are essential for the operation of ships. The company may also engage in partnerships with other firms for joint ventures in shipbuilding projects or engineering services, which can enhance its market reach and profitability. Fluctuations in global shipping demand, regulatory changes, and advancements in marine technology also influence its earnings.

Naikai Zosen Corporation Financial Statement Overview

Summary

Mixed fundamentals: revenue declined (46.38B to 44.65B JPY) and cash generation is weak with negative operating cash flow and free cash flow, offset by stable profitability margins and a moderately solid balance sheet (D/E 0.52).

Income Statement

The company shows a mixed performance with a declining revenue trend, dropping from 46.38 billion to 44.65 billion JPY in the latest year. However, profitability metrics like Gross Profit Margin (5.70%) and Net Profit Margin (2.28%) remain stable. The decline in EBIT and EBITDA margins indicates potential operational inefficiencies.

Balance Sheet

The balance sheet reflects moderate financial stability with a Debt-to-Equity Ratio of 0.52, indicating manageable leverage. The Equity Ratio is at 25.55%, suggesting a solid equity base. However, there is a notable decrease in cash reserves, highlighting potential liquidity concerns.

Cash Flow

The cash flow statement reveals significant issues, with negative Free Cash Flow and Operating Cash Flow in the latest year. Free Cash Flow has decreased dramatically, indicating potential cash management problems. The company may face challenges in sustaining operations without improving cash flow generation.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	41.38B	44.65B	46.38B	37.62B	33.03B	31.12B
Gross Profit	2.83B	2.54B	4.38B	1.93B	1.62B	244.00M
EBITDA	2.27B	2.06B	4.00B	1.60B	1.27B	103.00M
Net Income	1.20B	1.02B	2.26B	737.00M	143.00M	-971.00M
Balance Sheet
Total Assets	42.34B	42.49B	43.82B	40.20B	36.81B	34.04B
Cash, Cash Equivalents and Short-Term Investments	11.63B	4.70B	14.80B	9.31B	16.28B	7.45B
Total Debt	4.19B	5.68B	8.96B	9.41B	9.71B	9.98B
Total Liabilities	31.15B	31.63B	34.08B	32.78B	30.02B	27.27B
Stockholders Equity	11.18B	10.86B	9.74B	7.43B	6.79B	6.78B
Cash Flow
Free Cash Flow	0.00	-6.58B	5.96B	-7.88B	9.28B	-5.61B
Operating Cash Flow	0.00	-5.38B	6.75B	-6.38B	10.78B	-4.10B
Investing Cash Flow	0.00	-1.20B	-824.00M	-249.00M	-1.68B	-1.53B
Financing Cash Flow	0.00	-3.44B	-528.00M	-359.00M	-278.00M	1.71B

Naikai Zosen Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 14160.00
• 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:7018, the sentiment is Positive. The current price of 14160 is below the 20-day moving average (MA) of 16470.50, below the 50-day MA of 15872.20, and above the 200-day MA of 10879.27, indicating a bullish trend. The MACD of 414.02 indicates Negative momentum. The RSI at 57.93 is Neutral, neither overbought nor oversold. The STOCH value of 44.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7018.

Naikai Zosen Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7014	75 Outperform	¥386.86B	20.27	19.39%	1.36%	0.58%	-24.42%
7003	72 Outperform	¥794.33B	27.16	13.69%	0.60%	7.78%	-53.68%
6018	71 Outperform	¥15.87B	19.37	―	2.78%	38.48%	100.84%
6022	70 Outperform	¥4.99B	77.98	―	0.67%	-3.25%	45.54%
7022	70 Outperform	¥15.13B	8.42	―	2.71%	2.02%	27.03%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7018	63 Neutral	¥29.73B	17.45	―	0.27%	1.60%	314.05%