Naikai Zosen Corporation (7018) AI Stock Analysis

• Market Cap: ¥25.67B
• Dividend Yield: 0.27%
• Average Volume (3M): 246.03K
• Price to Earnings (P/E): 14.7
• Beta (1Y): 1.81
• 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: 66 Neutral
• Price Target: ¥16,319.00 ▲(15.25% Upside)

The overall stock score of 66 reflects a balance of positive technical momentum and reasonable valuation against financial performance concerns. The stock's upward trend and bullish technical indicators are significant strengths. However, financial challenges, particularly in cash flow management, pose risks that need addressing for long-term growth.

Positive Factors

Diversified Shipbuilding & Services

Naikai’s mix of newbuild contracts plus repair, maintenance and after-delivery engineering creates recurring revenue streams beyond one-off vessel deliveries. This diversification reduces sensitivity to new-order cyclicality and supports steadier backlog conversion and customer relationships over months.

Manageable Leverage

A moderate debt-to-equity ratio and a solid equity base provide financial flexibility to fund working capital and selective yard investments. This capital structure helps the company absorb shipping-cycle swings and pursue contract opportunities without excessive refinancing risk over the medium term.

Stable Profit Margins

Despite revenue pressures, maintained gross and net margins indicate the company retains pricing discipline and some cost control in production and service operations. Stable margins support ongoing profitability on delivered contracts and provide a base for operational improvements to enhance cash generation.

Negative Factors

Negative Operating & Free Cash Flow

Sustained negative operating and free cash flow undermines the company’s ability to self-fund capex, working capital, and debt service. Over 2–6 months this raises reliance on external financing, constrains bidding capacity for newcontracts and increases vulnerability to timing delays in progress billings.

Declining Revenues

A downward revenue trend suggests weaker newbuild order intake or lower deliveries, which reduces scale and makes fixed yard costs harder to absorb. Persisting declines can erode backlog, limit operating leverage, and pressure margins and investment capacity across upcoming quarters.

Reduced Cash Reserves / Liquidity Risk

Shrinking cash buffers limit the company’s ability to absorb contract overruns, delays, or short-term working-capital needs. Over the medium term this restricts flexibility to invest in yard upgrades or win competitively priced contracts and increases the probability of needing external funding under stressed conditions.

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

Naikai Zosen Corporation's financial health shows a combination of strengths and weaknesses. While the company maintains reasonable profitability margins, declining revenues and negative cash flows pose significant risks. The balance sheet remains stable, but liquidity issues could impact future flexibility. Addressing operational inefficiencies and enhancing cash flow management are crucial for sustainable growth.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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: Positive
• 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 16182.50, below the 50-day MA of 15363.80, and above the 200-day MA of 9844.03, indicating a neutral trend. The MACD of 56.43 indicates Positive momentum. The RSI at 54.05 is Neutral, neither overbought nor oversold. The STOCH value of 34.45 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	72 Outperform	¥281.29B	13.95	19.39%	1.36%	0.58%	-24.42%
7022	71 Outperform	¥12.62B	7.02	―	2.71%	2.02%	27.03%
6018	71 Outperform	¥13.55B	16.55	―	2.78%	38.48%	100.84%
6022	70 Outperform	¥5.90B	39.00	―	0.67%	-3.25%	45.54%
7018	66 Neutral	¥25.67B	14.72	―	0.27%	1.60%	314.05%
7003	66 Neutral	¥658.28B	27.08	13.69%	0.60%	7.78%	-53.68%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%