Nitchitsu Co., Ltd. (7021) AI Stock Analysis

• Market Cap: ¥4.84B
• Dividend Yield: 1.64%
• Average Volume (3M): 1.65K
• Price to Earnings (P/E): 42.8
• Beta (1Y): 0.43
• Revenue Growth: 11.40%
• EPS Growth: -67.55%
• Country: JP
• Employees: 276
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 3.46
• Shares Outstanding: 2,130,000
• 10 Day Avg. Volume: 1,540
• 30 Day Avg. Volume: 1,653
• PEG Ratio: 9.41
• Price to Book (P/B): 0.30
• Price to Sales (P/S): 0.34
• P/FCF Ratio: -23.43
• 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: ¥2,538.00 ▲(12.70% Upside)
• Action: Downgraded Date: 11/18/25
• Date: Action: Downgraded 11/18/25

Nitchitsu Co., Ltd. shows a solid financial foundation with strong revenue growth and a stable balance sheet, which are the most significant factors in its score. Technical analysis indicates a positive trend but lacks strong momentum. Valuation metrics suggest the stock may be overvalued, which slightly offsets the positive financial performance.

Positive Factors

Balance Sheet Health

A 69.61% equity ratio and very low debt-to-equity (0.11) provide durable financial resilience. Low leverage reduces insolvency risk, preserves borrowing capacity for capex or R&D, and supports stability through industry cycles, enabling long-term strategic investments.

Revenue Growth Trend

Sustained revenue growth (18.85% in the latest year) signals durable demand for the company’s electronic components and materials. Persistent top-line expansion supports scale economies, strengthens customer relationships, and underpins continued investment in product development and capacity.

Operating Cash Generation

An operating cash flow to net income ratio of 3.58 indicates the core business converts earnings into cash efficiently. Robust operating cash supports working capital needs, funds ongoing operations and R&D, and provides a foundation for longer-term financial flexibility despite other cash pressures.

Negative Factors

Free Cash Flow Shortfall

Negative free cash flow implies capital expenditures or investments exceed cash from operations, limiting distributable cash and forcing reliance on financing or equity for growth. Over months, this constrains share buybacks, dividend growth, and reduces buffer against downturns.

Low Profitability Margins

Thin net margins (2.46%) and moderate EBITDA (8.20%) suggest limited pricing power or cost structure inefficiencies. Persistently low margins reduce retained earnings for reinvestment, make returns sensitive to revenue shocks, and constrain long-term shareholder returns compared with higher-margin peers.

Earnings Volatility

A steep EPS decline (-72.81%) reflects volatility or one-off hits to profitability, undermining predictability of earnings. For investors and management, such swings complicate planning, impair confidence in dividend sustainability, and may necessitate strategic changes to restore stable profitability.

Nitchitsu Co., Ltd. Business Overview & Revenue Model

Company Description

Nitchitsu Co., Ltd. manufactures and sells industrial machinery in Japan. The company designs and manufactures marine equipment, air preheating machines, and other general industrial machinery; installs, constructs, and supervises machinery; and manufactures plant-related equipment. It also purchases and sells silica sand, gravel, sand, and crushed stone; and manufactures and sells purified silica powder, etc. In addition, the company engages in the leasing of office buildings; and manufacture and sale of heat-resistant paints; and processing and sale of natural rubber products. Nitchitsu Co., Ltd. was incorporated in 1950 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Nitchitsu Co., Ltd. generates revenue through the production and sale of its electronic components and materials. The company's primary revenue streams include the sale of semiconductors, which are essential for various electronic devices, as well as specialized materials used in industrial applications. Nitchitsu has established significant partnerships with major technology firms and manufacturers, which help to facilitate steady demand for its products. Additionally, the company invests in research and development to create innovative solutions that meet emerging market needs, further enhancing its revenue potential.

Nitchitsu Co., Ltd. Financial Statement Overview

Summary

Nitchitsu Co., Ltd. demonstrates a solid financial foundation with steady revenue growth and strong equity. While profitability metrics suggest room for improvement, the company effectively manages its debt levels. Cash flow challenges are evident, but operational cash generation remains strong. Overall, the company is well-positioned but should focus on enhancing profitability and cash flow stability.

Income Statement

Nitchitsu Co., Ltd. has shown a consistent increase in revenue over the past few years, with a revenue growth rate of 18.85% in the latest year. The gross profit margin stands at 12.44%, indicating efficient cost management. However, the net profit margin is relatively low at 2.46%, suggesting room for improvement in profitability. The EBIT margin is 2.74%, and the EBITDA margin is 8.20%, reflecting moderate operational efficiency.

Balance Sheet

The company maintains a strong equity position with an equity ratio of 69.61%, indicating financial stability. The debt-to-equity ratio is low at 0.11, which minimizes financial risk. Return on equity is modest at 2.15%, highlighting potential for increased shareholder returns.

Cash Flow

Cash flow analysis reveals a challenging picture with a negative free cash flow, though there is a significant improvement in operating cash flow. The operating cash flow to net income ratio is 3.58, indicating strong cash generation relative to net income. However, the free cash flow to net income ratio is negative, suggesting cash constraints.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	10.02B	9.85B	8.29B	8.02B	7.86B	8.47B
Gross Profit	1.26B	1.23B	1.22B	928.60M	1.03B	1.22B
EBITDA	828.67M	808.18M	743.52M	131.36M	308.89M	187.29M
Net Income	227.97M	241.95M	247.57M	-540.13M	-121.40M	-82.33M
Balance Sheet
Total Assets	16.69B	16.14B	15.36B	14.99B	14.99B	15.30B
Cash, Cash Equivalents and Short-Term Investments	2.90B	2.67B	2.71B	4.41B	4.34B	4.84B
Total Debt	1.17B	1.26B	1.22B	1.26B	1.24B	1.28B
Total Liabilities	5.28B	4.91B	4.62B	4.71B	4.13B	4.36B
Stockholders Equity	11.41B	11.23B	10.73B	10.28B	10.86B	10.94B
Cash Flow
Free Cash Flow	0.00	-143.64M	-1.44B	-311.55M	-410.82M	583.28M
Operating Cash Flow	0.00	866.32M	-515.64M	241.20M	58.36M	950.06M
Investing Cash Flow	0.00	-877.36M	-895.23M	-137.04M	-496.27M	-101.58M
Financing Cash Flow	0.00	-30.99M	-288.90M	-33.92M	-60.45M	-92.69M

Nitchitsu Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2252.00
• 50DMA: Negative
• 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:7021, the sentiment is Neutral. The current price of 2252 is below the 20-day moving average (MA) of 2416.05, below the 50-day MA of 2371.46, and above the 200-day MA of 2071.03, indicating a neutral trend. The MACD of -12.30 indicates Positive momentum. The RSI at 45.00 is Neutral, neither overbought nor oversold. The STOCH value of 30.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:7021.

Nitchitsu Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6360	79 Outperform	¥5.59B	11.49	―	6.61%	-30.65%	-46.85%
6396	79 Outperform	¥5.16B	15.43	―	1.19%	-6.39%	-3.86%
6518	69 Neutral	¥5.83B	8.98	―	2.50%	9.07%	―
6334	68 Neutral	¥4.78B	27.85	―	1.22%	12.31%	138.05%
7021	66 Neutral	¥4.84B	42.83	―	1.64%	11.40%	-67.55%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6467	56 Neutral	¥3.29B	-8.59	―	1.81%	-3.20%	-226.19%