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

• Market Cap: ¥5.13B
• Dividend Yield: 1.64%
• Average Volume (3M): 1.65K
• Price to Earnings (P/E): 38.0
• 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): 2.74
• 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: ¥2,621.00 ▲(16.39% Upside)

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

Strong balance sheet / low leverage

A high equity ratio (69.61%) and very low debt-to-equity (0.11) give the company durable financial flexibility. This reduces refinancing and solvency risk, supports sustained investment in R&D/capex, and provides a buffer through industry cycles, aiding strategic stability over months.

Consistent revenue growth

Sustained top-line expansion (18.85% in the latest year) signals durable demand for the company’s electronic components and materials. Consistent revenue growth supports scale economics, funds ongoing product development, and strengthens market positioning over a medium-term horizon.

Improving operating cash generation

Operating cash flow has materially improved and the operating cash flow to net income ratio of 3.58 indicates high-quality earnings conversion. Strong OCF helps fund working capital, supplier payments and incremental investment even if free cash flow is currently negative.

Negative Factors

Negative free cash flow

A negative free cash flow position signals cash is being consumed by capex or working capital needs and may constrain reinvestment or shareholder returns. Persisting negative FCF can force reliance on reserves or external funding, which would erode financial flexibility over time.

Low profitability margins

Compressed margins (net margin 2.46%, EBIT 2.74%) limit the company’s ability to convert revenue into durable profits. Even with revenue growth, low operating profitability restricts cash available for R&D, capex or dividends and reduces resilience to input cost shocks.

Sharp EPS deterioration

A steep EPS decline (≈-67.6%) indicates significant earnings volatility or one-off pressures. Persistent earnings declines undermine reinvestment capacity and make forecasting cash generation harder, raising execution risk for strategic initiatives over the coming months.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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: Positive
• Last Price: 2252.00
• 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:7021, the sentiment is Positive. The current price of 2252 is below the 20-day moving average (MA) of 2450.50, below the 50-day MA of 2317.32, and above the 200-day MA of 2023.07, indicating a bullish trend. The MACD of 32.19 indicates Positive momentum. The RSI at 58.71 is Neutral, neither overbought nor oversold. The STOCH value of 68.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	¥5.44B	7.41	―	6.61%	-30.65%	-46.85%
6396	79 Outperform	¥4.79B	11.64	―	1.19%	-6.39%	-3.86%
6518	69 Neutral	¥4.85B	8.71	―	2.50%	9.07%	―
6334	68 Neutral	¥4.81B	14.91	―	1.22%	12.31%	138.05%
7021	66 Neutral	¥5.13B	38.01	―	1.64%	11.40%	-67.55%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6467	56 Neutral	¥3.22B	-8.42	―	1.81%	-3.20%	-226.19%