Nankai Plywood Co., Ltd. (7887) AI Stock Analysis

• Market Cap: ¥11.40B
• Dividend Yield: 1.66%
• Average Volume (3M): 1.40K
• Price to Earnings (P/E): 9.9
• Beta (1Y): 0.41
• Revenue Growth: 8.56%
• EPS Growth: 2690.35%
• Country: JP
• Employees: 1,810
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Furnishings, Fixtures & Appliances
• EPS (TTM): 754.52
• Shares Outstanding: 1,009,580
• 10 Day Avg. Volume: 850
• 30 Day Avg. Volume: 1,396
• PEG Ratio: -0.63
• Price to Book (P/B): 0.23
• Price to Sales (P/S): 0.23
• P/FCF Ratio: 10.07
• 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: 76 Outperform
• Price Target: ¥13,187.00 ▲(43.81% Upside)
• Action: Reiterated Date: 01/14/26
• Date: Action: Reiterated 01/14/26

The score is driven primarily by strong financial stability (high equity ratio, low leverage) and attractive valuation (low P/E). Technicals are supportive with a strong uptrend and positive MACD, but overbought signals (RSI > 70) temper the overall rating due to higher near-term reversal risk.

Positive Factors

Balance sheet strength

A very high equity ratio and low D/E provide durable financial resilience. This capital structure lowers interest burden and preserves liquidity through downturns, enabling the company to fund working capital, selective capex, and strategic initiatives without stressing solvency over the medium term.

Consistent revenue growth & improving EBITDA

Sustained top-line growth combined with an improving EBITDA margin indicates stable demand for core wood-based interior products and better cost control. These trends support persistent operating profitability, underpin reinvestment capacity and create a foundation for margin recovery and scaling over several quarters.

Solid operating cash generation

Consistent positive operating cash flow demonstrates cash conversion of earnings and supports day-to-day operations, dividends and strategic investments. Strong OCF reduces reliance on external financing and gives management flexibility to prioritize FCF improvements and capital allocation over the medium term.

Negative Factors

Modest return on equity

A high equity base coupled with only modest ROE suggests capital is underutilized. Without improvements to asset efficiency, pricing or higher-margin product mix, the company may struggle to convert its strong balance sheet into commensurate shareholder returns over the next several quarters.

Free cash flow needs further improvement

Although FCF is improving, it remains an area of focus which implies persistent demands on cash from capex or working capital. Limited FCF conversion can constrain dividends, buybacks or debt reduction and restrict strategic investments, reducing flexibility over the medium term.

Concentration in residential construction

Heavy dependence on residential construction and renovation exposes revenues and margins to housing cycles, policy shifts and capital spending variability. Limited end-market diversification increases earnings volatility risk and can impede steady growth during industry slowdowns over the next several quarters.

Nankai Plywood Co., Ltd. Business Overview & Revenue Model

Company Description

Nankai Plywood Co.,Ltd. manufactures and sells interior building materials in Japan. It offers storage, floor, and ceiling materials; and stairs, slide doors, fittings, and other products. The company was founded in 1942 and is headquartered in Takamatsu, Japan.

How the Company Makes Money

Nankai Plywood generates revenue primarily through the sale of its plywood products, which are distributed to both domestic and international markets. The company's revenue model is built on direct sales to manufacturers, wholesalers, and retailers, as well as through partnerships with construction companies and furniture makers. Key revenue streams include bulk orders for commercial construction projects, retail sales of plywood sheets, and custom wood products tailored to specific customer requirements. Additionally, Nankai Plywood benefits from long-term contracts with major clients, which provide a stable income stream and contribute to its overall financial performance.

Nankai Plywood Co., Ltd. Financial Statement Overview

Summary

Overall fundamentals are solid: revenue is growing and profitability remains healthy, supported by improving EBITDA margin. The balance sheet is strong with a high equity ratio (75.15%) and low leverage (D/E 0.17). Cash generation is positive, though free cash flow improvement and some margin/efficiency variability keep the score below the top tier.

Income Statement

Nankai Plywood Co., Ltd. demonstrates strong revenue growth with a consistent upward trend, highlighted by a recent 4.82% increase from the previous year. The gross profit margin remains robust, although the net profit margin has experienced some fluctuation, currently at a healthy level. The EBITDA margin shows improvement, indicating effective cost management. However, a slight decline in EBIT margin suggests room for operational efficiency enhancements.

Balance Sheet

The company's balance sheet is solid with a high equity ratio of 75.15%, ensuring financial stability. The debt-to-equity ratio is manageable at 0.17, reflecting prudent leverage use. Return on equity is modest, indicating potential for enhancing shareholder returns. Overall, the company maintains a strong equity position, although there is scope for improving asset utilization.

Cash Flow

Cash flow analysis reveals a positive trend in operating cash flow, indicating strong cash generation capability. The free cash flow has improved but remains a focus area for further enhancement. The operating cash flow to net income ratio is favorable, supporting earnings quality. Despite positive trends, the company should continue to focus on optimizing capital expenditures.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	25.50B	24.92B	23.77B	23.06B	21.93B	19.41B
Gross Profit	7.46B	6.98B	6.68B	6.52B	7.62B	6.71B
EBITDA	2.90B	1.89B	2.66B	1.69B	3.10B	1.85B
Net Income	535.81M	101.13M	948.71M	1.59B	1.41B	501.57M
Balance Sheet
Total Assets	32.24B	32.49B	32.25B	31.35B	27.66B	24.03B
Cash, Cash Equivalents and Short-Term Investments	2.63B	3.31B	3.51B	2.99B	3.33B	2.56B
Total Debt	4.07B	4.21B	4.66B	5.67B	2.39B	1.33B
Total Liabilities	8.08B	8.02B	8.23B	8.86B	6.81B	4.53B
Stockholders Equity	24.10B	24.41B	23.99B	22.46B	20.85B	19.50B
Cash Flow
Free Cash Flow	0.00	564.48M	1.76B	-3.12B	-250.08M	79.72M
Operating Cash Flow	0.00	2.46B	3.41B	-1.59B	1.89B	1.33B
Investing Cash Flow	0.00	-1.98B	-1.63B	-1.93B	-1.86B	-1.05B
Financing Cash Flow	0.00	-672.18M	-1.30B	2.99B	867.56M	473.86M

Nankai Plywood Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 9170.00
• 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:7887, the sentiment is Positive. The current price of 9170 is below the 20-day moving average (MA) of 11389.00, below the 50-day MA of 10363.40, and above the 200-day MA of 7743.30, indicating a bullish trend. The MACD of 561.33 indicates Positive momentum. The RSI at 61.76 is Neutral, neither overbought nor oversold. The STOCH value of 21.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7887.

Nankai Plywood Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7807	80 Outperform	¥4.22B	7.90	―	1.44%	0.65%	-39.91%
7887	76 Outperform	¥11.40B	9.87	―	1.66%	8.56%	2690.35%
7791	69 Neutral	¥3.52B	9.99	―	4.00%	11.73%	37.16%
7898	66 Neutral	¥10.04B	4.24	―	2.65%	1.11%	―
9827	64 Neutral	¥8.11B	15.54	―	4.95%	-4.68%	―
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7822	46 Neutral	¥11.31B	25.42	―	4.41%	2.78%	-88.37%