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

• Market Cap: ¥10.45B
• Dividend Yield: 1.66%
• Average Volume (3M): 1.40K
• Price to Earnings (P/E): 3.0
• Beta (1Y): 0.43
• 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: ¥12,667.00 ▲(38.14% 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 leverage give the company durable financial resilience, lowering default and refinancing risk. This conservatism preserves credit capacity and strategic optionality, enabling investment in capex or M&A and cushioning cyclical housing demand shocks over months.

Revenue Growth & Margin Improvement

Consistent top-line growth alongside improving EBITDA margin indicates the business is scaling without eroding gross profitability. For a materials supplier, sustained revenue expansion plus margin uplift suggests durable demand and operational leverage that can support long-term cash generation.

Positive Cash Generation

Healthy operating cash flow and improving free cash flow signal the firm converts earnings into usable funds. That boosts ability to fund maintenance capex, moderate dividends, and working capital, underpinning financial flexibility and long-term reinvestment capacity.

Negative Factors

Modest Return on Equity

A strong equity base paired with modest ROE implies capital is not being fully monetized. Over time this can limit shareholder returns unless management improves asset turnover, pricing power, or margin expansion, making efficient capital deployment an execution risk.

Free Cash Flow Needs Further Improvement

Although FCF is trending better, continued need to strengthen free cash flow suggests lingering pressure from capex or working capital. If not resolved, constrained FCF can limit reinvestment, dividend increases, or debt reduction over multi-month horizons.

Margin Volatility / Slight EBIT Decline

Fluctuating net margins and a dip in EBIT margin point to sensitivity to input costs or operational inefficiencies. Persistent margin variability can erode operating leverage and competitiveness, requiring structural cost control to sustain profitability over time.

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 manufacture and sale of interior building-material products used in homes. Its core earnings come from selling wood-based interior components and related housing materials (e.g., interior fixtures and similar residential construction/renovation products) to business customers such as housing manufacturers, builders, and construction/renovation contractors. The company’s revenue model is therefore mainly product-sales driven: it purchases raw and semi-finished inputs, manufactures/finishes interior building materials, and sells these finished goods via direct sales and/or distribution channels to the housing supply chain. Information on segment-level revenue breakdown, major customers, or specific long-term partnerships is null.

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: Neutral
• 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 Neutral. The current price of 9170 is below the 20-day moving average (MA) of 11758.00, below the 50-day MA of 10615.40, and above the 200-day MA of 7906.50, indicating a neutral trend. The MACD of 217.21 indicates Positive momentum. The RSI at 49.28 is Neutral, neither overbought nor oversold. The STOCH value of 27.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	¥4.28B	9.67	―	1.44%	0.65%	-39.91%
7887	76 Outperform	¥10.45B	3.04	―	1.66%	8.56%	2690.35%
7791	69 Neutral	¥3.48B	10.54	―	4.00%	11.73%	37.16%
7898	66 Neutral	¥9.80B	3.19	―	2.65%	1.11%	―
9827	64 Neutral	¥8.05B	6.00	―	4.95%	-4.68%	―
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7822	46 Neutral	¥11.14B	8.82	―	4.41%	2.78%	-88.37%