Hokushin Co., Ltd. (7897) AI Stock Analysis

• Market Cap: ¥3.03B
• Dividend Yield: 1.8%
• Average Volume (3M): 219.22K
• Price to Earnings (P/E): 27.4
• Beta (1Y): 0.56
• Revenue Growth: 0.71%
• EPS Growth: -118.76%
• Country: JP
• Employees: 183
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): 1.01
• Shares Outstanding: 28,373,005
• 10 Day Avg. Volume: 188,970
• 30 Day Avg. Volume: 219,223
• PEG Ratio: -1.70
• Price to Book (P/B): 0.52
• Price to Sales (P/S): 0.29
• P/FCF Ratio: -49.78
• 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: 54 Neutral
• Price Target: ¥108.00 ▼(-2.70% Downside)
• Action: Reiterated Date: 10/28/25
• Date: Action: Reiterated 10/28/25

The overall stock score is primarily impacted by financial performance challenges, including declining profitability and revenue. Technical analysis indicates a bearish trend, and valuation concerns are significant due to a negative P/E ratio. The stable balance sheet provides some support, but overall, the stock faces headwinds.

Positive Factors

Stable balance sheet / manageable leverage

A stable balance sheet with reasonable debt-to-equity and a healthy equity ratio supports financial flexibility over months. Manageable leverage reduces refinancing risk, preserves capacity for strategic investments or cyclical downturns, and underpins long-term solvency and credibility with lenders.

Positive operating cash generation

Sustained positive operating cash flow versus net income implies core operations convert profits into cash, improving ability to fund working capital and service obligations. Even with FCF fluctuations, steady operating cash generation is a durable sign of underlying business viability.

Reported revenue growth metric

A reported ~22.6% revenue growth metric signals expanding top-line activity over the measured period. Persistent revenue expansion can drive scale advantages, support margin recovery initiatives, and provide a foundation for reinvestment in product, distribution, or efficiency improvements over the medium term.

Negative Factors

Declining profitability / margins

Negative EBIT and materially reduced net margins suggest structural pressure from costs, pricing, or product mix. Persistently weak operating profitability erodes internal funding for capex and R&D, threatens returns to shareholders, and can necessitate cost restructuring or asset sales to restore sustainable margins.

Negative free cash flow recently

A shift to negative free cash flow reduces the firm's ability to self-fund investments, dividends, or debt service without external financing. Over 2-6 months, negative FCF can force tighter capital allocation, delay growth projects, or increase reliance on borrowing, raising long-term financing risk and cost.

Severe EPS contraction

An extreme year-over-year EPS contraction points to volatile or collapsing earnings power, which often reflects structural demand decline, pricing pressure, or rising operating costs. Persistently weak EPS growth undermines reinvestment, strategic flexibility, and confidence in sustained profitability.

Hokushin Co., Ltd. Business Overview & Revenue Model

Company Description

Hokushin Co., Ltd. manufactures and sells medium density fiberboards. The company was incorporated in 1950 and is based in Kishiwada, Japan.

How the Company Makes Money

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Hokushin Co., Ltd. Financial Statement Overview

Summary

The company faces challenges in sustaining revenue and profitability, with declining margins and negative revenue growth. However, the balance sheet is stable with manageable leverage, and cash flow pressures are evident but not critical.

Income Statement

The income statement reveals a challenging revenue environment with a negative revenue growth rate over the last year. The company also experienced a significant decline in profitability as indicated by the negative EBIT margin for the most recent period. Gross profit margin remains moderate, but the net profit margin has decreased considerably. This suggests pressure on cost management and pricing strategies.

Balance Sheet

The balance sheet indicates a stable financial position with a reasonable debt-to-equity ratio, suggesting manageable leverage. The equity ratio is healthy, indicating a strong equity base relative to total assets. However, the return on equity has decreased, likely due to declining profitability, which could impact future growth.

Cash Flow

Cash flow analysis shows some strain, with free cash flow turning negative in the most recent year, indicating potential liquidity challenges. The operating cash flow to net income ratio remains positive, suggesting that the company generates cash from operations effectively. However, a decline in free cash flow growth rate highlights potential issues in sustaining capital expenditures.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	11.24B	10.22B	10.98B	12.89B	10.78B	9.11B
Gross Profit	1.38B	1.34B	1.54B	1.98B	1.74B	1.25B
EBITDA	280.50M	238.75M	428.77M	801.50M	764.51M	464.56M
Net Income	17.64M	20.34M	158.74M	332.41M	377.34M	173.72M
Balance Sheet
Total Assets	14.51B	13.73B	14.34B	14.38B	13.60B	12.68B
Cash, Cash Equivalents and Short-Term Investments	1.67B	1.68B	1.71B	1.67B	1.67B	1.81B
Total Debt	5.47B	5.02B	5.05B	5.08B	5.10B	5.13B
Total Liabilities	8.71B	7.91B	8.40B	8.59B	8.07B	7.43B
Stockholders Equity	5.80B	5.82B	5.94B	5.79B	5.54B	5.25B
Cash Flow
Free Cash Flow	0.00	-60.37M	127.14M	143.36M	-59.58M	-404.21M
Operating Cash Flow	0.00	268.67M	259.55M	463.70M	176.16M	244.21M
Investing Cash Flow	0.00	-199.89M	-80.74M	-329.76M	-243.59M	-572.15M
Financing Cash Flow	0.00	-93.31M	-144.74M	-134.40M	-71.94M	421.79M

Hokushin Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 111.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7897, the sentiment is Negative. The current price of 111 is above the 20-day moving average (MA) of 110.50, below the 50-day MA of 112.06, and below the 200-day MA of 117.14, indicating a bearish trend. The MACD of -1.28 indicates Positive momentum. The RSI at 40.92 is Neutral, neither overbought nor oversold. The STOCH value of 70.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7897.

Hokushin Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3878	64 Neutral	¥8.53B	7.60	―	1.90%	-0.17%	-37.01%
3877	62 Neutral	¥25.19B	47.50	―	3.72%	-2.18%	-77.82%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
3896	61 Neutral	¥3.91B	-10.91	―	―	11.79%	-1.56%
7808	61 Neutral	¥5.88B	7.88	―	2.57%	4.01%	-2.62%
7897	54 Neutral	¥3.03B	27.40	―	1.80%	0.71%	-118.76%
7815	42 Neutral	¥995.29M	-0.77	―	―	-3.43%	-48.08%