Mitsubishi Pencil Company, Limited (7976) AI Stock Analysis

• Market Cap: ¥107.18B
• Dividend Yield: 2.22%
• Average Volume (3M): 63.72K
• Price to Earnings (P/E): 15.0
• Beta (1Y): 0.82
• Revenue Growth: 10.66%
• EPS Growth: -37.99%
• Country: JP
• Employees: 2,800
• Sector: Industrials
• Sector Strength: 72
• Industry: Business Equipment & Supplies
• EPS (TTM): 15.69
• Shares Outstanding: 60,042,590
• 10 Day Avg. Volume: 46,120
• 30 Day Avg. Volume: 63,716
• PEG Ratio: 1.16
• Price to Book (P/B): 0.99
• Price to Sales (P/S): 1.43
• P/FCF Ratio: 50.46
• 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

• Rating: 74 Outperform
• Price Target: ¥2,373.00 ▲(9.96% Upside)

Mitsubishi Pencil's strong financial performance is the most significant factor, driven by robust revenue growth and profitability margins. The technical analysis indicates a bearish trend, which slightly offsets the positive financial outlook. The valuation is reasonable, with a fair P/E ratio and a decent dividend yield, supporting the overall score.

Mitsubishi Pencil Company, Limited Business Overview & Revenue Model

Company Description

Mitsubishi Pencil Company, Limited (7976) is a prominent Japanese manufacturer specializing in writing instruments, stationery, and related products. Founded in 1887, the company is well-known for its innovative and high-quality products, including mechanical pencils, ballpoint pens, and permanent markers. Mitsubishi Pencil operates in various sectors, primarily focusing on office supplies, art materials, and educational tools, catering to both consumer and professional markets.

How the Company Makes Money

Mitsubishi Pencil generates revenue through the sale of its diverse product lineup, which includes writing instruments, markers, and stationery items. The company employs a multi-faceted revenue model that includes direct sales through retail channels, online platforms, and partnerships with distributors. Key revenue streams are driven by both domestic and international sales, with a significant presence in markets outside Japan. Additionally, Mitsubishi Pencil engages in strategic partnerships and collaborations with educational institutions and corporations to promote its products, further enhancing its market reach and driving sales growth.

Mitsubishi Pencil Company, Limited Financial Statement Overview

Summary

Mitsubishi Pencil demonstrates strong financial health with impressive revenue growth and profitability margins. The balance sheet is robust with low leverage, and efficient equity utilization. Despite a decline in free cash flow, the company maintains positive cash flow ratios, suggesting operational resilience. Overall, the company is well-positioned for sustained growth, though improvements in cash flow management could enhance financial performance.

Income Statement

Mitsubishi Pencil has demonstrated strong revenue growth with a significant increase from 2023 to 2024, resulting in a revenue growth rate of 18.74%. The gross profit margin has improved to 52.74%, and the net profit margin is robust at 12.69%. The EBIT and EBITDA margins are also healthy at 13.73% and 18.73%, respectively, indicating effective cost management and operational efficiency. These metrics underscore the company's profitability and growth momentum.

Balance Sheet

The balance sheet shows a solid equity base with an equity ratio of 72.58%, reflecting financial stability. The company maintains a low debt-to-equity ratio of 0.09, indicating conservative leverage. Return on Equity (ROE) is strong at 8.78%, highlighting efficient use of equity to generate profits. Overall, the balance sheet reflects a stable financial position with low leverage and good equity utilization.

Cash Flow

The company's free cash flow has decreased from 2023 to 2024, resulting in a negative growth rate of -74.68%, which is a concern. However, the operating cash flow to net income ratio remains positive at 0.57, indicating that the company generates sufficient cash from operations to cover its net income. The free cash flow to net income ratio is lower at 0.22, suggesting that while cash generation is adequate, there is room for improvement in managing capital expenditures.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	89.63B	88.82B	74.80B	69.00B	61.89B	55.18B
Gross Profit	47.38B	46.84B	38.45B	33.95B	30.67B	27.31B
EBITDA	16.31B	21.33B	17.02B	13.10B	10.80B	8.30B
Net Income	7.74B	11.27B	10.17B	6.95B	5.66B	3.79B
Balance Sheet
Total Assets	170.45B	176.88B	145.47B	130.80B	123.79B	114.88B
Cash, Cash Equivalents and Short-Term Investments	34.09B	41.35B	57.91B	48.07B	44.93B	42.78B
Total Debt	10.76B	11.62B	3.38B	4.09B	4.81B	5.55B
Total Liabilities	39.33B	46.17B	28.99B	25.80B	26.12B	23.03B
Stockholders Equity	128.64B	128.36B	114.29B	103.09B	95.88B	90.07B
Cash Flow
Free Cash Flow	0.00	2.51B	9.91B	5.70B	4.40B	261.00M
Operating Cash Flow	0.00	6.47B	11.76B	7.28B	8.37B	4.74B
Investing Cash Flow	0.00	-27.91B	-71.00M	-1.65B	-3.94B	-4.55B
Financing Cash Flow	0.00	4.11B	-3.72B	-3.90B	-2.75B	-3.91B

Mitsubishi Pencil Company, Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2158.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7976, the sentiment is Negative. The current price of 2158 is below the 20-day moving average (MA) of 2162.05, above the 50-day MA of 2134.84, and below the 200-day MA of 2208.11, indicating a bearish trend. The MACD of -6.22 indicates Positive momentum. The RSI at 43.70 is Neutral, neither overbought nor oversold. The STOCH value of 15.46 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7976.

Mitsubishi Pencil Company, Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7846	―	¥180.61B	13.00	―	2.69%	2.17%	11.48%
7976	―	¥107.18B	15.01	―	2.22%	10.66%	-37.99%
7984	―	¥379.96B	19.33	7.98%	2.51%	3.27%	-12.28%
7975	―	¥4.06B	9.98	―	2.09%	3.24%	―
Sector *	―	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7962	―	¥23.86B	55.44	―	1.67%	0.22%	―
7992	―	¥3.17B	―	―	―	4.61%	33.80%

Mitsubishi Pencil Company, Limited Corporate Events

Mitsubishi Pencil Announces Special Shareholder Benefits Post-Lamy Acquisition

Mitsubishi Pencil Company has finalized the details of special shareholder benefits following its acquisition of C. Josef Lamy GmbH. The initiative aims to enhance shareholder awareness of the LAMY brand and encourage long-term investment in the company. Eligible shareholders will receive a LAMY stationery set, including a fountain pen, ink cartridges, and a notebook, distributed in two phases in 2025 and 2026.

Mitsubishi Pencil Revises 2025 Earnings Forecast Amid Overseas Market Challenges

Mitsubishi Pencil Company has revised its earnings forecast for the fiscal year ending December 31, 2025, citing lower-than-expected net sales due to prolonged inventory adjustments in overseas markets, particularly in Europe. Despite a strong overall market, the company anticipates decreased operating profit due to reduced sales and increased expenses, including foreign exchange losses and extraordinary losses from store closures. The company remains committed to investing in brand initiatives for future growth.

Mitsubishi Pencil Updates Dividend Policy and Forecasts

Mitsubishi Pencil Company, Limited has announced a change in its dividend policy, setting a new target for a consolidated dividend payout ratio of 40%. This change is part of the company’s strategy to enhance shareholder returns and align with its medium-term management plan. The company has also determined an interim dividend of 26 yen per share for the fiscal year ending December 2025, with a revised year-end dividend forecast of 26 yen per share, resulting in a total annual dividend increase to 52 yen. This move is expected to improve capital efficiency and focus on capital costs and stock prices, benefiting stakeholders.

Mitsubishi Pencil Reports Mixed Financial Results for First Half of 2025

Mitsubishi Pencil Company reported a slight increase in net sales for the first half of 2025, but experienced declines in operating and ordinary profits compared to the previous year. The company has revised its earnings forecast for the full fiscal year, anticipating a decrease in profits, and has made significant changes in its consolidation scope, including the addition and exclusion of certain subsidiaries.