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Mitsubishi Pencil Company, Limited (JP:7976)
:7976
Japanese Market

Mitsubishi Pencil Company, Limited (7976) AI Stock Analysis

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JP

Mitsubishi Pencil Company, Limited

(7976)

Rating:73Outperform
Price Target:
Mitsubishi Pencil's overall stock score reflects its strong financial performance, with robust revenue and profitability metrics, a solid balance sheet, and prudent leverage management. The technical analysis suggests current bearish price trends, but the valuation remains attractive with a reasonable P/E ratio and decent dividend yield.

Mitsubishi Pencil Company, Limited (7976) vs. iShares MSCI Japan ETF (EWJ)

Mitsubishi Pencil Company, Limited Business Overview & Revenue Model

Company DescriptionMitsubishi Pencil Company, Limited, headquartered in Tokyo, Japan, is a renowned manufacturer specializing in writing instruments. Established in 1887, the company is best known for its 'uni' brand, which includes a wide range of products such as mechanical pencils, ballpoint pens, gel pens, markers, and other stationery items. Mitsubishi Pencil Company operates within the stationery industry, providing high-quality, innovative writing solutions to a global market.
How the Company Makes MoneyMitsubishi Pencil Company makes money primarily through the sale of its writing instruments and stationery products. The company's revenue model is centered around its 'uni' brand, which is highly regarded for its quality and innovation. Key revenue streams include domestic and international sales of mechanical pencils, gel ink pens, and other writing tools. The company leverages its strong brand recognition and extensive distribution network to reach consumers and businesses worldwide. Significant partnerships with retailers and distributors enhance its market presence, while continuous product innovation and brand loyalty contribute to sustained earnings.

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 the company efficiently utilizes its equity. Despite a decline in free cash flow, the company maintains positive cash flow ratios, suggesting operational resilience.
Income Statement
87
Very Positive
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
82
Very Positive
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
75
Positive
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
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
88.82B74.80B69.00B61.89B55.18B
Gross Profit
46.84B38.45B33.95B30.67B27.31B
EBIT
12.19B11.85B9.24B7.52B5.49B
EBITDA
21.33B17.02B13.10B10.80B8.30B
Net Income Common Stockholders
11.27B10.17B6.95B5.66B3.79B
Balance SheetCash, Cash Equivalents and Short-Term Investments
41.35B57.91B48.07B44.93B42.78B
Total Assets
176.88B145.47B130.80B123.79B114.88B
Total Debt
11.62B3.38B4.09B4.81B5.55B
Net Debt
-29.73B-54.54B-43.98B-40.12B-37.23B
Total Liabilities
46.17B28.99B25.80B26.12B23.03B
Stockholders Equity
128.36B114.29B103.09B95.88B90.07B
Cash FlowFree Cash Flow
2.51B9.91B5.70B4.40B261.00M
Operating Cash Flow
6.47B11.76B7.28B8.37B4.74B
Investing Cash Flow
-27.91B-71.00M-1.65B-3.94B-4.55B
Financing Cash Flow
4.11B-3.72B-3.90B-2.75B-3.91B

Mitsubishi Pencil Company, Limited Technical Analysis

Technical Analysis Sentiment
Negative
Last Price2073.00
Price Trends
50DMA
2260.76
Negative
100DMA
2350.67
Negative
200DMA
2374.83
Negative
Market Momentum
MACD
-56.56
Negative
RSI
37.10
Neutral
STOCH
35.70
Neutral
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 2073 is below the 20-day moving average (MA) of 2110.70, below the 50-day MA of 2260.76, and below the 200-day MA of 2374.83, indicating a bearish trend. The MACD of -56.56 indicates Negative momentum. The RSI at 37.10 is Neutral, neither overbought nor oversold. The STOCH value of 35.70 is Neutral, 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

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
€338.21B18.617.55%2.39%2.90%-14.49%
80
Outperform
¥156.29B11.02
2.90%5.42%13.99%
73
Outperform
¥109.46B10.73
2.03%20.31%6.00%
70
Neutral
¥3.88B9.42
2.19%4.74%
66
Neutral
$4.51B12.295.40%3.67%4.15%-12.21%
54
Neutral
¥24.83B167.00
1.60%1.78%-46.92%
47
Neutral
¥3.62B
6.93%33.43%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:7976
Mitsubishi Pencil Company, Limited
2,079.00
-419.57
-16.79%
JP:7846
Pilot Corporation
4,072.00
-271.25
-6.25%
JP:7962
King Jim Co., Ltd.
878.00
-5.80
-0.66%
JP:7975
LIHIT LAB., INC.
1,143.00
0.17
0.01%
JP:7992
Sailor Pen Co., Ltd.
122.00
-6.00
-4.69%
JP:7984
Kokuyo Co
3,222.00
637.69
24.68%

Mitsubishi Pencil Company, Limited Corporate Events

Mitsubishi Pencil Completes Treasury Share Acquisition and Cancellation
May 29, 2025

Mitsubishi Pencil Company has completed the acquisition and cancellation of its treasury shares as per the resolutions made in February 2025. This strategic move involved acquiring 1,000,000 common shares for approximately ¥2.39 billion and subsequently canceling these shares, which represents 1.64% of the total shares outstanding. The cancellation is scheduled for August 25, 2025, and is expected to optimize the company’s capital structure and potentially enhance shareholder value.

Mitsubishi Pencil Completes Treasury Share Disposal for Executive Remuneration
May 13, 2025

Mitsubishi Pencil Company, Limited has completed the payment procedures for the disposal of its treasury shares as part of a restricted share-based remuneration plan. This disposal involves 18,900 shares of common stock, allocated to directors and executive officers, and is valued at approximately 47.97 million JPY. This move is part of the company’s strategic efforts to align the interests of its management with those of its shareholders, potentially impacting its operational dynamics and market positioning.

Mitsubishi Pencil Advances Treasury Share Acquisition Plan
May 1, 2025

Mitsubishi Pencil Company, Limited announced the acquisition of 342,600 treasury shares between April 1 and April 30, 2025, as part of a previously resolved plan to acquire up to 1,000,000 shares. This strategic move, with a total acquisition price of ¥820,435,100, is part of the company’s ongoing efforts to manage its capital structure and potentially enhance shareholder value.

Mitsubishi Pencil Announces Treasury Share Disposal for Executive Incentives
Apr 25, 2025

Mitsubishi Pencil Company has announced the disposal of 18,900 treasury shares as part of a restricted share-based remuneration plan for its directors and executive officers. This initiative aims to align the interests of the company’s leadership with shareholders by incentivizing long-term business performance and corporate value growth.

Mitsubishi Pencil Sees Sales Growth Amid Profit Decline
Apr 25, 2025

Mitsubishi Pencil Company reported a 12.5% increase in net sales for the first quarter of 2025, despite a decline in operating and ordinary profits. The company’s financial position remains strong with a high equity-to-asset ratio, and it has included a new subsidiary, UNI LINC INDIA PRIVATE LIMITED, in its consolidation scope, indicating strategic expansion.

Mitsubishi Pencil Advances Treasury Share Acquisition Strategy
Apr 2, 2025

Mitsubishi Pencil Company announced the acquisition of 183,500 treasury shares for approximately ¥475.7 million as part of a previously resolved plan to acquire up to 1,000,000 shares. This move is part of the company’s strategy to manage its capital structure and potentially enhance shareholder value, indicating a proactive approach in financial management.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.