Mitsubishi Pencil Company, Limited (7976) AI Stock Analysis

• Market Cap: ¥107.80B
• Dividend Yield: 2.07%
• Average Volume (3M): 77.10K
• Price to Earnings (P/E): 15.0
• Beta (1Y): 0.81
• Revenue Growth: 6.39%
• EPS Growth: -34.84%
• 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: 74,810
• 30 Day Avg. Volume: 77,100
• 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
• EPS Forecast (FY): 148.3
• Revenue Forecast (FY): ¥91.80B

• Rating: 74 Outperform
• Price Target: ¥2,373.00 ▲(9.86% 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.

Positive Factors

Revenue Growth

The strong revenue growth indicates expanding market reach and effective sales strategies, positioning the company for sustained success in its industry.

Profitability Margins

Improved margins reflect effective cost management and operational efficiency, enhancing the company's ability to generate profits and reinvest in growth.

Balance Sheet Health

A strong balance sheet with low leverage ensures financial stability and flexibility, enabling the company to withstand economic fluctuations and invest in strategic opportunities.

Negative Factors

Decline in Free Cash Flow

A decline in free cash flow could limit the company's ability to fund new projects or return capital to shareholders, potentially impacting long-term growth prospects.

Earnings Per Share Decline

A significant decline in EPS growth suggests challenges in maintaining profitability, which could affect investor confidence and future capital raising efforts.

Cash Flow Management

Inefficient cash flow management may hinder the company's ability to optimize capital allocation, affecting its capacity to invest in growth and innovation.

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 the company efficiently utilizes its equity. Despite a decline in free cash flow, the company maintains positive cash flow ratios, suggesting operational resilience. Overall, the financial statements reflect a company well-positioned for sustained growth, although improvements in cash flow management could further 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	16.64B	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: Positive
• Last Price: 2160.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7976, the sentiment is Positive. The current price of 2160 is above the 20-day moving average (MA) of 2115.35, above the 50-day MA of 2141.44, and below the 200-day MA of 2190.54, indicating a bullish trend. The MACD of 11.48 indicates Negative momentum. The RSI at 59.30 is Neutral, neither overbought nor oversold. The STOCH value of 83.49 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	75 Outperform	¥178.72B	12.86	―	2.59%	-0.26%	3.35%
7976	74 Outperform	¥107.80B	15.00	―	2.07%	6.39%	-34.84%
7984	72 Outperform	¥421.55B	19.00	8.83%	2.24%	6.29%	8.74%
7975	70 Neutral	¥4.19B	10.43	―	2.03%	3.24%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7962	58 Neutral	¥24.12B	69.24	―	1.65%	-2.71%	―
7992	50 Neutral	¥3.02B	―	―	―	4.11%	33.06%

Mitsubishi Pencil Company, Limited Corporate Events

Mitsubishi Pencil Introduces Share-Based Remuneration Plan

Mitsubishi Pencil Company, Limited has announced the introduction of a share-based remuneration plan for its management-level employees. This initiative aims to enhance employee engagement and increase the company’s medium- to long-term corporate value by aligning management interests with stock performance. The plan involves establishing a trust to acquire company shares, which will be distributed to eligible employees, encouraging them to focus on the company’s stock price growth and corporate value enhancement.

Mitsubishi Pencil Reports Mixed Financial Results Amid Strategic Adjustments

Mitsubishi Pencil Company reported a slight increase in net sales for the nine months ending September 30, 2025, but experienced significant declines in operating and ordinary profits, as well as profit attributable to owners of the parent. Despite these challenges, the company maintains a strong equity-to-asset ratio and has announced a stable dividend forecast for the fiscal year. The inclusion of UNI LINC INDIA PRIVATE LIMITED and exclusion of Shanghai Shen Kai Ling Company Ltd. indicate strategic adjustments in its consolidation scope, reflecting ongoing efforts to optimize its business operations.