Mitsubishi Pencil Company, Limited (7976) AI Stock Analysis

• Market Cap: ¥104.17B
• Dividend Yield: 2.29%
• Average Volume (3M): 90.49K
• Price to Earnings (P/E): 14.2
• Beta (1Y): 0.78
• Revenue Growth: 10.66%
• EPS Growth: -37.99%
• Country: JP
• Employees: 2,800
• Sector: Industrials
• Sector Strength: 79
• Industry: Business Equipment & Supplies
• EPS (TTM): 30.84
• Shares Outstanding: 60,042,590
• 10 Day Avg. Volume: 102,430
• 30 Day Avg. Volume: 90,490
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥2,232.00
• Price Target Upside: 11.27% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 72 Outperform
• Price Target: ¥2,232.00 ▲(11.27% Upside)

Mitsubishi Pencil's overall stock score is driven by strong financial performance and reasonable valuation metrics. The company's robust revenue growth and profitability margins are significant strengths. However, the technical analysis indicates a lack of bullish momentum, which tempers the overall score. The absence of earnings call data and corporate events means these factors do not influence the score.

Mitsubishi Pencil Company, Limited Business Overview & Revenue Model

Company Description

Mitsubishi Pencil Co., Ltd. manufactures and supplies writing instruments in Japan. The company's products include pencils and colored pencils, water-based ink roller balls, oil-based ballpoint pens, mechanical pencils and refill lead, felt-tip pens and markers, and school supplies. Mitsubishi Pencil Co., Ltd. was founded in 1887 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Mitsubishi Pencil Company, Limited generates revenue primarily through the sale of its wide array of writing instruments and stationery products. The company's revenue streams are predominantly derived from product sales in both domestic and international markets. Mitsubishi Pencil has established a strong distribution network that includes direct sales, partnerships with retailers, and online platforms to reach consumers worldwide. Key revenue drivers include the popularity of its Uni-ball brand, which features a variety of pens such as gel, rollerball, and ballpoint pens, as well as mechanical pencils and markers. The company's focus on innovation, quality, and brand reputation helps maintain its competitive edge, allowing it to capture a significant share of the global stationery market. While specific financial partnerships are not publicly detailed, Mitsubishi Pencil's collaborations with retailers and distributors are crucial in expanding its market presence and accessibility to consumers.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	88.82B	74.80B	69.00B	61.89B	55.18B
Gross Profit	46.84B	38.45B	33.95B	30.67B	27.31B
EBITDA	21.33B	17.02B	13.10B	10.80B	8.30B
Net Income	11.27B	10.17B	6.95B	5.66B	3.79B
Balance Sheet
Total Assets	176.88B	145.47B	130.80B	123.79B	114.88B
Cash, Cash Equivalents and Short-Term Investments	41.35B	57.91B	48.07B	44.93B	42.78B
Total Debt	11.62B	3.38B	4.09B	4.81B	5.55B
Total Liabilities	46.17B	28.99B	25.80B	26.12B	23.03B
Stockholders Equity	128.36B	114.29B	103.09B	95.88B	90.07B
Cash Flow
Free Cash Flow	2.51B	9.91B	5.70B	4.40B	261.00M
Operating Cash Flow	6.47B	11.76B	7.28B	8.37B	4.74B
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 Price: 2006.00
• 50DMA: Negative
• 100DMA: Negative
• 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 2006 is below the 20-day moving average (MA) of 2044.95, below the 50-day MA of 2041.97, and below the 200-day MA of 2260.52, indicating a bearish trend. The MACD of -6.72 indicates Positive momentum. The RSI at 40.09 is Neutral, neither overbought nor oversold. The STOCH value of 5.00 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
7976	72 Outperform	¥104.17B	14.24		2.29%	10.66%	-37.99%
Sector *	64 Neutral	$10.96B	16.35	8.89%	1.96%	2.68%	-15.17%
KOK	―	€2.41B	18.68	7.98%	―	―	―
7846	75 Outperform	¥175.72B	12.64		2.72%	2.17%	11.48%
7975	70 Neutral	¥3.95B	10.45		2.16%	4.21%	―
7962	52 Neutral	¥23.83B	55.37		1.66%	0.22%	―
7992	44 Neutral	¥3.97B	―		―	4.61%	33.80%

Mitsubishi Pencil Company, Limited Corporate Events

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.

Mitsubishi Pencil Completes Treasury Share Acquisition and Cancellation

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

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.