Nihon Denkei Co., Ltd. (9908) AI Stock Analysis

• Market Cap: ¥29.21B
• Dividend Yield: 3.96%
• Average Volume (3M): 7.16K
• Price to Earnings (P/E): 4.8
• Beta (1Y): 0.61
• Revenue Growth: 13.63%
• EPS Growth: 17.47%
• Country: JP
• Employees: 1,166
• Sector: Industrials
• Sector Strength: 72
• Industry: Rental & Leasing Services
• EPS (TTM): 118.54
• Shares Outstanding: 11,818,507
• 10 Day Avg. Volume: 4,600
• 30 Day Avg. Volume: 7,163
• PEG Ratio: 3.34
• Price to Book (P/B): 0.70
• Price to Sales (P/S): 0.17
• P/FCF Ratio: -635.10
• 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: 79 Outperform
• Price Target: ¥3,033.00 ▲(33.61% Upside)
• Action: Reiterated Date: 02/11/26
• Date: Action: Reiterated 02/11/26

The score is driven primarily by strong financial performance (good growth and profitability with a stable balance sheet) and attractive valuation (low P/E and solid dividend yield). The main constraint is weaker cash flow quality and technically overextended momentum, which increases near-term pullback risk despite the broader uptrend.

Positive Factors

Consistent revenue growth

Sustained double-digit revenue growth (11.7% year-over-year) signals durable demand for Nihon Denkei's services. Over a 2–6 month horizon this supports recurring lease revenues, enables reinvestment in assets and services, and underpins longer-term planning and contract stability.

Healthy operating margins

Stable gross and operating margins indicate effective cost control and pricing discipline in a capital-intensive rental business. Sustained margins provide structural earnings resilience across cycles, funding maintenance capex and service quality while preserving operating cash generation capacity.

Moderate leverage and solid equity base

A moderate debt-to-equity ratio with a 40% equity ratio and near-10% ROE denotes a stable capital structure and efficient use of shareholder funds. This balance supports access to financing and long-term asset investment while limiting excessive leverage risk in the leasing model.

Negative Factors

Weak free cash flow

Negative free cash flow growth and declining operating cash flow reduce the company's ability to self-fund capex, pay down debt, or sustain dividends without external financing. Over months this can constrain strategic investments and raise refinancing or liquidity risks.

Rising total debt levels

An increase in absolute debt levels, even with moderate leverage ratios, elevates interest and refinancing exposure. In a capital-intensive rental business higher debt can limit flexibility for fleet renewal or growth and magnify earnings pressure if margins compress.

Thin net profit margin

A low net margin (2.45%) leaves limited buffer against demand shocks or rising costs in the leasing industry. Over a multi-month horizon thin profitability constrains retained earnings growth, reduces shock absorption capacity, and heightens reliance on operating scale or external funding.

Nihon Denkei Co., Ltd. Business Overview & Revenue Model

Company Description

Nihon Denkei Co.,Ltd. trades in electronic measuring instruments in Japan and internationally. The company manufactures, distributes, leases, and rents electronic measuring instruments, system equipment, electronic parts, etc. It also provides communication measuring instruments, computers and computer supplies, automate and labor-saving machines, physics and chemistry measuring equipment, industrial application instruments, production process measuring instruments, environmental testing instruments, photonic measuring instruments, educational laboratory equipment, power supplies, electronic components, and mechanical parts. In addition, the company plans, designs, and manufactures software products and testing jigs; and rents and leases measuring instruments and used goods. Further, it is involved in contracting business, including earthworks, steel structural constructions, and interior finishing works. Nihon Denkei Co.,Ltd. was founded in 1950 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Nihon Denkei generates revenue through the production and sale of its electronic components and systems. Key revenue streams include direct sales to original equipment manufacturers (OEMs) and distributors, as well as contracts with large enterprises in need of customized electronic solutions. The company benefits from strategic partnerships with major technology firms and automotive manufacturers, which enhance its market reach and product development capabilities. Additionally, Nihon Denkei invests in research and development to innovate new products, thereby creating additional revenue opportunities through advanced technology offerings in the rapidly evolving electronics market.

Nihon Denkei Co., Ltd. Financial Statement Overview

Summary

Strong profitability and growth (revenue +11.70% YoY; stable margins), supported by a solid balance sheet (debt-to-equity 0.51; ROE 9.95%). The main offset is weaker cash flow quality, with declining operating cash flow and negative free cash flow growth.

Income Statement

Nihon Denkei Co., Ltd. demonstrates strong income statement performance with consistent revenue growth, indicated by a revenue growth rate of 11.70% from 2024 to 2025. The company maintains a healthy gross profit margin of 13.97% in 2025, slightly improved from the previous year. Net profit margin remains stable at 2.45%, showcasing reliable profitability. EBIT and EBITDA margins are robust at 3.91% and 4.57%, respectively, reflecting effective cost management and operational efficiency.

Balance Sheet

The balance sheet exhibits strong equity support with a debt-to-equity ratio of 0.51 in 2025, indicating moderate leverage. Return on equity is healthy at 9.95%, demonstrating effective use of shareholder funds. The equity ratio of 40.30% reflects a stable capital structure. However, total debt levels have increased, which could pose potential risks if not managed carefully.

Cash Flow

Cash flow performance shows some challenges, with a decline in operating cash flow and negative free cash flow growth. The free cash flow to net income ratio is negative, indicating insufficient cash generation to cover net income. However, the operating cash flow to net income ratio is slightly positive, suggesting operational activities still contribute to cash flow generation.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	123.65B	121.24B	108.54B	104.78B	91.86B	82.67B
Gross Profit	17.14B	16.93B	15.47B	13.79B	11.45B	9.69B
EBITDA	5.18B	5.54B	5.57B	4.71B	3.95B	2.59B
Net Income	2.63B	2.97B	2.95B	2.91B	2.25B	1.47B
Balance Sheet
Total Assets	63.51B	74.16B	66.06B	64.11B	56.64B	50.96B
Cash, Cash Equivalents and Short-Term Investments	6.61B	10.26B	7.90B	8.43B	8.17B	7.28B
Total Debt	16.52B	15.22B	12.51B	14.63B	11.95B	9.43B
Total Liabilities	33.85B	43.46B	37.86B	38.11B	32.85B	29.31B
Stockholders Equity	28.88B	29.89B	27.41B	25.23B	23.04B	20.83B
Cash Flow
Free Cash Flow	0.00	-32.90M	3.13B	-1.54B	-1.07B	4.06B
Operating Cash Flow	0.00	251.24M	3.60B	-96.77M	-539.21M	4.57B
Investing Cash Flow	0.00	309.92M	-764.62M	-1.24B	-280.79M	-311.41M
Financing Cash Flow	0.00	1.51B	-3.54B	1.45B	1.47B	-2.24B

Nihon Denkei Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2270.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9908, the sentiment is Neutral. The current price of 2270 is below the 20-day moving average (MA) of 2577.85, below the 50-day MA of 2513.50, and above the 200-day MA of 2190.17, indicating a neutral trend. The MACD of 3.93 indicates Positive momentum. The RSI at 43.84 is Neutral, neither overbought nor oversold. The STOCH value of 42.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:9908.

Nihon Denkei Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9908	79 Outperform	¥29.21B	4.79	―	3.96%	13.63%	17.47%
9699	79 Outperform	¥121.00B	9.20	―	2.85%	8.02%	4.39%
7081	76 Outperform	¥14.16B	7.37	―	3.03%	5.72%	60.38%
8596	68 Neutral	¥31.98B	8.57	―	4.66%	-13.01%	9.74%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
5834	58 Neutral	¥45.31B	6.79	―	3.90%	0.17%	58.30%