Heiwa Paper Co., Ltd. (9929) AI Stock Analysis

• Market Cap: ¥4.34B
• Dividend Yield: 2.65%
• Average Volume (3M): 1.35K
• Price to Earnings (P/E): 54.2
• Beta (1Y): 0.22
• Revenue Growth: -1.03%
• EPS Growth: -43.05%
• Country: JP
• Employees: 195
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Industrial Materials
• EPS (TTM): 1.03
• Shares Outstanding: 10,116,917
• 10 Day Avg. Volume: 1,330
• 30 Day Avg. Volume: 1,346
• PEG Ratio: -2.54
• Price to Book (P/B): 0.42
• Price to Sales (P/S): 0.26
• P/FCF Ratio: -15.90
• 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: 56 Neutral
• Price Target: ¥453.00 ▲(0.44% Upside)

Heiwa Paper Co., Ltd. has a stable financial position with consistent revenue and strong equity, but profitability and cash flow challenges weigh on its financial performance. The technical indicators suggest a neutral to slightly bearish trend, and the high P/E ratio indicates potential overvaluation. The dividend yield offers some compensation for investors.

Positive Factors

Business Model Strength

Heiwa Paper's B2B model with diverse product offerings ensures stable demand from various industries, supporting long-term revenue stability.

Balance Sheet Health

A strong balance sheet with moderate debt levels provides financial stability and supports future growth opportunities.

Operational Efficiency

Resilient EBIT and EBITDA margins indicate effective cost management and operational efficiency, crucial for long-term profitability.

Negative Factors

Profitability Challenges

Low net income and weak free cash flow conversion limit financial flexibility and could hinder reinvestment in growth initiatives.

Revenue Growth Decline

Negative revenue growth indicates potential market share loss or declining demand, posing risks to future earnings potential.

Net Profit Margin Pressure

Pressure on net profit margins due to volatile income affects overall profitability, limiting the ability to generate shareholder value.

Heiwa Paper Co., Ltd. Business Overview & Revenue Model

Company Description

Heiwa Paper Co., Ltd. (9929) is a leading manufacturer and supplier of paper products based in Japan. The company operates primarily in the paper and packaging sector, focusing on the production of high-quality paper products for various applications, including printing, packaging, and specialty paper. Heiwa Paper is known for its commitment to sustainability and innovation, offering a diverse range of products that cater to both domestic and international markets.

How the Company Makes Money

Heiwa Paper Co., Ltd. generates revenue through the sale of its wide array of paper products, which include offset paper, coated paper, and specialty papers. The company operates on a business-to-business (B2B) revenue model, supplying its products to printing companies, packaging firms, and other manufacturers in need of paper materials. Key revenue streams include bulk orders from large corporate clients, contracts with distributors, and partnerships with various industries that require sustainable paper solutions. Additionally, Heiwa Paper may earn income through value-added services such as custom paper solutions and consulting on paper usage, which enhances customer relationships and drives recurring revenue.

Heiwa Paper Co., Ltd. Financial Statement Overview

Summary

Heiwa Paper Co., Ltd. shows operational stability with consistent revenue and gross profit margins. However, profitability is hindered by low net income and free cash flow challenges. The balance sheet is strong, supporting future growth with a solid equity base. The company should focus on improving net income and free cash flow to enhance overall financial health.

Income Statement

The income statement reveals modest revenue stability with slight fluctuations over the years. The gross profit margin has been consistent, indicating a steady control over cost of goods sold. However, the net profit margin has been under pressure, largely due to volatile net income figures, which is a concern for profitability. EBIT and EBITDA margins have shown resilience, suggesting some operational efficiency.

Balance Sheet

The balance sheet is robust with a healthy equity base. The debt-to-equity ratio is moderate, reflecting balanced leverage usage. The equity ratio indicates strong asset financing through equity. Return on equity is low due to fluctuating net income, which is a point of concern. Overall, the financial position appears stable with manageable debt levels.

Cash Flow

The cash flow statement indicates challenges in generating free cash flow, as evidenced by negative figures in recent years. Operating cash flow has been relatively stable, but the conversion to free cash flow is weak, impacting financial flexibility. The operating cash flow to net income ratio suggests that operating activities are generating reasonable cash relative to earnings, but improvements are needed in capital expenditure management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	15.99B	16.03B	16.12B	16.07B	15.62B	14.61B
Gross Profit	3.28B	3.27B	3.29B	3.23B	2.92B	2.63B
EBITDA	302.41M	380.23M	355.80M	1.40B	255.83M	89.01M
Net Income	97.90M	117.03M	136.33M	874.80M	87.26M	-34.78M
Balance Sheet
Total Assets	17.77B	17.97B	18.83B	17.57B	15.77B	15.92B
Cash, Cash Equivalents and Short-Term Investments	2.62B	2.67B	2.84B	3.07B	3.32B	3.27B
Total Debt	2.35B	2.45B	2.46B	2.41B	2.15B	2.17B
Total Liabilities	7.89B	8.05B	8.74B	8.16B	7.24B	7.20B
Stockholders Equity	9.87B	9.92B	10.10B	9.41B	8.53B	8.72B
Cash Flow
Free Cash Flow	0.00	-264.78M	77.62M	-1.14B	226.19M	260.10M
Operating Cash Flow	0.00	260.77M	122.83M	121.11M	234.00M	314.25M
Investing Cash Flow	0.00	-554.34M	-13.21M	-408.28M	-13.88M	36.61M
Financing Cash Flow	0.00	-171.47M	-344.65M	43.13M	-123.12M	-85.71M

Heiwa Paper Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 451.00
• 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:9929, the sentiment is Positive. The current price of 451 is above the 20-day moving average (MA) of 448.35, above the 50-day MA of 446.12, and above the 200-day MA of 435.35, indicating a bullish trend. The MACD of 1.71 indicates Negative momentum. The RSI at 59.53 is Neutral, neither overbought nor oversold. The STOCH value of 80.95 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:9929.

Heiwa Paper Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3955	79 Outperform	¥9.89B	9.02	―	3.02%	6.70%	12.10%
3945	78 Outperform	¥4.11B	4.13	―	3.35%	1.53%	20.73%
3892	70 Outperform	¥7.87B	9.04	―	3.19%	-2.03%	-23.36%
3895	66 Neutral	¥3.11B	4.71	―	4.42%	-3.73%	-7.14%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
9929	56 Neutral	¥4.34B	54.21	―	2.65%	-1.03%	-43.05%
3168	52 Neutral	¥8.09B	―	―	3.51%	0.48%	-138.12%