Nippon Sanso Holdings Corporation (4091) AI Stock Analysis

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Nippon Sanso Holdings Corporation

(TSE/TYO:4091)

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Rating:73Outperform

Price Target:JPY 6,478.00▲(7.98% Upside)

Action:upgraded

Date:11/05/26

The score is driven primarily by solid financial performance—especially sustained margin improvement and improving leverage—offset by only moderate and recently weakening cash-flow conversion. Technicals add support with a clear uptrend and positive momentum, while valuation is neutral-to-slightly limiting due to a moderate P/E and low dividend yield.

Positive Factors

Sustained margin expansionMeaningful multi-year expansion in gross and net margins indicates stronger profitability and operating leverage. This gives Nippon Sanso greater capacity to absorb cost pressures, fund investment, and convert stable industrial-gas demand into improved earnings over the next several quarters.

Negative Factors

Weaker free-cash-flow conversionPositive cash generation is being reduced by weaker recent free-cash-flow conversion. If earnings continue to translate into cash at only a moderate rate, working-capital needs or capital spending could constrain funds available for debt reduction, investment, and shareholder returns.

Nippon Sanso Holdings Corporation (4091) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 2.34T
Dividend Yield: 1.10%
Average Volume (3M): 672.66K
Price to Earnings (P/E): 16.2
Beta (1Y): 0.76
Revenue Growth: 9.89%
EPS Growth: 36.49%
Country: Japan
Employees: 20,411
Sector: Basic Materials
Sector Strength: 61
Industry: Chemicals - Specialty

Nippon Sanso Holdings Corporation Business Overview & Revenue Model

Company Description

Nippon Sanso Holdings Corporation manages a comprehensive gas business with widespread operations across Japan, the United States, Europe, Asia, and Oceania. Its activities are organized into five primary divisions: dedicated gas businesses in Japan,...

How the Company Makes Money

Nippon Sanso Holdings makes money primarily by producing and distributing industrial gases and providing related equipment and services. Key revenue streams generally include: (1) On-site gas supply: The company builds and operates gas production uni...

Nippon Sanso Holdings Corporation Earnings Call Summary

Earnings Call Date:Feb 03, 2026(Q3-2025)|% Change Since:24.17%|Next Earnings Date:Feb 03, 2027

Earnings Call SentimentPositive

The call presented solid operational and financial progress: mid-single digit revenue growth, stronger core operating income and margin expansion, significant operating cash flow improvement, strategic M&A to expand regional footprints, and successful refinancing that reduces interest costs. Offsets include volume softness in parts of the business, regionally mixed profitability (Asia & Oceania pressures), a substantial increase in investing outflows and a meaningful free cash flow decline, plus project execution and leverage implications from acquisitions and suspended projects. On balance the positive execution on pricing, productivity, margin expansion, backlog size, and strategic deals outweigh the near-term cash/volume challenges.

Positive Updates

Consolidated Revenue Growth

Q3 revenue increased 3.8% year-over-year (Oct–Dec 2024). Excluding favorable currency, revenue rose ~1.2%. Management maintained full-year sales guidance at ¥1.3 trillion.

Negative Updates

Volume Softness and Product Weaknesses

Overall volume impact was negative 1.4% in Q3. Specific product challenges include softness in packaged gases (dry ice, hard goods), semiconductor-related gases in some regions, and weak helium demand in Europe.

Company Guidance

The company kept full-year sales guidance unchanged at ¥1.3 trillion while raising core operating income (COI) by ¥8.0 billion (up 4.5%) to ¥185.0 billion and nudging operating income up ¥1.0 billion to ¥178.0 billion; pre-tax income is projected at ¥156.5 billion and net income at ¥110.0 billion (¥107.0 billion attributable to the parent). Q3 trends that underpin the guidance included revenue +3.8% (ex-currency ~+1.2%), COI +7.5% (ex-currency +4.5%), COI margin +50 bps to 14.1% and EBITDA margin +50 bps to 23%; the Q3 consolidated variance breakdown was currency +2.6%, price +2.0%, volume -1.4%, pass-through +0.4% and other +0.2%. Management assumes USD/JPY ¥152.45 and EUR/JPY ¥165.83 for Q4, and notes currency sensitivity of ~¥2.4 billion revenue / ¥350 million COI per ¥1 vs USD and ~¥1.9 billion revenue / ¥350 million COI per ¥1 vs EUR. Key cash and investment metrics cited were backlog ≈¥170 billion (projects ≥¥500 million), operating cash flow up ~19% year-to-date (~¥24 billion), free cash flow down ~31% YTD due to higher CapEx and M&A, and refinancing of ¥75 billion hybrid debt in Q3 (¥175 billion refinanced in ~1 year) saving roughly 90 basis points in annual effective interest expense.

Nippon Sanso Holdings Corporation Financial Statement Overview

Summary

Profitability is strong with meaningful multi-year margin expansion and solid ROE (~11.8%). Balance-sheet risk has improved as leverage declined (debt-to-equity ~0.69 TTM vs >1.2–1.4 historically), but absolute debt remains sizable. Cash-flow quality is the main constraint: free cash flow is positive (146.3B TTM) but down ~15.5% and conversion is only moderate (~61% of net income), indicating weaker earnings-to-cash translation recently.

Income Statement

82Very Positive

Balance Sheet

71Positive

Cash Flow

63Positive

Financial statement breakdown
Breakdown	TTM	Mar 2026	Mar 2026	Mar 2025	Mar 2024	Mar 2023
Income Statement
Total Revenue	1.33T	1.31T	1.36T	1.26T	1.19T	957.17B
Gross Profit	564.45B	545.44B	582.42B	510.98B	438.63B	358.57B
EBITDA	325.27B	299.60B	327.60B	284.39B	224.16B	191.77B
Net Income	114.44B	98.78B	123.89B	105.90B	73.08B	64.10B
Balance Sheet
Total Assets	2.67T	2.42T	2.77T	2.41T	2.16T	1.98T
Cash, Cash Equivalents and Short-Term Investments	132.92B	144.53B	165.35B	126.10B	132.22B	93.70B
Total Debt	878.40B	902.65B	882.06B	936.92B	941.78B	929.22B
Total Liabilities	1.46T	1.40T	1.51T	1.46T	1.40T	1.32T
Stockholders Equity	1.17T	980.45B	1.22T	914.48B	724.31B	628.71B
Cash Flow
Free Cash Flow	152.20B	88.32B	163.44B	97.63B	96.13B	74.28B
Operating Cash Flow	260.87B	235.15B	272.59B	215.98B	187.96B	148.76B
Investing Cash Flow	-170.00B	-142.93B	-202.78B	-124.65B	-98.07B	-70.86B
Financing Cash Flow	-89.10B	-73.29B	-59.23B	-110.07B	-54.43B	-77.95B

Nippon Sanso Holdings Corporation Technical Analysis

Technical Analysis SentimentPositive

Last Price5999.00

Price Trends

50DMA5510.39Positive

100DMA5681.61Positive

200DMA5631.79Positive

Market Momentum

MACD53.58Negative

RSI72.82Negative

STOCH88.26Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4091, the sentiment is Positive. The current price of 5999.00 is above the 20-day moving average (MA) of 5518.45, above the 50-day MA of 5510.39, and above the 200-day MA of 5631.79, indicating a bullish trend. The MACD of 53.58 indicates Negative momentum. The RSI at 72.82 is Negative, neither overbought nor oversold. The STOCH value of 88.26 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4091.

Nippon Sanso Holdings Corporation Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

JP:4091 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:4091	73Outperform	JPY 2.51T	16.23	―	1.10%	9.89%	36.49%
JP:4063	69Neutral	JPY 11.44T	19.39	11.28%	2.30%	5.07%	5.21%
JP:4093	69Neutral	JPY 14.12B	10.71	―	3.47%	-0.22%	4.42%
JP:4097	69Neutral	JPY 66.69B	12.82	―	3.20%	1.10%	12.09%
JP:3407	65Neutral	JPY 2.11T	10.47	9.51%	2.74%	4.03%	61.70%
Sector *	61Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
JP:4004	50Neutral	JPY 2.45T	31.31	8.14%	0.56%	1.40%	57.40%

* Basic Materials Sector Average

Performance Comparison

JP:4091 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:4091	Nippon Sanso Holdings Corporation	5999.00	1107.37	22.64%
JP:3407	Asahi Kasei Corporation	1605.50	371.54	30.11%
JP:4063	Shin-Etsu Chemical Co	5693.00	1263.33	28.52%
JP:4004	Resonac Holdings Corporation	11335.00	5753.26	103.07%
JP:4093	Toho Acetylene Co., Ltd.	404.00	54.19	15.49%
JP:4097	Koatsu Gas Kogyo Co., Ltd.	1251.00	241.15	23.88%

Nippon Sanso Holdings Corporation Corporate Events

Nippon Sanso Announces Fiscal 2027 Second-Quarter Results

Nov 4, 2026

Nippon Sanso Holdings Corporation’s November 4, 2026 earnings announcement presents consolidated financial results for the quarter ended September 2026 and the first half ended September 2026 of fiscal 2027. It organizes the disclosure around b...

Nippon Sanso Holdings Reports Strong First-Half Profit Growth

Nov 4, 2026

Nippon Sanso Holdings reported strong first-half results for fiscal 2027, with revenue rising 13.3% year on year to ¥737.1 billion and core operating income increasing 15.5% to ¥108.9 billion. Operating income climbed 26.6% to ¥119.3 b...

Nippon Sanso lifts quarterly profit and maintains full-year guidance

Aug 6, 2026

Nippon Sanso Holdings reported strong first-quarter results for the fiscal year ending March 2027, with revenue rising 14.9% year on year to ¥361.8 billion and core operating income up 19.9% to ¥54.7 billion. Operating income gained 42.1% a...

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.

Date of analysis: Nov 05, 2026

Nippon Sanso Holdings Corporation AI Stock Analysis