Daito Pharmaceutical Co., Ltd. (4577) AI Stock Analysis

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Daito Pharmaceutical Co., Ltd.

(TSE/TYO:4577)

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Rating:67Neutral

Price Target:JPY 1,430.00▲(9.16% Upside)

Action:reiterated

Date:10/11/26

The score is primarily driven by mixed financial performance: strong balance-sheet stability and improving (now positive) free cash flow are offset by a sharp TTM revenue contraction and still-below-peak margins. Valuation is supportive (moderate P/E and ~3% yield), while technical indicators are broadly neutral, indicating no strong momentum tailwind.

Positive Factors

Conservative balance sheetLow leverage and a substantial equity buffer reduce financial strain during demand or pricing volatility. This gives Daito greater resilience, preserves borrowing capacity, and supports continued investment or other capital allocation choices over the next several quarters.

Negative Factors

Sharp revenue contractionA contraction of this magnitude is a material challenge to the company’s growth profile and future operating leverage. Prolonged top-line weakness could reduce scale benefits, constrain investment capacity, and make it harder for earnings to return to prior peak levels.

Daito Pharmaceutical Co., Ltd. (4577) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 37.08B
Dividend Yield: 3.05%
Average Volume (3M): 84.86K
Price to Earnings (P/E): 12.0
Beta (1Y): 0.24
Revenue Growth: -2.83%
EPS Growth: 65.69%
Country: Japan
Employees: 1,085
Sector: Healthcare
Sector Strength: 51
Industry: Drug Manufacturers - Specialty & Generic

Daito Pharmaceutical Co., Ltd. Business Overview & Revenue Model

Company Description

Daito Pharmaceutical Co.,Ltd. is a global entity primarily involved in the creation and sale of a diverse range of pharmaceutical products. Their offerings span active pharmaceutical ingredients (APIs) and chemical intermediates, alongside both presc...

Daito Pharmaceutical Co., Ltd. Financial Statement Overview

Summary

Balance sheet strength (low leverage; debt-to-equity ~0.18) supports financial stability, but operating fundamentals are mixed. Profitability is still positive (TTM net margin ~6.2%, EBIT margin ~7.2%) yet below 2022–2023 levels, and the major concern is a sharp TTM revenue decline (~22.8% YoY). Cash flow turned positive (TTM FCF ~¥5.5B) after multiple years of negative FCF, but conversion is only moderate (FCF ~59% of net income), so durability remains unproven.

Income Statement

62Positive

Balance Sheet

78Positive

Cash Flow

56Neutral

Financial statement breakdown
Breakdown	TTM	May 2025	May 2024	May 2023	May 2022	May 2021
Income Statement
Total Revenue	49.53B	50.65B	50.64B	46.90B	45.10B	43.46B
Gross Profit	9.53B	9.90B	8.47B	9.67B	10.15B	11.31B
EBITDA	7.05B	8.02B	7.41B	7.92B	8.96B	10.04B
Net Income	3.17B	3.16B	1.91B	3.29B	3.60B	4.67B
Balance Sheet
Total Assets	71.65B	73.29B	78.00B	77.71B	70.55B	64.94B
Cash, Cash Equivalents and Short-Term Investments	1.69B	954.00M	2.21B	2.73B	3.61B	4.38B
Total Debt	8.45B	9.29B	11.88B	8.72B	4.89B	3.44B
Total Liabilities	19.16B	20.35B	25.93B	25.44B	19.58B	17.26B
Stockholders Equity	52.42B	52.89B	52.00B	52.07B	50.67B	47.31B
Cash Flow
Free Cash Flow	5.53B	5.53B	-957.00M	-1.04B	-1.35B	-257.00M
Operating Cash Flow	9.38B	9.38B	5.90B	5.18B	4.16B	4.37B
Investing Cash Flow	-4.39B	-4.39B	-7.37B	-5.93B	-5.57B	-4.33B
Financing Cash Flow	-6.29B	-6.29B	1.00B	-183.00M	616.00M	921.00M

Daito Pharmaceutical Co., Ltd. Technical Analysis

Technical Analysis SentimentNegative

Last Price1310.00

Price Trends

50DMA1319.82Negative

100DMA1295.66Positive

200DMA1309.82Positive

Market Momentum

MACD-4.43Positive

RSI46.00Neutral

STOCH37.57Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4577, the sentiment is Negative. The current price of 1310.00 is below the 20-day moving average (MA) of 1329.10, below the 50-day MA of 1319.82, and above the 200-day MA of 1309.82, indicating a neutral trend. The MACD of -4.43 indicates Positive momentum. The RSI at 46.00 is Neutral, neither overbought nor oversold. The STOCH value of 37.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4577.

Daito Pharmaceutical Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (51)

Financial Indicators

JP:4577 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:4554	69Neutral	JPY 49.18B	16.77	5.56%	2.17%	20.72%	-10.35%
JP:4886	69Neutral	JPY 56.50B	11.89	―	3.02%	―	9.04%
JP:4534	68Neutral	JPY 111.10B	10.96	7.68%	2.51%	15.85%	60.55%
JP:4577	67Neutral	JPY 37.73B	12.05	―	3.05%	-2.83%	65.69%
JP:4569	52Neutral	JPY 56.22B	156.51	―	4.49%	-6.48%	-95.83%
Sector *	51Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
JP:4539	47Neutral	JPY 5.31B	-11.17	―	3.40%	0.31%	-194.72%

* Healthcare Sector Average

Performance Comparison

JP:4577 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:4577	Daito Pharmaceutical Co., Ltd.	1310.00	98.41	8.12%
JP:4554	Fuji Pharma Co., Ltd.	1851.00	230.88	14.25%
JP:4534	Mochida Pharmaceutical Co., Ltd.	3285.00	180.48	5.81%
JP:4539	Nippon Chemiphar Co., Ltd.	1471.00	-15.65	-1.05%
JP:4569	KYORIN Pharmaceutical Co.,Ltd.	1046.00	-316.93	-23.25%
JP:4886	ASKA Pharmaceutical Holdings Co., Ltd.	2149.00	161.88	8.15%

Daito Pharmaceutical Co., Ltd. Corporate Events

Daito and Partners Launch JV to Acquire KYORIN Generic Drug Unit

Sep 30, 2026

Daito Pharmaceutical has joined with Meiji Seika Pharma and the Development Bank of Japan to form Pharmatech Co-creation Platform, Inc., a new joint venture that will acquire KYORIN Pharmaceutical’s consolidated subsidiary KYORIN Rimedio, excluding i...

Daito Pharmaceutical Completes ¥605 Million Share Buyback to Boost Capital Efficiency

Jul 13, 2026

Daito Pharmaceutical has completed a share buyback under its Medium-Term Management Plan as part of efforts to enhance shareholder returns and improve capital efficiency. The company acquired 484,000 shares, equivalent to about 1.7% of its outstandin...

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: Oct 11, 2026

Daito Pharmaceutical Co., Ltd. AI Stock Analysis