Kobe Steel (5406) AI Stock Analysis

• Market Cap: ¥654.25B
• Dividend Yield: 4.8%
• Average Volume (3M): 3.27M
• Price to Earnings (P/E): 6.4
• Beta (1Y): 1.08
• Revenue Growth: -0.32%
• EPS Growth: -23.77%
• Country: JP
• Employees: 38,050
• Sector: Basic Materials
• Sector Strength: 61
• Industry: Steel
• EPS (TTM): 260.15
• Shares Outstanding: 396,345,980
• 10 Day Avg. Volume: 1,766,570
• 30 Day Avg. Volume: 3,270,190
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• 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: ¥1,740.63
• Price Target Upside: 4.86% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

Kobe Steel's overall score is driven by strong valuation metrics, indicating the stock is undervalued with an attractive dividend yield. The company's financial performance is solid, with growth in revenue and profits, though cash flow management needs attention. Technical analysis presents a mixed outlook, with potential short-term volatility due to overbought signals.

Kobe Steel Business Overview & Revenue Model

Company Description

Kobe Steel, Ltd. (5406), commonly known as Kobelco, is a diversified industrial conglomerate headquartered in Japan. It operates across several sectors, including iron and steel, aluminum and copper, machinery, construction machinery, engineering, and environmental solutions. The company is known for producing high-quality steel products, aluminum and copper products, and is also involved in the manufacturing of industrial machinery and equipment, as well as providing engineering and construction services.

How the Company Makes Money

Kobe Steel generates revenue through its various business segments, primarily by producing and selling materials such as steel, aluminum, and copper, which are essential in manufacturing and construction industries. The company's iron and steel segment is a significant source of income, supplying products for automotive, shipbuilding, and infrastructure projects. Additionally, the aluminum and copper segment contributes to earnings by providing materials for electronics, transportation, and packaging. Sales of industrial machinery, such as compressors and construction equipment, further diversify Kobe Steel's revenue streams. The company also earns income from its engineering services, which involve project management and construction solutions for industrial facilities and infrastructure projects. Strategic partnerships and joint ventures with other global companies often enhance its market reach and technological capabilities, further bolstering its financial performance.

Kobe Steel Financial Statement Overview

Summary

Kobe Steel demonstrates robust revenue and profit growth, supported by effective cost management and improved margins. The balance sheet reflects controlled leverage and decent equity returns. However, cash flow management is a concern due to missing recent data, indicating potential operational cash management issues.

Income Statement

Kobe Steel shows a solid performance with a consistent revenue growth trend from 2020 to TTM 2024. Gross profit and net profit margins have improved significantly, highlighting enhanced cost management and profitability. The EBIT and EBITDA margins are stable, indicating operational efficiency. However, the recent decline in gross profit margin in TTM 2024 compared to 2023 raises some concern.

Balance Sheet

The company maintains a healthy balance sheet with an improving debt-to-equity ratio, indicating effective management of leverage. Return on Equity (ROE) has shown a positive trend, reflecting the company's ability to generate profits from shareholders' equity. However, the equity ratio needs improvement to ensure financial stability, given the industry's capital-intensive nature.

Cash Flow

Kobe Steel's cash flow statement indicates challenges, with no operating or free cash flow reported in TTM 2024. Despite previous positive growth in free cash flow, the current lack of data suggests potential operational cash management issues. The company needs to ensure consistent operating cash flow to support its net income levels.

Breakdown
Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
2.54T	2.47T	2.08T	1.71T	1.87T
	Gross Profit
446.60B	321.29B	307.80B	223.19B	231.10B
	EBIT
186.63B	86.36B	87.62B	30.40B	9.86B
	EBITDA
296.53B	224.49B	202.92B	131.49B	49.13B
	Net Income Common Stockholders
109.55B	72.57B	60.08B	23.23B	-68.01B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
278.84B	203.52B	260.70B	317.54B	146.04B
	Total Assets
2.92T	2.87T	2.73T	2.58T	2.41T
	Total Debt
863.47B	907.05B	959.87B	1.05T	906.64B
	Net Debt
584.63B	703.53B	716.37B	785.43B	760.59B
	Total Liabilities
1.79T	1.90T	1.86T	1.81T	1.69T
	Stockholders Equity
1.06T	913.96B	815.33B	710.36B	656.88B
Cash Flow		Free Cash Flow
110.42B	20.73B	12.36B	21.58B	-218.35B
	Operating Cash Flow
205.28B	119.69B	168.81B	194.80B	27.04B
	Investing Cash Flow
-53.72B	-97.27B	-161.51B	-141.85B	-218.99B
	Financing Cash Flow
-81.21B	-85.56B	-69.14B	118.44B	140.59B

Kobe Steel Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1660.00
• 50DMA: Negative
• 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:5406, the sentiment is Positive. The current price of 1660 is above the 20-day moving average (MA) of 1606.25, below the 50-day MA of 1700.75, and above the 200-day MA of 1634.25, indicating a neutral trend. The MACD of -7.99 indicates Negative momentum. The RSI at 51.68 is Neutral, neither overbought nor oversold. The STOCH value of 85.81 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5406.

Kobe Steel Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5401	76 Outperform	$3.13T	6.17	9.28%	5.03%	1.42%	-27.64%
5406	72 Outperform	¥654.25B	6.38	9.34%	4.80%	-0.32%	-23.77%
5471	70 Outperform	€234.49B	4.41	12.49%	4.46%	-0.91%	80.48%
5631	67 Neutral	€424.04B	23.97	9.81%	1.35%	0.37%	0.35%
5410	66 Neutral	¥54.20B	4.79		6.48%	-7.92%	-25.47%
5411	66 Neutral	$1.00T	7.88	5.34%	4.99%	-4.62%	-30.09%
Sector *	49 Neutral	$1.95B	-1.32	-21.23%	3.72%	0.87%	-29.37%

Kobe Steel Corporate Events

Osaka High Court Dismisses Appeal Against Kobe Steel’s Power Plant Operations

Kobe Steel, Ltd. announced that the Osaka High Court has dismissed an appeal against the company and its subsidiary regarding the construction of new power plant units. The appeal was filed by local residents concerned about environmental impacts, but the court’s decision supports the continuation of operations, indicating no impact on Kobe Steel’s business performance.

Kobe Steel Announces Changes in Board of Directors

Kobe Steel, Ltd announced changes in its board of directors, with new appointments to be discussed at the upcoming Ordinary General Meeting of Shareholders in June 2025. These changes are expected to influence the company’s strategic direction and operational oversight, potentially impacting its market positioning and stakeholder relations.

Kobe Steel Increases Dividend Forecast for Fiscal 2024

Kobe Steel, Ltd. has revised its dividend forecast for the fiscal year ending March 31, 2025, announcing an increase in the year-end dividend per share from 45 yen to 55 yen, resulting in an annual dividend of 100 yen. This decision reflects the company’s commitment to returning profits to shareholders while maintaining a balance between financial health and capital needs, aiming for a target dividend payout ratio of approximately 30% of the profit attributable to owners of the parent.

Kobe Steel Reports Nine-Month Financial Results and Revises Dividend Forecast

Kobe Steel announced its consolidated financial results for the nine months ending December 31, 2024, reporting a slight increase in net sales but a decrease in operating and ordinary profit compared to the previous year. The company revised its dividend forecast for fiscal 2024 and included Kansai Coke & Chemicals Co., Ltd. in its consolidation, indicating potential strategic adjustments.

Kobe Steel to Sell Shares in Nippon Steel, Maintaining Cooperative Ties

Kobe Steel has announced its decision to sell all its shares in Nippon Steel Corporation as part of its strategy to maximize capital efficiency under its Medium-Term Management Plan for fiscal 2024–2026. Despite the sale, Kobe Steel will maintain its cooperative relationship with Nippon Steel, ensuring continued collaboration for mutual benefit.