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Nippon Denko Co., Ltd. (JP:5563)
:5563
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Nippon Denko Co., Ltd. (5563) AI Stock Analysis

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JP:5563

Nippon Denko Co., Ltd.

(Frankfurt:5563)

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Outperform 73 (OpenAI - 4o)
Rating:73Outperform
Price Target:
¥383.00
▲(10.37% Upside)
Nippon Denko Co., Ltd. demonstrates strong financial stability with a robust balance sheet and improving operational efficiency. The technical indicators show a positive trend, supporting the stock's momentum. While the valuation is fair, the significant drop in free cash flow is a concern that needs addressing to ensure long-term growth.

Nippon Denko Co., Ltd. (5563) vs. iShares MSCI Japan ETF (EWJ)

Nippon Denko Co., Ltd. Business Overview & Revenue Model

Company DescriptionNippon Denko Co., Ltd., together with its subsidiaries, manufactures and sells ferroalloys, functional materials, and environmental recycling systems in Japan. Its ferroalloys include high-carbon ferromanganese, medium-and low-carbon ferromanganese, ferrosilicomanganese, ferrosilicon, high-carbon ferrochromium, ferrovanadium, and ferroniobium. The company also offers functional materials, such as ferro boron, metal hydride alloys, cathode materials, zirconium oxides, manganese inorganic chemical products, boron oxide, boric acid, and electrolytic metal manganese. In addition, it provides environmental recycling systems, including chromic acid recovery systems for the production of industrial chemicals; boron recovery systems to absorb and eliminate the boron contained in wastewater; nickel recovery systems to recover nickel from nickel-containing drainage; AQUA PACK, a cartridge demineralizer; and MR-PACK, an integral pure water production unit. Further, the company produces and sells fertilizers; industrial chemicals, synthetic resins, special metals, packaging materials, high-pressure gases, abrasives, and pollution control equipment; polyethylene pipes, bags, nets, sheets, and PVC pipes; and roadbed building materials and solar panel installation materials, as well as generates renewable energy power. Additionally, it engages in transportation, warehousing, and sale of materials for steelmaking; recycling of general and industrial waste by melting; collection and haulage of industrial waste; provision of ship agency services; and sale of fuels. Nippon Denko Co., Ltd. was founded in 1925 and is headquartered in Tokyo, Japan.
How the Company Makes MoneyNippon Denko Co., Ltd. generates revenue through multiple key streams, primarily from the sale of its specialized industrial materials and components. The company supplies products to various sectors, including electronics, where it provides materials for semiconductors and circuit boards, as well as to the automotive industry, where it offers advanced alloys and chemical products. Additionally, Nippon Denko engages in strategic partnerships with major manufacturers, allowing for collaborative development and innovation, which helps to enhance its product offerings and market reach. The company's revenue is also supported by investments in research and development, enabling it to maintain a competitive edge and adapt to evolving market needs.

Nippon Denko Co., Ltd. Financial Statement Overview

Summary
Nippon Denko Co., Ltd. displays solid operational metrics with improving profit margins and a robust balance sheet characterized by a strong equity position and controlled leverage. However, the decreasing net income and significant drop in free cash flow highlight potential areas for improvement. The company is in a stable financial position, but sustaining profitability and improving cash flow management will be crucial for future growth.
Income Statement
72
Positive
Nippon Denko Co., Ltd. shows moderate revenue growth of 2.39% from 2023 to 2024, with a notable improvement in gross profit margin at 17.39% for 2024. The net profit margin stood at 4.02% for 2024, indicating profitability, although it has seen a decrease compared to the previous year. EBIT and EBITDA margins have also improved to 8.76% and 12.91%, respectively, demonstrating enhanced operational efficiency. However, the dip in net income from 2023 suggests some challenges in sustaining net profitability.
Balance Sheet
78
Positive
The company maintains a strong equity base with an equity ratio of 72.07% in 2024, indicating financial stability. The debt-to-equity ratio has improved to 0.23, reflecting effective leverage management. Return on Equity (ROE) for 2024 is at 4.27%, indicating moderate returns on shareholder investments. The balance sheet reflects a healthy financial position with a good balance between assets and liabilities.
Cash Flow
65
Positive
The free cash flow has decreased significantly from 2023 to 2024, showing a decline of 58.39%, which could pose potential liquidity challenges. The operating cash flow to net income ratio is 1.90, suggesting strong cash generation relative to net income. The free cash flow to net income ratio is 0.53, indicating lower free cash flow generation compared to net income. Overall, while cash generation remains positive, the decline in free cash flow is a concern.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue79.84B78.23B78.39B79.34B65.98B54.00B
Gross Profit13.68B13.61B11.39B15.38B14.36B10.62B
EBITDA9.23B8.59B6.40B13.36B8.75B4.71B
Net Income3.08B3.14B4.33B7.95B7.77B2.62B
Balance Sheet
Total Assets96.79B102.20B101.02B104.94B95.89B86.17B
Cash, Cash Equivalents and Short-Term Investments5.91B5.95B7.87B8.91B9.78B9.60B
Total Debt13.84B17.08B18.56B21.47B18.00B19.44B
Total Liabilities23.14B28.52B29.32B35.72B31.56B29.74B
Stockholders Equity73.66B73.68B71.70B69.19B64.26B56.37B
Cash Flow
Free Cash Flow0.001.66B3.98B1.74B2.53B5.72B
Operating Cash Flow0.005.96B8.78B6.28B5.25B10.35B
Investing Cash Flow0.00-4.85B-4.67B-4.59B-2.21B-8.99B
Financing Cash Flow0.00-3.06B-5.24B-2.68B-2.92B701.00M

Nippon Denko Co., Ltd. Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price347.00
Price Trends
50DMA
338.00
Negative
100DMA
301.68
Positive
200DMA
283.98
Positive
Market Momentum
MACD
2.22
Positive
RSI
46.67
Neutral
STOCH
16.01
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5563, the sentiment is Neutral. The current price of 347 is above the 20-day moving average (MA) of 344.15, above the 50-day MA of 338.00, and above the 200-day MA of 283.98, indicating a neutral trend. The MACD of 2.22 indicates Positive momentum. The RSI at 46.67 is Neutral, neither overbought nor oversold. The STOCH value of 16.01 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:5563.

Nippon Denko Co., Ltd. Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
¥46.30B15.034.44%3.26%8.65%-25.13%
¥51.27B4.796.72%-8.44%9.50%
¥65.41B6.035.14%-9.28%-7.16%
¥99.87B8.953.92%-3.06%1.15%
$10.43B7.12-0.05%2.87%2.86%-36.73%
¥57.27B4.996.12%-7.45%-9.12%
¥78.87B34.491.31%-12.05%-97.36%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:5563
Nippon Denko Co., Ltd.
337.00
59.83
21.59%
JP:5410
Godo Steel,Ltd.
3,660.00
-15.15
-0.41%
JP:5440
Kyoei Steel Ltd.
2,298.00
630.83
37.84%
JP:5445
Tokyo Tekko Co., Ltd.
5,640.00
-134.62
-2.33%
JP:5449
OSAKA STEEL CO., LTD.
2,596.00
-474.62
-15.46%
JP:5480
Nippon Yakin Kogyo Co., Ltd.
4,280.00
503.61
13.34%

Nippon Denko Co., Ltd. Corporate Events

Nippon Denko Completes Treasury Share Acquisition
Oct 28, 2025

Nippon Denko Co., Ltd. has completed the acquisition of 1,568,100 treasury shares at a cost of 541,246,483 yen through an open market repurchase on the Tokyo Stock Exchange. This acquisition is part of a larger plan approved by the Board of Directors to acquire up to 20,000,000 shares, aiming to enhance shareholder value and optimize capital structure.

The most recent analyst rating on (JP:5563) stock is a Buy with a Yen383.00 price target. To see the full list of analyst forecasts on Nippon Denko Co., Ltd. stock, see the JP:5563 Stock Forecast page.

Nippon Denko Announces Treasury Share Acquisition
Oct 1, 2025

Nippon Denko Co., Ltd. has announced the acquisition of 1,390,800 treasury shares at a cost of 469,578,085 yen through an open market repurchase on the Tokyo Stock Exchange. This move is part of a broader strategy approved by the Board of Directors to acquire up to 20,000,000 shares, aiming to enhance shareholder value and optimize capital structure.

The most recent analyst rating on (JP:5563) stock is a Buy with a Yen311.00 price target. To see the full list of analyst forecasts on Nippon Denko Co., Ltd. stock, see the JP:5563 Stock Forecast page.

Nippon Denko Announces Treasury Share Acquisition
Sep 2, 2025

Nippon Denko Co., Ltd. announced the acquisition of 10,075,800 of its own common shares, costing approximately 2.99 billion yen, as part of a strategic move approved by its Board of Directors. This acquisition, conducted through open market repurchases and off-auction trading, is part of a broader plan to acquire up to 20 million shares by March 2026, potentially impacting the company’s market positioning and shareholder value.

The most recent analyst rating on (JP:5563) stock is a Buy with a Yen311.00 price target. To see the full list of analyst forecasts on Nippon Denko Co., Ltd. stock, see the JP:5563 Stock Forecast page.

Nippon Denko Announces Treasury Share Disposal for Employee Incentive Plan
Aug 28, 2025

Nippon Denko Co., Ltd. has announced the disposal of treasury shares as part of a Restricted Stock Incentive Plan to commemorate its 100th anniversary. This initiative aims to enhance employee welfare by allowing eligible employees to acquire company shares, promoting wealth accumulation and aligning employee interests with shareholder value. The plan involves distributing 626,470 shares to employees, potentially impacting the company’s share structure and stakeholder interests.

The most recent analyst rating on (JP:5563) stock is a Buy with a Yen311.00 price target. To see the full list of analyst forecasts on Nippon Denko Co., Ltd. stock, see the JP:5563 Stock Forecast page.

Nippon Denko Corrects Dividend Payment Date in Financial Results
Aug 8, 2025

Nippon Denko Co., Ltd. has issued a correction to its previously announced consolidated financial results for the first half of 2025. The correction pertains to the scheduled date for commencing dividend payments, which has been adjusted from September 10, 2025, to September 12, 2025. This correction ensures accurate communication with stakeholders and maintains the company’s commitment to transparency.

Nippon Denko Completes Significant Treasury Share Acquisition
Aug 6, 2025

Nippon Denko Co., Ltd. has completed the acquisition of 7,978,400 treasury shares, representing 5.81% of its total issued shares, at a cost of 2,321,714,400 yen. This move aims to enhance shareholder returns and improve capital efficiency, with further acquisitions planned through open market transactions on the Tokyo Stock Exchange.

Nippon Denko Introduces Employee Stock Incentive Plan
Aug 5, 2025

Nippon Denko Co., Ltd. has announced the introduction of a restricted stock incentive plan for its employees and those of its subsidiaries. This initiative, marking the company’s 100th anniversary, aims to enhance employee welfare and align their interests with shareholders by promoting wealth accumulation and sustainable corporate value growth.

Nippon Denko Announces Treasury Share Acquisition Plan
Aug 5, 2025

Nippon Denko Co., Ltd. has announced a plan to acquire up to 20 million of its own shares, representing 14.56% of its total issued shares, as part of a strategy to enhance shareholder returns and improve capital efficiency. This move, approved by the Board of Directors, is aimed at providing flexibility in capital management amid a shifting business environment, with the acquisition to be conducted through open market repurchases and off-auction trading on the Tokyo Stock Exchange.

Nippon Denko Announces 100th Anniversary Dividend and Forecast Revisions
Aug 5, 2025

Nippon Denko Co., Ltd. has announced a commemorative dividend of ¥1 per share to mark its 100th anniversary, alongside a revision of its dividend forecasts for the fiscal year ending December 31, 2025. This move reflects the company’s gratitude towards its shareholders and aligns with its shareholder returns policy, which includes a payout ratio of approximately 40% based on underlying profit and a minimum dividend per share of ¥10.

Nippon Denko Revises 2025 Earnings Forecasts Amid Mixed Trends
Aug 5, 2025

Nippon Denko Co., Ltd. has revised its consolidated earnings forecasts for the fiscal year ending December 31, 2025, based on recent operating trends and cumulative results for the first half of the year. The company has adjusted its net sales forecast to 78,200 million yen and operating profit to 5,200 million yen, while ordinary profit is revised down to 3,000 million yen. These changes reflect a 2.1% increase in net sales but a 14.3% decrease in ordinary profit compared to previous forecasts, indicating a mixed financial outlook for the company.

Nippon Denko Reports H1 2025 Financials and Announces Special Dividend
Aug 5, 2025

Nippon Denko Co., Ltd. reported its consolidated financial results for the first half of 2025, showing a 4.4% increase in net sales compared to the previous year, despite a decline in operating profit by 10.3%. The company announced a revision in its dividend forecast, including a special commemorative dividend for its 100th anniversary, reflecting its commitment to shareholder returns. The financial outlook for the full year 2025 anticipates a significant decrease in profits, indicating potential challenges ahead.

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 23, 2025