Otani Kogyo Co., Ltd. (5939) AI Stock Analysis

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Otani Kogyo Co., Ltd.

(TSE/TYO:5939)

Select Model

Rating:58Neutral

Price Target:JPY 4,462.00▲(4.01% Upside)

Action:reiterated

Date:08/17/26

The score is driven primarily by moderate financial performance: profitability is still positive and leverage is low, but revenue has cooled and cash-flow volatility is a notable risk. Technical indicators are a headwind with price below major moving averages and negative MACD. Valuation is supportive with a moderate P/E, though the dividend yield is modest.

Positive Factors

Conservative Balance SheetLow leverage gives Otani Kogyo financial flexibility and reduces the burden of interest and refinancing obligations. Equity growth further supports resilience, allowing the company to absorb weaker demand or fund manufacturing needs without relying heavily on additional borrowing.

Negative Factors

Revenue Momentum WeakeningThe recent revenue slowdown indicates that demand or shipment momentum has weakened after stronger growth in FY2023 and FY2024. If this persists, lower manufacturing utilization and reduced scale could make it harder to protect earnings and sustain expansion across construction and industrial customers.

Otani Kogyo Co., Ltd. (5939) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 3.34B
Dividend Yield: 0.70%
Average Volume (3M): 1,587
Price to Earnings (P/E): 12.5
Beta (1Y): 0.78
Revenue Growth: -8.07%
EPS Growth: -17.89%
Country: Japan
Employees: 179
Sector: Industrials
Sector Strength: 63
Industry: Electrical Equipment & Parts

Otani Kogyo Co., Ltd. Business Overview & Revenue Model

Company Description

Otani Kogyo Co.,Ltd. produces and distributes a variety of essential overhead line equipment throughout Japan, serving power distribution, telecommunications, public address systems, and cable television (CATV) networks. Their extensive catenary hard...

How the Company Makes Money

Otani Kogyo primarily makes money by selling steel products and steel-related manufactured items to business customers (e.g., construction-related users and other industrial end-markets). Revenue is generated through (1) product sales (shipment-based...

Otani Kogyo Co., Ltd. Financial Statement Overview

Summary

Moderate fundamentals. Profitability remains positive but has softened with TTM revenue down (-2.85%) and margin compression versus prior peaks (TTM operating margin ~5.1%, net margin ~3.7%). Balance sheet is a strength with low leverage (debt-to-equity ~0.16), but cash-flow quality is weaker due to volatility and a period of negative operating/free cash flow in FY2026 despite positive TTM free cash flow.

Income Statement

62Positive

Balance Sheet

78Positive

Cash Flow

48Neutral

Financial statement breakdown
Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	7.31B	7.53B	7.90B	7.91B	7.19B	6.41B
Gross Profit	1.50B	1.55B	1.72B	1.55B	1.29B	1.23B
EBITDA	622.39M	634.80M	606.68M	575.30M	402.64M	352.84M
Net Income	267.27M	297.01M	369.16M	334.57M	173.88M	127.00M
Balance Sheet
Total Assets	7.84B	7.63B	7.59B	7.21B	6.24B	5.49B
Cash, Cash Equivalents and Short-Term Investments	1.49B	1.22B	1.91B	1.56B	1.16B	1.23B
Total Debt	735.55M	744.50M	478.52M	525.77M	48.00M	48.00M
Total Liabilities	3.38B	3.22B	3.51B	3.48B	2.85B	2.26B
Stockholders Equity	4.46B	4.41B	4.08B	3.73B	3.38B	3.23B
Cash Flow
Free Cash Flow	318.33M	-719.90M	428.38M	-70.72M	-42.59M	-273.54M
Operating Cash Flow	401.95M	-261.47M	783.41M	183.99M	112.25M	56.95M
Investing Cash Flow	-88.36M	-458.94M	-356.69M	-241.34M	-150.96M	-325.00M
Financing Cash Flow	9.96M	32.12M	-74.36M	451.09M	-23.39M	-28.92M

Otani Kogyo Co., Ltd. Technical Analysis

Technical Analysis SentimentNegative

Last Price4290.00

Price Trends

50DMA4642.70Negative

100DMA4785.45Negative

200DMA5501.00Negative

Market Momentum

MACD-103.67Positive

RSI19.71Positive

STOCH1.61Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5939, the sentiment is Negative. The current price of 4290.00 is below the 20-day moving average (MA) of 4488.25, below the 50-day MA of 4642.70, and below the 200-day MA of 5501.00, indicating a bearish trend. The MACD of -103.67 indicates Positive momentum. The RSI at 19.71 is Positive, neither overbought nor oversold. The STOCH value of 1.61 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:5939.

Otani Kogyo Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

JP:5939 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:6643	87Outperform	JPY 23.84B	8.44	―	2.92%	12.68%	31.19%
JP:5819	79Outperform	JPY 11.37B	9.70	―	4.21%	-0.88%	-1.47%
JP:6943	71Outperform	JPY 4.86B	6.77	―	2.20%	24.22%	―
JP:6637	67Neutral	JPY 48.47B	10.97	―	1.64%	15.89%	2.08%
Sector *	63Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
JP:6905	60Neutral	JPY 51.46B	-19.22	―	4.40%	17.15%	-463.16%
JP:5939	58Neutral	JPY 3.34B	12.51	―	0.70%	-8.07%	-17.89%

* Industrials Sector Average

Performance Comparison

JP:5939 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:5939	Otani Kogyo Co., Ltd.	4290.00	-900.95	-17.36%
JP:5819	Canare Electric Co., Ltd.	1685.00	-118.39	-6.56%
JP:6637	Terasaki Electric Co., Ltd.	3720.00	-1039.56	-21.84%
JP:6643	Togami Electric Mfg.Co., Ltd.	5140.00	1020.65	24.78%
JP:6905	Cosel Co., Ltd.	1251.00	74.74	6.35%
JP:6943	NKK SWITCHES CO., LTD.	5910.00	1410.19	31.34%

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: Aug 17, 2026

Otani Kogyo Co., Ltd. AI Stock Analysis

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