Di-Nikko Engineering Co., Ltd. (6635) AI Stock Analysis

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Di-Nikko Engineering Co., Ltd.

(TSE/TYO:6635)

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Rating:50Neutral

Price Target:JPY 594.00▲(0.00% Upside)

Action:reiterated

Date:08/30/26

The overall score is constrained by weak income statement trends, including declining revenue and very low net profit margins, which are the most significant risk factors. Strong cash flow generation and an improving balance sheet provide a solid foundation, but they are offset by bearish technical momentum. Reasonable valuation and a decent dividend yield offer some support, resulting in a neutral overall assessment.

Positive Factors

Improved Cash GenerationOperating and free cash flow turned positive in 2023–2025, including about ¥1.74B of free cash flow in 2025. This improves internal funding capacity and gives the company greater flexibility to support operations, service obligations, and pursue investment without relying solely on external capital.

Negative Factors

Revenue PressureRecent revenue contraction signals weaker demand, project volume, or business activity and reduces the operating base available to absorb fixed costs. If the decline persists, it could make recovery in earnings more difficult and further expose the company to swings in project mix and utilization.

Di-Nikko Engineering Co., Ltd. (6635) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 3.94B
Dividend Yield: 2.69%
Average Volume (3M): 41.73K
Price to Earnings (P/E): 11.3
Beta (1Y): 0.84
Revenue Growth: 17.17%
EPS Growth: 109.83%
Country: Japan
Employees: 988
Sector: Technology
Sector Strength: 61
Industry: Hardware, Equipment & Parts

Di-Nikko Engineering Co., Ltd. Business Overview & Revenue Model

Company Description

Di-Nikko Engineering Co., Ltd., established in Nikko, Japan, in 1979, operates as a comprehensive contract manufacturer. Their services encompass the full spectrum of production, ranging from initial circuit design and electronic component mounting t...

Di-Nikko Engineering Co., Ltd. Financial Statement Overview

Summary

Financial performance is mixed. Cash flow is a clear strength with operating cash flow surging 47% and strong free cash flow generation. The balance sheet is improving with reduced leverage. However, the income statement is weak, showing declining revenue and shrinking net profit margins to just 0.5%, which significantly drags down the overall financial health.

Income Statement

30Negative

Balance Sheet

45Neutral

Cash Flow

70Positive

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	37.63B	36.95B	38.96B	39.20B	33.94B	29.86B
Gross Profit	3.73B	3.88B	4.20B	4.00B	3.57B	2.91B
EBITDA	1.30B	1.26B	1.35B	1.34B	1.73B	677.92M
Net Income	251.62M	208.83M	277.38M	349.50M	995.29M	-90.03M
Balance Sheet
Total Assets	30.96B	28.77B	29.56B	29.20B	29.86B	21.05B
Cash, Cash Equivalents and Short-Term Investments	7.17B	5.38B	4.30B	3.52B	2.93B	1.24B
Total Debt	12.66B	11.74B	12.43B	12.73B	13.06B	10.71B
Total Liabilities	22.08B	20.61B	21.54B	22.26B	23.67B	17.42B
Stockholders Equity	7.27B	6.89B	6.88B	5.97B	5.30B	3.45B
Cash Flow
Free Cash Flow	0	1.74B	1.14B	530.98M	-795.00M	-670.43M
Operating Cash Flow	0	2.56B	1.74B	976.12M	-546.49M	-184.71M
Investing Cash Flow	0	-645.57M	-529.51M	152.41M	-182.66M	-476.61M
Financing Cash Flow	0	-920.86M	-736.99M	-655.72M	2.36B	187.00M

Di-Nikko Engineering Co., Ltd. Technical Analysis

Technical Analysis SentimentNeutral

Last Price594.00

Price Trends

50DMA632.46Negative

100DMA655.32Negative

200DMA648.64Negative

Market Momentum

MACD-23.03Negative

RSI49.85Neutral

STOCH51.49Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6635, the sentiment is Neutral. The current price of 594.00 is above the 20-day moving average (MA) of 585.15, below the 50-day MA of 632.46, and below the 200-day MA of 648.64, indicating a neutral trend. The MACD of -23.03 indicates Negative momentum. The RSI at 49.85 is Neutral, neither overbought nor oversold. The STOCH value of 51.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:6635.

Di-Nikko Engineering Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

JP:6635 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:6863	78Outperform	JPY 20.82B	15.64	―	6.88%	12.36%	12.83%
JP:6850	72Outperform	JPY 31.79B	12.06	―	2.79%	6.98%	38.45%
JP:6626	70Outperform	JPY 26.14B	7.55	―	2.04%	7.62%	5.20%
JP:6858	65Neutral	JPY 8.33B	9.79	―	3.63%	15.62%	50.30%
Sector *	61Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
JP:6853	60Neutral	JPY 18.76B	26.99	―	2.93%	-3.37%	-32.05%
JP:6635	50Neutral	JPY 3.98B	11.34	―	2.69%	17.17%	109.83%

* Technology Sector Average

Performance Comparison

JP:6635 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:6635	Di-Nikko Engineering Co., Ltd.	594.00	112.44	23.35%
JP:6626	Semitec Corporation	2299.00	133.29	6.15%
JP:6850	Chino Corporation	1793.00	470.53	35.58%
JP:6853	Kyowa Electronic Instruments Co., Ltd.	735.00	96.10	15.04%
JP:6858	Ono Sokki Co., Ltd.	743.00	166.86	28.96%
JP:6863	Nireco Corporation	988.00	388.19	64.72%

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 30, 2026

Di-Nikko Engineering Co., Ltd. AI Stock Analysis