Nippon Aqua Co Ltd

Nippon Aqua maintains a relatively balanced capital structure, with total liabilities of ¥10.53 billion and total equity of ¥8.88 billion, resulting in a debt-to-equity ratio of 0.48. The company holds ¥1.99 billion in cash and equivalents, but its operating cash flow is negative at ¥574.29 million, indicating potential liquidity constraints. The current ratio of 1.39 suggests the company can cover its short-term obligations, but the negative net cash position after subtracting total debt raises concerns about its liquidity risk.

Profitability metrics show mixed performance. The company's return on equity (ROE) is 3.13%, and return on assets (ROA) is 1.43%, both below the industry median for construction supplies and fixtures. Operating income of ¥403.77 million and net income of ¥277.67 million reflect modest profitability, with a gross profit margin of 21.33%. These figures suggest the company is underperforming relative to its peers in terms of capital efficiency and margin generation.

Nippon Aqua's revenue is concentrated in a single business segment, with no disclosed geographic diversification in the provided data. This lack of segment or geographic diversification increases exposure to regional economic fluctuations and sector-specific risks. The company's revenue concentration in construction supplies and fixtures makes it particularly sensitive to cyclical demand in the building products industry.

Looking ahead, the company's growth trajectory appears constrained. The outlook for the current fiscal year shows no significant revenue growth, and the next fiscal year is expected to follow a similar pattern. With capital expenditures at ¥142.49 million, the company is investing in infrastructure but at a modest pace relative to its revenue scale. The absence of strong analyst recommendations (mean recommendation of 2.00) and the uniformity of price targets at ¥1,200.00 JPY suggest limited upside potential in the near term.

The risk assessment highlights medium liquidity risk and low dilution risk. The negative net cash position after subtracting total debt is a key flag, indicating potential pressure to secure additional financing. However, the low dilution risk suggests that the company is not currently issuing shares at a rate that would significantly dilute existing shareholders. No recent dilutive events or capital-raising activities are disclosed in the provided data.

Recent events and filings do not show any material changes in the company's operations or financial strategy. The absence of recent earnings call transcripts or 10-K filings in the provided data limits visibility into management's strategic direction or response to industry challenges. Analysts have not issued strong buy recommendations, and the uniformity of price targets suggests a consensus of limited upside in the near term.

Revenue grew 11.3% year-over-year to JPY 33.7 billion, demonstrating strong top-line expansion momentum.

Net margin of 4.1% outperforms the 3.0% industry median, reflecting effective cost management and profitability.

Analysts project 66.9% upside to a JPY 1,200 target price, signaling significant undervaluation potential.

Return on equity of 3.1% surpasses the 2.7% cohort median, showing better capital utilization than peers.

Cash conversion ratio of -2.07 places the company in the bottom quartile of its peer cohort.

The company faces high credit risk, suggesting potential difficulties in meeting financial obligations or debt servicing.

Debt-to-equity ratio of 0.48 is significantly higher than the 0.29 cohort median, indicating elevated leverage.

Net income growth slowed to just 3.1% year-over-year, despite robust revenue expansion, highlighting margin pressure.

Revenue ¥7.71B, +2,8% YoY; Operating income +3,2% YoY.

• ▍Revenue ¥7.71B, +2,8% YoY
• ▍Operating income +3,2% YoY
• ▍Net income −4,9% YoY
• ▍Net margin 4.4%

Revenue ¥9.38B, −0,7% YoY; Operating income −1,4% YoY.

• ▍Revenue ¥9.38B, −0,7% YoY
• ▍Operating income −1,4% YoY
• ▍Net income −10,8% YoY
• ▍Net margin 7.6%

Revenue ¥8.31B, +7,8% YoY; Operating income −3,7% YoY.

• ▍Revenue ¥8.31B, +7,8% YoY
• ▍Operating income −3,7% YoY
• ▍Net income −5,5% YoY
• ▍Net margin 5.3%

Revenue ¥8.48B, +24,0% YoY; Operating income +39,5% YoY.

• ▍Revenue ¥8.48B, +24,0% YoY
• ▍Operating income +39,5% YoY
• ▍Net income +40,0% YoY
• ▍Net margin 4.6%

Revenue ¥7.50B; Operating income ¥526.3M.

• ▍Revenue ¥7.50B
• ▍Operating income ¥526.3M
• ▍Net margin 4.8%

Revenue ¥9.45B; Operating income ¥1.05B.

• ▍Revenue ¥9.45B
• ▍Operating income ¥1.05B
• ▍Net margin 8.4%

Revenue ¥7.71B; Operating income ¥671.8M.

• ▍Revenue ¥7.71B
• ▍Operating income ¥671.8M
• ▍Net margin 6.0%

Revenue ¥6.84B; Operating income ¥403.8M.

• ▍Revenue ¥6.84B
• ▍Operating income ¥403.8M
• ▍Net margin 4.1%

Revenue ¥33.67B, +11,2% YoY; Operating income +8,1% YoY.

• ▍Revenue ¥33.67B, +11,2% YoY
• ▍Operating income +8,1% YoY
• ▍Net income +3,1% YoY
• ▍Free cash flow −39,8% YoY
• ▍Net margin 5.6%

Revenue ¥30.27B, +6,8% YoY; Operating income −10,8% YoY.

• ▍Revenue ¥30.27B, +6,8% YoY
• ▍Operating income −10,8% YoY
• ▍Net income −8,2% YoY
• ▍Free cash flow −26,2% YoY
• ▍Net margin 6.1%

Revenue ¥28.34B, +10,4% YoY; Operating income +23,4% YoY.

• ▍Revenue ¥28.34B, +10,4% YoY
• ▍Operating income +23,4% YoY
• ▍Net income +29,4% YoY
• ▍Free cash flow +40,4% YoY
• ▍Net margin 7.1%

Revenue ¥25.67B, +7,4% YoY; Operating income +65,1% YoY.

• ▍Revenue ¥25.67B, +7,4% YoY
• ▍Operating income +65,1% YoY
• ▍Net income +62,4% YoY
• ▍Free cash flow +422,4% YoY
• ▍Net margin 6.0%