Nippon Kinzoku Co Ltd

Nippon Kinzoku's capital structure is characterized by a debt-to-equity ratio of 0.93, indicating a moderate reliance on debt financing. The company's liquidity position is assessed as medium, with a current ratio of 1.4, suggesting it can cover its short-term obligations but with limited buffer. The company's price-to-book ratio of 0.22 and price-to-tangible-book ratio of 0.22 indicate that the market values the company's equity at a significant discount to its book value.

Profitability metrics show a challenging performance, with a negative return on equity of -1.56% and a negative return on assets of -0.56%. These figures are below the industry median for the Iron & Steel sector, which typically sees positive returns, indicating that Nippon Kinzoku is underperforming its peers in terms of capital efficiency and asset utilization.

The company's revenue is concentrated in a single business segment, with no disclosed geographic diversification in the provided data. This lack of diversification increases the company's exposure to regional economic fluctuations and regulatory changes, which could impact its revenue stability.

Looking at the growth trajectory, the company's operating income and net income are both negative, with operating income at -398 million JPY and net income at -419 million JPY. The company's capital expenditures of -2.712 billion JPY suggest a significant investment in infrastructure or expansion, but the negative operating cash flow of 5 million JPY indicates that the company is not generating sufficient cash from operations to support these investments.

The risk assessment highlights a key flag: net cash is negative after subtracting total debt, which suggests that the company's cash reserves are insufficient to cover its long-term obligations. The dilution risk is assessed as low, with no immediate pressure for share issuance, and the company's liquidity risk is moderate, indicating that while the company can meet its short-term obligations, it may face challenges in the medium term.

Recent events, as reflected in the financial data, show a decline in profitability and a significant investment in capital expenditures. The company's last actual EPS was 105.02 JPY, and its last actual revenue was 51.298 billion JPY, both of which are below the current revenue of 13.491 billion JPY. This suggests a recent downturn in the company's financial performance, which may be due to market conditions or operational inefficiencies.

Free cash flow surged 110.4% year-over-year to JPY 1.3 billion, demonstrating improved operational cash generation capabilities.

Long-term debt decreased to JPY 22.0 billion in FY2025, indicating a deliberate strategy to reduce leverage and strengthen the balance sheet.

Revenue maintained a 6.3% compound annual growth rate over four years, showing consistent top-line expansion despite recent volatility.

Operating income improved by 80.3% year-over-year, suggesting a recovery in core operational profitability metrics for the latest period.

Gross profit increased to JPY 5.1 billion in FY2025, reflecting better cost management or pricing power in the production process.

The company carries a high credit risk flag, indicating significant concerns regarding its ability to meet financial obligations.

Debt-to-equity ratio of 0.93 ranks in the bottom quartile, exposing the company to higher financial distress risk than peers.

Revenue ¥12.89B, −2,2% YoY; Operating income +1 162,5% YoY.

• ▍Revenue ¥12.89B, −2,2% YoY
• ▍Operating income +1 162,5% YoY
• ▍Net income +608,0% YoY
• ▍Net margin 1.0%

Revenue ¥11.71B, −8,3% YoY; Operating income +241,9% YoY.

• ▍Revenue ¥11.71B, −8,3% YoY
• ▍Operating income +241,9% YoY
• ▍Net income +191,5% YoY
• ▍Net margin 1.8%

Revenue ¥12.58B, −3,4% YoY; Operating income +175,5% YoY.

• ▍Revenue ¥12.58B, −3,4% YoY
• ▍Operating income +175,5% YoY
• ▍Net income +106,7% YoY
• ▍Net margin 0.1%

Revenue ¥12.32B, −8,7% YoY; Operating income +90,2% YoY.

• ▍Revenue ¥12.32B, −8,7% YoY
• ▍Operating income +90,2% YoY
• ▍Net income +359,2% YoY
• ▍Net margin 8.8%

Revenue ¥13.19B; Operating income -¥32.0M.

• ▍Revenue ¥13.19B
• ▍Operating income -¥32.0M
• ▍Net margin -0.2%

Revenue ¥12.77B; Operating income -¥117.0M.

• ▍Revenue ¥12.77B
• ▍Operating income -¥117.0M
• ▍Net margin -1.8%

Revenue ¥13.02B; Operating income -¥163.0M.

• ▍Revenue ¥13.02B
• ▍Operating income -¥163.0M
• ▍Net margin -1.0%

Revenue ¥13.49B; Operating income -¥398.0M.

• ▍Revenue ¥13.49B
• ▍Operating income -¥398.0M
• ▍Net margin -3.1%

Revenue ¥51.30B, −0,2% YoY; Operating income +80,3% YoY.

• ▍Revenue ¥51.30B, −0,2% YoY
• ▍Operating income +80,3% YoY
• ▍Net income −54,5% YoY
• ▍Free cash flow +110,4% YoY
• ▍Net margin 1.4%

Revenue ¥51.41B, −2,2% YoY; Operating income −234,0% YoY.

• ▍Revenue ¥51.41B, −2,2% YoY
• ▍Operating income −234,0% YoY
• ▍Net income +68,5% YoY
• ▍Free cash flow +132,5% YoY
• ▍Net margin 3.0%

Revenue ¥52.57B, +7,0% YoY; Operating income −61,4% YoY.

• ▍Revenue ¥52.57B, +7,0% YoY
• ▍Operating income −61,4% YoY
• ▍Net income −63,6% YoY
• ▍Free cash flow −230,4% YoY
• ▍Net margin 1.7%

Revenue ¥49.12B, +22,5% YoY; Operating income +824,4% YoY.

• ▍Revenue ¥49.12B, +22,5% YoY
• ▍Operating income +824,4% YoY
• ▍Net income +1 012,3% YoY
• ▍Free cash flow +247,9% YoY
• ▍Net margin 5.1%