Toppan (TSE:7911) - Share price, News & Analysis

Q: What is the Fair Price of 7911 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

7911 (¥2267) is trading below our estimate of [[fair value]] (¥3027.71)

7911 fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	0/6
Past Performance	4/6
Financial Health	6/6
Dividends	4/6

7911 Stock Overview

Toppan Inc. develops solutions based on its printing technologies worldwide.

Rewards

Trading at 25.1% below our estimate of its fair value

Earnings grew by 50.2% over the past year

Risk Analysis

Earnings are forecast to decline by an average of 19% per year for the next 3 years

Dividend of 1.94% is not well covered by earnings

Large one-off items impacting financial results

Toppan Competitors

Dai Nippon Printing

TSE:7912

JP¥787.3b

KOSAIDO HoldingsLtd

TSE:7868

JP¥31.4b

Raksul

TSE:4384

JP¥54.0b

PRONEXUS

TSE:7893

JP¥27.3b

Price History & Performance

Summary of all time highs, changes and price drops for Toppan
Historical stock prices
Current Share Price	JP¥2,267.00
52 Week High	JP¥2,482.00
52 Week Low	JP¥1,692.00
Beta	1.02
1 Month Change	-7.81%
3 Month Change	4.71%
1 Year Change	24.63%
3 Year Change	29.40%
5 Year Change	-5.62%
Change since IPO	-14.38%

Shareholder Returns

	7911	JP Commercial Services	JP Market
7D	0.1%	2.5%	2.3%
1Y	24.6%	-0.7%	-3.9%

Return vs Industry: 7911 exceeded the JP Commercial Services industry which returned -0.7% over the past year.

Return vs Market: 7911 exceeded the JP Market which returned -3.9% over the past year.

Price Volatility

Is 7911's price volatile compared to industry and market?
7911 volatility
7911 Average Weekly Movement	3.9%
Commercial Services Industry Average Movement	3.8%
Market Average Movement	4.2%
10% most volatile stocks in JP Market	8.4%
10% least volatile stocks in JP Market	2.2%

Stable Share Price: 7911 is not significantly more volatile than the rest of JP stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: 7911's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1900	52,401	Hideharu Maro	https://www.toppan.co.jp

Toppan Inc. develops solutions based on its printing technologies worldwide. The company offers security documents, business forms, data printing services, smart and other cards, in-store instant smart cards, gift card ASP services, RFID tags and solutions, counterfeit prevention devices, and payment services; and content and marketing services, such as books, magazines, supplements, textbooks, e-books, flyers, catalogs, pamphlets, promotional tools, space design, event planning and implantation services, digital content, and digital marketing services. It also provides back-office operations services, customer contact operations, and operations support services; flexible packaging, folding cartons, composite liquid containers, plastic molded goods, corrugated fiberboards, sustainable packaging development, and contract-based filling services; decorative sheets, flooring materials, decorative panels, and exterior and flame retardant products and materials; transparent barrier films, media and supplies for printers, electronics packaging materials, lithium-ion battery-related materials, and precision processed and exterior decorated components; and photomasks, LSI design services, FC-BGA substrates, lead frames, etched products, on-chip color filter arrays, and nanoimprint molds.

Toppan Fundamentals Summary

How do Toppan's earnings and revenue compare to its market cap?
7911 fundamental statistics
Market Cap	JP¥751.41b
Earnings (TTM)	JP¥123.18b
Revenue (TTM)	JP¥1.55t

6.1x

P/E Ratio

0.5x

P/S Ratio

Is 7911 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
7911 income statement (TTM)
Revenue	JP¥1.55t
Cost of Revenue	JP¥1.21t
Gross Profit	JP¥334.76b
Other Expenses	JP¥211.58b
Earnings	JP¥123.18b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 05, 2022

Earnings per share (EPS)	371.64
Gross Margin	21.63%
Net Profit Margin	7.96%
Debt/Equity Ratio	17.7%

How did 7911 perform over the long term?

See historical performance and comparison

Dividends

1.9%

Current Dividend Yield

12%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 7911 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 7911?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 7911. This is calculated by dividing 7911's market cap by their current preferred multiple.
What is 7911's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	JP¥751.41b

7911 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.4x
Enterprise Value/EBITDA	4.4x
PEG Ratio	-0.3x

Price to Earnings Ratio vs Peers

How does 7911's PE Ratio compare to its peers?

7911 PE Ratio vs Peers

The above table shows the PE ratio for 7911 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	94.2x
7912 Dai Nippon Printing	8.1x	-9.1%	JP¥787.3b
7868 KOSAIDO HoldingsLtd	8.6x	n/a	JP¥31.4b
4384 Raksul	344.4x	n/a	JP¥54.0b
7893 PRONEXUS	15.5x	n/a	JP¥27.3b
7911 Toppan	6.1x	-19.0%	JP¥751.4b

Forward PE

Price-To-Earnings vs Peers: 7911 is good value based on its Price-To-Earnings Ratio (6.1x) compared to the peer average (94.2x).

Price to Earnings Ratio vs Industry

How does 7911's PE Ratio compare vs other companies in the JP Commercial Services Industry?

Price-To-Earnings vs Industry: 7911 is good value based on its Price-To-Earnings Ratio (6.1x) compared to the JP Commercial Services industry average (13.1x)

Price to Earnings Ratio vs Fair Ratio

What is 7911's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

7911 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	6.1x
Fair PE Ratio	14x

Price-To-Earnings vs Fair Ratio: 7911 is good value based on its Price-To-Earnings Ratio (6.1x) compared to the estimated Fair Price-To-Earnings Ratio (14x).

Share Price vs Fair Value

What is the Fair Price of 7911 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 7911 (¥2267) is trading below our estimate of fair value (¥3027.71)

Significantly Below Fair Value: 7911 is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: 7911's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

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Future Growth

How is Toppan forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-19.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 7911's earnings are forecast to decline over the next 3 years (-19% per year).

Earnings vs Market: 7911's earnings are forecast to decline over the next 3 years (-19% per year).

High Growth Earnings: 7911's earnings are forecast to decline over the next 3 years.

Revenue vs Market: 7911's revenue (1.8% per year) is forecast to grow slower than the JP market (4.4% per year).

High Growth Revenue: 7911's revenue (1.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 7911's Return on Equity is forecast to be low in 3 years time (3.1%).

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Past Performance

How has Toppan performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

24.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 7911 has a large one-off gain of ¥104.6B impacting its March 31 2022 financial results.

Growing Profit Margin: 7911's current net profit margins (8%) are higher than last year (5.6%).

Past Earnings Growth Analysis

Earnings Trend: 7911's earnings have grown significantly by 24.6% per year over the past 5 years.

Accelerating Growth: 7911's earnings growth over the past year (50.2%) exceeds its 5-year average (24.6% per year).

Earnings vs Industry: 7911 earnings growth over the past year (50.2%) exceeded the Commercial Services industry 31%.

Return on Equity

High ROE: 7911's Return on Equity (9%) is considered low.

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Financial Health

How is Toppan's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 7911's short term assets (¥1,050.7B) exceed its short term liabilities (¥496.1B).

Long Term Liabilities: 7911's short term assets (¥1,050.7B) exceed its long term liabilities (¥354.9B).

Debt to Equity History and Analysis

Debt Level: 7911 has more cash than its total debt.

Reducing Debt: 7911's debt to equity ratio has reduced from 21.5% to 17.7% over the past 5 years.

Debt Coverage: 7911's debt is well covered by operating cash flow (25.5%).

Interest Coverage: 7911 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Toppan current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.94%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 7911's dividend (1.94%) is higher than the bottom 25% of dividend payers in the JP market (1.67%).

High Dividend: 7911's dividend (1.94%) is low compared to the top 25% of dividend payers in the JP market (3.67%).

Stability and Growth of Payments

Stable Dividend: 7911's dividends per share have been stable in the past 10 years.

Growing Dividend: 7911's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (12%), 7911's dividend payments are thoroughly covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (153.8%), 7911's dividend payments are not well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.4yrs

Average management tenure

CEO

Hideharu Maro

3.42yrs

Tenure

JP¥148,000,000

Compensation

Mr. Hideharu Maro serves as a Representative Director of Toppan Printing Co., Ltd. since 2018 and its President since 2019. He was an Executive Vice President of Toppan Printing Co., Ltd.since 2018, overs...

CEO Compensation Analysis

Compensation vs Market: Hideharu's total compensation ($USD1.08M) is about average for companies of similar size in the JP market ($USD1.10M).

Compensation vs Earnings: Hideharu's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: 7911's management team is considered experienced (3.4 years average tenure).

Board Members

Experienced Board: 7911's board of directors are considered experienced (8.4 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/30 00:00
End of Day Share Price	2022/06/30 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31