Announcement • May 12
Kobe Steel, Ltd. (TSE:5406) entered into a share exchange agreement to acquire remaining 56.52% stake in Kobelco Wire Company, Ltd. (TSE:5660) from Nippon Life Insurance Company, Mizuho Trust & Banking Co., Ltd., Shinsho Corporation (TSE:8075), Mizuho Bank, Ltd., Mitsui & Co. Steel Ltd. and Michio Maruyama for ¥6.1 billion. Kobe Steel, Ltd. (TSE:5406) entered into a share exchange agreement to acquire remaining 56.52% stake in Kobelco Wire Company, Ltd. (TSE:5660) from Nippon Life Insurance Company, Mizuho Trust & Banking Co., Ltd., Shinsho Corporation (TSE:8075), Mizuho Bank, Ltd., Mitsui & Co. Steel Ltd. and Michio Maruyama for ¥6.1 billion on May 11, 2026. The consideration consists of 3.14 million common equity of Kobe Steel, Ltd. at an exchange ratio of 0.94 to be issued for common equity of Kobelco Wire Company, Ltd. As part of consideration, ¥6.08 billion is paid towards common equity of Kobelco Wire Company, Ltd. Upon completion, Kobe Steel, Ltd. will own 100% stake in Kobelco Wire Company, Ltd.
The transaction is subject to approval of offer by target shareholders. The expected completion of the transaction is September 1, 2026.
Nomura Securities Co., Ltd. acted as financial advisor for Kobe Steel, Ltd. Industrial Growth Platform, Inc. acted as financial advisor for Kobelco Wire Company, Ltd. Nishimura & Asahi acted as legal advisor for Kobe Steel, Ltd. TMI Associates acted as legal advisor for Kobelco Wire Company, Ltd. Reported Earnings • May 12
Full year 2026 earnings: EPS and revenues miss analyst expectations Full year 2026 results: EPS: JP¥238 (down from JP¥305 in FY 2025). Revenue: JP¥2.44t (down 4.6% from FY 2025). Net income: JP¥93.7b (down 22% from FY 2025). Profit margin: 3.8% (down from 4.7% in FY 2025). The decrease in margin was driven by lower revenue. Revenue missed analyst estimates by 1.5%. Earnings per share (EPS) also missed analyst estimates by 7.3%. Revenue is forecast to grow 1.8% p.a. on average during the next 3 years, compared to a 4.6% growth forecast for the Metals and Mining industry in Japan. Over the last 3 years on average, earnings per share has increased by 4% per year but the company’s share price has increased by 20% per year, which means it is tracking significantly ahead of earnings growth. Announcement • May 11
Kobe Steel, Ltd., Annual General Meeting, Jun 23, 2026 Kobe Steel, Ltd., Annual General Meeting, Jun 23, 2026. Announcement • May 09
Kobe Steel, Ltd. to Report Fiscal Year 2026 Results on May 11, 2026 Kobe Steel, Ltd. announced that they will report fiscal year 2026 results at 1:00 PM, Tokyo Standard Time on May 11, 2026 New Risk • Apr 16
New major risk - Revenue and earnings growth Earnings are forecast to decline by an average of 0.2% per year for the foreseeable future. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are expected to decline, then in most cases the share price will decline over time as well. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 0.2% per year for the foreseeable future. Minor Risks High level of debt (45% net debt to equity). Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Upcoming Dividend • Mar 23
Upcoming dividend of JP¥40.00 per share Eligible shareholders must have bought the stock before 30 March 2026. Payment date: 03 June 2026. Payout ratio is a comfortable 43% and this is well supported by cash flows. Trailing yield: 4.1%. Within top quartile of Japanese dividend payers (3.6%). Higher than average of industry peers (2.5%). Buy Or Sell Opportunity • Feb 24
Now 22% undervalued Over the last 90 days, the stock has risen 15% to JP¥2,226. The fair value is estimated to be JP¥2,837, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has been flat over the last 3 years. Earnings per share has grown by 12%. For the next 3 years, revenue is forecast to grow by 1.5% per annum. Earnings are also forecast to grow by 1.8% per annum over the same time period. Reported Earnings • Feb 07
Third quarter 2026 earnings: EPS and revenues miss analyst expectations Third quarter 2026 results: EPS: JP¥54.61 (down from JP¥117 in 3Q 2025). Revenue: JP¥596.6b (down 6.1% from 3Q 2025). Net income: JP¥21.5b (down 54% from 3Q 2025). Profit margin: 3.6% (down from 7.3% in 3Q 2025). The decrease in margin was driven by lower revenue. Revenue missed analyst estimates by 2.6%. Earnings per share (EPS) also missed analyst estimates by 23%. Revenue is forecast to grow 1.5% p.a. on average during the next 3 years, compared to a 3.3% growth forecast for the Metals and Mining industry in Japan. Over the last 3 years on average, earnings per share has increased by 12% per year but the company’s share price has increased by 45% per year, which means it is tracking significantly ahead of earnings growth. Buy Or Sell Opportunity • Feb 05
Now 20% undervalued Over the last 90 days, the stock has risen 26% to JP¥2,303. The fair value is estimated to be JP¥2,882, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has been flat over the last 3 years. Earnings per share has grown by 21%. For the next 3 years, revenue is forecast to grow by 1.2% per annum. Earnings are forecast to decline by 4.5% per annum over the same time period. Announcement • Feb 02
Kobe Steel, Ltd. (TSE:5406) completed the acquisition of remaining 48.31% stake in Nippon Koshuha Steel Co.,Ltd. (TSE:5476) from a group of shareholders. Kobe Steel, Ltd. (TSE:5406) agreed to acquire remaining 48.31% stake in Nippon Koshuha Steel Co.,Ltd. (TSE:5476) from a group of shareholders for ¥3 billion on May 12, 2025. As part of the consideration Kobe Steel, Ltd. will allot and deliver 0.26 shares of its stock for each share of Nippon Koshuha Steel Co.,Ltd. The consideration is subject to change upon mutual discussion. Upon completion, Kobe Steel, Ltd. will own 100% stake in Nippon Koshuha Steel Co.,Ltd. The transaction is subject to approval by regulatory board / committee, approval of offer by target board, approval of offer by target shareholders and consummation of due diligence investigation. The Board of Directors of Nippon Koshuha Steel Co.,Ltd. formed a special committee for the transaction. The deal has been unanimously approved by the board. The expected completion of the transaction is February 2, 2026.
Nomura Securities Co., Ltd. acted as financial advisor for Kobe Steel, Ltd. Nishimura & Asahi acted as legal advisor for Kobe Steel, Ltd. YAMADA Business Consulting Co.,Ltd. acted as financial advisor for Nippon Koshuha Steel Co.,Ltd. Anderson Mori & Tomotsune acted as legal advisor for Nippon Koshuha Steel Co.,Ltd. Stand by C Co., Ltd. acted as financial advisor for Nippon Koshuha Steel Co.,Ltd. Nomura Securities Co., Ltd. acted as fairness opinion provider for Kobe Steel, Ltd. YAMADA Business Consulting Co.,Ltd. acted as fairness opinion provider for Nippon Koshuha Steel Co.,Ltd.
Kobe Steel, Ltd. (TSE:5406) completed the acquisition of remaining 48.31% stake in Nippon Koshuha Steel Co.,Ltd. (TSE:5476) from a group of shareholders on February 2, 2026. Kobe Steel has transferred all its common shares in Nippon Koshuha Steel to Daido Steel Co., Ltd. Buy Or Sell Opportunity • Jan 19
Now 21% undervalued Over the last 90 days, the stock has risen 30% to JP¥2,276. The fair value is estimated to be JP¥2,864, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has been flat over the last 3 years. Earnings per share has grown by 21%. For the next 3 years, revenue is forecast to grow by 1.1% per annum. Earnings are forecast to decline by 4.5% per annum over the same time period. Announcement • Jan 06
Kobe Steel, Ltd. to Report Q3, 2026 Results on Feb 06, 2026 Kobe Steel, Ltd. announced that they will report Q3, 2026 results at 12:00 PM, Tokyo Standard Time on Feb 06, 2026 Declared Dividend • Dec 02
First half dividend of JP¥40.00 announced Shareholders will receive a dividend of JP¥40.00. Ex-date: 30th March 2026 Payment date: 3rd June 2026 Dividend yield will be 4.2%, which is higher than the industry average of 3.4%. Sustainability & Growth Dividend is well covered by both earnings (30% earnings payout ratio) and cash flows (19% cash payout ratio). The dividend has increased by an average of 7.2% per year over the past 10 years. However, payments have been volatile during that time. EPS is expected to decline by 18% over the next 3 years. However, it would need to fall by 67% to increase the payout ratio to a potentially unsustainable range. New Risk • Nov 11
New major risk - Revenue and earnings growth Earnings are forecast to decline by an average of 4.7% per year for the foreseeable future. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are expected to decline, then in most cases the share price will decline over time as well. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risks Debt is not well covered by operating cash flow (20% operating cash flow to total debt). Earnings are forecast to decline by an average of 4.7% per year for the foreseeable future. Minor Risk Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Announcement • Oct 09
Kobe Steel, Ltd. to Report Q2, 2026 Results on Nov 10, 2025 Kobe Steel, Ltd. announced that they will report Q2, 2026 results at 12:00 PM, Tokyo Standard Time on Nov 10, 2025 Upcoming Dividend • Sep 22
Upcoming dividend of JP¥40.00 per share Eligible shareholders must have bought the stock before 29 September 2025. Payment date: 02 December 2025. Payout ratio is a comfortable 29% and the cash payout ratio is 90%. Trailing yield: 4.4%. Within top quartile of Japanese dividend payers (3.6%). Higher than average of industry peers (3.2%). Reported Earnings • Aug 08
First quarter 2026 earnings: EPS exceeds analyst expectations while revenues lag behind First quarter 2026 results: EPS: JP¥98.03 (up from JP¥60.91 in 1Q 2025). Revenue: JP¥569.1b (down 3.7% from 1Q 2025). Net income: JP¥38.6b (up 61% from 1Q 2025). Profit margin: 6.8% (up from 4.1% in 1Q 2025). The increase in margin was driven by lower expenses. Revenue missed analyst estimates by 7.7%. Earnings per share (EPS) exceeded analyst estimates by 34%. Revenue is forecast to stay flat during the next 3 years compared to a 2.7% growth forecast for the Metals and Mining industry in Japan. Over the last 3 years on average, earnings per share has increased by 24% per year but the company’s share price has increased by 43% per year, which means it is tracking significantly ahead of earnings growth. Declared Dividend • Jul 09
Final dividend of JP¥40.00 announced Shareholders will receive a dividend of JP¥40.00. Ex-date: 29th September 2025 Payment date: 2nd December 2025 Dividend yield will be 5.9%, which is higher than the industry average of 3.4%. Sustainability & Growth Dividend is covered by both earnings (33% earnings payout ratio) and cash flows (89.9% cash payout ratio). The dividend has increased by an average of 7.2% per year over the past 10 years. However, payments have been volatile during that time. EPS is expected to decline by 8.2% over the next 3 years. However, it would need to fall by 64% to increase the payout ratio to a potentially unsustainable range. Announcement • Jul 03
Kobe Steel, Ltd. to Report Q1, 2026 Results on Aug 07, 2025 Kobe Steel, Ltd. announced that they will report Q1, 2026 results on Aug 07, 2025 New Risk • Jun 25
New major risk - Revenue and earnings growth Earnings are forecast to decline by an average of 2.9% per year for the foreseeable future. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are expected to decline, then in most cases the share price will decline over time as well. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risks Debt is not well covered by operating cash flow (18% operating cash flow to total debt). Earnings are forecast to decline by an average of 2.9% per year for the foreseeable future. Minor Risk Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Reported Earnings • Jun 21
Full year 2025 earnings: EPS and revenues miss analyst expectations Full year 2025 results: EPS: JP¥305 (up from JP¥277 in FY 2024). Revenue: JP¥2.56t (flat on FY 2024). Net income: JP¥120.2b (up 9.7% from FY 2024). Profit margin: 4.7% (up from 4.3% in FY 2024). Revenue missed analyst estimates by 1.0%. Earnings per share (EPS) also missed analyst estimates by 8.0%. Revenue is forecast to stay flat during the next 3 years compared to a 2.2% growth forecast for the Metals and Mining industry in Japan. Over the last 3 years on average, earnings per share has increased by 23% per year but the company’s share price has increased by 36% per year, which means it is tracking significantly ahead of earnings growth. Announcement • May 13
Kobe Steel, Ltd. (TSE:5406) announces an Equity Buyback for 1,900,000 shares, representing 0.48% for ¥3,900 million. Kobe Steel, Ltd. (TSE:5406) announces a share repurchase program. Under the program, the company will repurchase up to 1,900,000 shares, representing 0.48% of its issued share capital, for ¥3,900 million. The purpose of the buyback is to issue shares to shareholders of Nippon Koshuha Steel Co., Ltd. when it becomes a wholly owned subsidiary through a share exchange. The program will expire on June 9, 2025. As of March 31, 2025, the company had 396,064,263 shares in issue (excluding treasury stock) and 281,700 shares in treasury. Reported Earnings • May 13
Full year 2025 earnings: EPS and revenues miss analyst expectations Full year 2025 results: EPS: JP¥305 (up from JP¥277 in FY 2024). Revenue: JP¥2.56t (flat on FY 2024). Net income: JP¥120.2b (up 9.7% from FY 2024). Profit margin: 4.7% (up from 4.3% in FY 2024). Revenue missed analyst estimates by 1.0%. Earnings per share (EPS) also missed analyst estimates by 7.8%. Revenue is forecast to stay flat during the next 3 years compared to a 1.4% growth forecast for the Metals and Mining industry in Japan. Over the last 3 years on average, earnings per share has increased by 23% per year but the company’s share price has increased by 37% per year, which means it is tracking significantly ahead of earnings growth. Announcement • Apr 25
Court Dismisses the Appeal Against Kobe Steel and Kobelco Power Kobe No. 2, Inc Kobe Steel, Ltd. announced that the Osaka High Court handed down a judgement dismissing the appeal by the appellants against the Kobe District Court's judgement that dismissed the plaintiffs' claims raised against the Company and its wholly owned subsidiary Kobelco Power Kobe No. 2 Inc. on March 20, 2023, as announced in the press release "Legal appeal filed against Kobe Steel and a Group company" as of June 29, 2023. The Companies undertook environmental impact assessment procedures for the plan to build the Kobe Power Plant's No. 3 and No. 4 units (hereinafter, the new power plant), which are currently in operation at 2, Nadahama Higashicho, Nada-ku, Kobe, Hyogo Prefecture (the procedures completed on June 25, 2018, with the end of the public inspection period for the environmental impact assessment report), as well as made efforts to provide information and explanations in order to gain the understanding of the parties involved, including the residents of the immediate area. Despite such efforts, a lawsuit demanding injunctions on the construction of the new power plant was filed from those who claimed that by living in the vicinity of the new power plant site, they could suffer from the operation. The lawsuit was dismissed by the Kobe District Court as the court of first instance, but the appellants were dissatisfied with the judgement of the first instance and thereby filed the appeal. 34 people who claim to be living in the vicinity of the new power plant. The appellants sought a judgment to rescind the judgment of the first instance and to order the Companies and one other company to stop the operation of the new plant. This judgement has no impact on the Companies' business performance. If the appellants appeal to the Supreme Court, we will continue to respond appropriately. Buy Or Sell Opportunity • Apr 07
Now 24% undervalued after recent price drop Over the last 90 days, the stock has fallen 5.8% to JP¥1,488. The fair value is estimated to be JP¥1,954, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 7.7% over the last 3 years. Earnings per share has grown by 21%. For the next 3 years, revenue is forecast to grow by 0.6% per annum. Earnings are forecast to decline by 3.0% per annum over the same time period. Announcement • Apr 01
Kobe Steel, Ltd. to Report Fiscal Year 2025 Results on May 12, 2025 Kobe Steel, Ltd. announced that they will report fiscal year 2025 results on May 12, 2025 Upcoming Dividend • Mar 21
Upcoming dividend of JP¥55.00 per share Eligible shareholders must have bought the stock before 28 March 2025. Payment date: 02 June 2025. Payout ratio is a comfortable 35% but the company is not cash flow positive. Trailing yield: 5.9%. Within top quartile of Japanese dividend payers (3.7%). Higher than average of industry peers (4.1%). New Risk • Feb 08
New major risk - Revenue and earnings growth Earnings are forecast to decline by an average of 0.8% per year for the foreseeable future. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are expected to decline, then in most cases the share price will decline over time as well. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risks Debt is not well covered by operating cash flow (6.5% operating cash flow to total debt). Earnings are forecast to decline by an average of 0.8% per year for the foreseeable future. Minor Risk Paying a dividend despite having no free cash flows. Announcement • Feb 08
Kobe Steel, Ltd. Provides Consolidated Earning Guidance for the Full Year Ending March 31, 2025 Kobe Steel, Ltd. provided Consolidated earning guidance for the full year ending March 31, 2025. For the year company expects net sales to be JPY 2,580,000 million; Operating profit JPY 150,00 million; Profit attributable to owners of parent JPY 130,000 million; and Basic earnings per share JPY 329.52. Announcement • Feb 07
Kobe Steel, Ltd. Revises Dividend Guidance for the Fiscal Year Ending March 31, 2025 Kobe Steel, Ltd. revised dividend guidance for the fiscal year ending March 31, 2025. For the quarter, the company now expects to pay a dividend of JPY 55.00 per share against previous guidance of JPY 45.00 per share. Reason for revision: Kobe Steel considers the return of profits to shareholders to be one of its top management priorities and strives to enhance the corporate value of the entire Group by promoting business development from a medium- to long-term perspective. The Company determines dividends taking its financial condition, business performance, future capital needs and other factors into overall consideration with the aim of paying dividends on a continuous and steady basis in principle. The target dividend payout ratio is set at approximately 30% of profit attributable to owners of parent. In accordance with this policy, the Company has decided to revise its dividend forecast to increase the year-end dividend to JPY 55 per share (annual dividend: JPY 100), a JPY 10 increase from the previous forecast, based on the profit attributable to owners of parent projected for fiscal 2024. Price Target Changed • Jan 31
Price target decreased by 7.8% to JP¥1,840 Down from JP¥1,996, the current price target is an average from 7 analysts. New target price is 11% above last closing price of JP¥1,660. Stock is down 19% over the past year. The company is forecast to post earnings per share of JP¥285 for next year compared to JP¥277 last year. Announcement • Jan 14
Kobe Steel, Ltd. to Report Q3, 2025 Results on Feb 07, 2025 Kobe Steel, Ltd. announced that they will report Q3, 2025 results at 1:00 PM, Tokyo Standard Time on Feb 07, 2025 Price Target Changed • Jan 09
Price target decreased by 10% to JP¥1,920 Down from JP¥2,142, the current price target is an average from 5 analysts. New target price is 24% above last closing price of JP¥1,553. Stock is down 20% over the past year. The company is forecast to post earnings per share of JP¥284 for next year compared to JP¥277 last year. Price Target Changed • Dec 09
Price target decreased by 8.5% to JP¥1,996 Down from JP¥2,182, the current price target is an average from 5 analysts. New target price is 32% above last closing price of JP¥1,517. Stock is down 9.2% over the past year. The company is forecast to post earnings per share of JP¥288 for next year compared to JP¥277 last year. Declared Dividend • Dec 03
First half dividend of JP¥45.00 announced Dividend of JP¥45.00 is the same as last year. Ex-date: 28th March 2025 Payment date: 2nd June 2025 Dividend yield will be 5.7%, which is higher than the industry average of 3.4%. Sustainability & Growth Dividend is covered by earnings (41% earnings payout ratio) but the company has no free cash flows available, indicating it may be using cash reserves or debt to pay the dividend. The dividend has increased by an average of 8.4% per year over the past 10 years. However, payments have been volatile during that time. EPS is expected to grow by 4.0% over the next 3 years, which should provide support to the dividend and adequate earnings cover. Announcement • Nov 26
JEOL Ltd. (TSE:6951) agreed to acquire an additional majority stake in Japan Superconductor Technology, Inc. from Kobe Steel, Ltd. (TSE:5406). JEOL Ltd. (TSE:6951) agreed to acquire an additional majority stake in Japan Superconductor Technology, Inc. from Kobe Steel, Ltd. (TSE:5406) on November 22, 2024. Post the closing of the transaction, Kobe Steel will not hold any stake in Japan Superconductor Technology.
For the period ending March 31, 2024, Japan Superconductor Technology, Inc. reported total revenue of ¥4.14 billion.
The expected completion of the transaction is January 6, 2025. New Risk • Nov 14
New major risk - Financial position The company's debt is not well covered by operating cash flow. Operating cash flow to total debt ratio: 7.2% This is considered a major risk. If the company's operating cash flows are too small relative to the size of their debt, it increases their balance sheet risk. The company has less cash from operations to cover its expenses from servicing large debt and it increases the risk of liquidity issues. It also extends the time it would take for the company to pay back the debt in full, meaning it may not be able to easily pay it all off in a distress scenario. Currently, the following risks have been identified for the company: Major Risk Debt is not well covered by operating cash flow (7.2% operating cash flow to total debt). Minor Risks Paying a dividend despite having no free cash flows. Profit margins are more than 30% lower than last year (3.4% net profit margin). Reported Earnings • Nov 09
First half 2025 earnings: EPS exceeds analyst expectations First half 2025 results: EPS: JP¥143 (down from JP¥203 in 1H 2024). Revenue: JP¥1.25t (flat on 1H 2024). Net income: JP¥56.6b (down 30% from 1H 2024). Profit margin: 4.5% (down from 6.4% in 1H 2024). Revenue was in line with analyst estimates. Earnings per share (EPS) surpassed analyst estimates by 35%. Revenue is forecast to grow 1.5% p.a. on average during the next 3 years, compared to a 2.7% growth forecast for the Metals and Mining industry in Japan. Over the last 3 years on average, earnings per share has increased by 19% per year but the company’s share price has increased by 41% per year, which means it is tracking significantly ahead of earnings growth. New Risk • Nov 09
New minor risk - Profit margin trend The company's profit margins are lower than last year and have reduced by more than 30%. Net profit margin: 3.4% Last year net profit margin: 4.9% This is considered a minor risk. A large drop in profit margin could indicate the company does not have strong competitive advantages or it is yet to establish itself and its core business. Even if it is a well established business, this may make it a much riskier investment than one that has a combination of proven competitive advantages and a stable or growing profit margin. Currently, the following risks have been identified for the company: Minor Risks High level of debt (51% net debt to equity). Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Profit margins are more than 30% lower than last year (3.4% net profit margin). Announcement • Oct 07
Kobe Steel, Ltd. to Report Q2, 2025 Results on Nov 07, 2024 Kobe Steel, Ltd. announced that they will report Q2, 2025 results at 3:30 PM, Tokyo Standard Time on Nov 07, 2024 Upcoming Dividend • Sep 20
Upcoming dividend of JP¥45.00 per share Eligible shareholders must have bought the stock before 27 September 2024. Payment date: 02 December 2024. Payout ratio is a comfortable 33% and this is well supported by cash flows. Trailing yield: 5.2%. Within top quartile of Japanese dividend payers (3.8%). Higher than average of industry peers (4.3%). New Risk • Aug 05
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of Japanese stocks, typically moving 6.0% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 0.02% per year for the foreseeable future. Minor Risks High level of debt (48% net debt to equity). Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Share price has been volatile over the past 3 months (6.0% average weekly change). Valuation Update With 7 Day Price Move • Aug 05
Investor sentiment deteriorates as stock falls 21% After last week's 21% share price decline to JP¥1,477, the stock trades at a forward P/E ratio of 5x. Average forward P/E is 8x in the Metals and Mining industry in Japan. Total returns to shareholders of 157% over the past three years. Simply Wall St's valuation model estimates the intrinsic value at JP¥2,280 per share. Buy Or Sell Opportunity • Aug 02
Now 24% undervalued after recent price drop Over the last 90 days, the stock has fallen 8.6% to JP¥1,721. The fair value is estimated to be JP¥2,273, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 14% over the last 3 years. Earnings per share has grown by 30%. For the next 3 years, revenue is forecast to grow by 1.6% per annum. Earnings are forecast to decline by 0.02% per annum over the same time period. New Risk • Jul 19
New major risk - Revenue and earnings growth Earnings are forecast to decline by an average of 0.02% per year for the foreseeable future. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are expected to decline, then in most cases the share price will decline over time as well. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 0.02% per year for the foreseeable future. Minor Risks High level of debt (48% net debt to equity). Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Announcement • Jul 13
Kobe Steel, Ltd. to Report Q1, 2025 Results on Aug 07, 2024 Kobe Steel, Ltd. announced that they will report Q1, 2025 results on Aug 07, 2024 Declared Dividend • Jul 11
Final dividend of JP¥45.00 announced Shareholders will receive a dividend of JP¥45.00. Ex-date: 27th September 2024 Payment date: 2nd December 2024 Dividend yield will be 4.5%, which is higher than the industry average of 3.4%. Sustainability & Growth Dividend is well covered by both earnings (32% earnings payout ratio) and cash flows (32% cash payout ratio). The dividend has increased by an average of 8.4% per year over the past 10 years. However, payments have been volatile during that time. EPS is expected to decline by 2.0% over the next 3 years. However, it would need to fall by 64% to increase the payout ratio to a potentially unsustainable range. Reported Earnings • Jun 23
Full year 2024 earnings: EPS and revenues miss analyst expectations Full year 2024 results: EPS: JP¥277 (up from JP¥184 in FY 2023). Revenue: JP¥2.54t (up 2.9% from FY 2023). Net income: JP¥109.6b (up 51% from FY 2023). Profit margin: 4.3% (up from 2.9% in FY 2023). The increase in margin was driven by higher revenue. Revenue missed analyst estimates by 2.2%. Earnings per share (EPS) also missed analyst estimates by 12%. Revenue is forecast to grow 1.5% p.a. on average during the next 3 years, compared to a 3.1% growth forecast for the Metals and Mining industry in Japan. Over the last 3 years on average, earnings per share has increased by 30% per year but the company’s share price has increased by 39% per year, which means it is tracking significantly ahead of earnings growth. Reported Earnings • May 11
Full year 2024 earnings: EPS and revenues miss analyst expectations Full year 2024 results: EPS: JP¥277 (up from JP¥184 in FY 2023). Revenue: JP¥2.54t (up 2.9% from FY 2023). Net income: JP¥109.6b (up 51% from FY 2023). Profit margin: 4.3% (up from 2.9% in FY 2023). The increase in margin was driven by higher revenue. Revenue missed analyst estimates by 2.2%. Earnings per share (EPS) also missed analyst estimates by 12%. Revenue is forecast to grow 1.3% p.a. on average during the next 3 years, compared to a 3.6% growth forecast for the Metals and Mining industry in Japan. Over the last 3 years on average, earnings per share has increased by 30% per year but the company’s share price has increased by 37% per year, which means it is tracking significantly ahead of earnings growth. Announcement • May 11
Kobe Steel, Ltd., Annual General Meeting, Jun 19, 2024 Kobe Steel, Ltd., Annual General Meeting, Jun 19, 2024. Announcement • Apr 12
Kobe Steel, Ltd. to Report Fiscal Year 2024 Results on May 09, 2024 Kobe Steel, Ltd. announced that they will report fiscal year 2024 results on May 09, 2024 Upcoming Dividend • Mar 21
Upcoming dividend of JP¥45.00 per share Eligible shareholders must have bought the stock before 28 March 2024. Payment date: 03 June 2024. Payout ratio is a comfortable 21% and this is well supported by cash flows. Trailing yield: 4.3%. Within top quartile of Japanese dividend payers (3.2%). Higher than average of industry peers (3.5%). Reported Earnings • Feb 10
Third quarter 2024 earnings released: EPS: JP¥74.39 (vs JP¥49.39 in 3Q 2023) Third quarter 2024 results: EPS: JP¥74.39 (up from JP¥49.39 in 3Q 2023). Revenue: JP¥619.9b (flat on 3Q 2023). Net income: JP¥29.4b (up 51% from 3Q 2023). Profit margin: 4.7% (up from 3.2% in 3Q 2023). Revenue is forecast to stay flat during the next 3 years compared to a 2.8% growth forecast for the Metals and Mining industry in Japan. Over the last 3 years on average, earnings per share has increased by 52% per year but the company’s share price has only increased by 46% per year, which means it is significantly lagging earnings growth. Announcement • Dec 21
Kobe Steel, Ltd. to Report Q3, 2024 Results on Feb 09, 2024 Kobe Steel, Ltd. announced that they will report Q3, 2024 results on Feb 09, 2024 Buying Opportunity • Dec 08
Now 20% undervalued after recent price drop Over the last 90 days, the stock is down 19%. The fair value is estimated to be JP¥2,051, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 16% over the last 3 years. Meanwhile, the company has become profitable. For the next 3 years, revenue is forecast to grow by 0.6% per annum. Earnings is forecast to decline by 7.0% per annum over the same time period. Price Target Changed • Nov 24
Price target increased by 7.9% to JP¥1,942 Up from JP¥1,800, the current price target is an average from 6 analysts. New target price is 10% above last closing price of JP¥1,761. Stock is up 179% over the past year. The company is forecast to post earnings per share of JP¥303 for next year compared to JP¥184 last year. Reported Earnings • Nov 10
Second quarter 2024 earnings: EPS exceeds analyst expectations Second quarter 2024 results: EPS: JP¥139 (up from JP¥17.65 in 2Q 2023). Revenue: JP¥655.1b (up 4.5% from 2Q 2023). Net income: JP¥54.9b (up JP¥47.9b from 2Q 2023). Profit margin: 8.4% (up from 1.1% in 2Q 2023). The increase in margin was primarily driven by higher revenue. Revenue was in line with analyst estimates. Earnings per share (EPS) surpassed analyst estimates by 17%. Revenue is forecast to stay flat during the next 3 years compared to a 1.3% growth forecast for the Metals and Mining industry in Japan. Over the last 3 years on average, earnings per share has increased by 67% per year but the company’s share price has only increased by 53% per year, which means it is significantly lagging earnings growth. Upcoming Dividend • Sep 21
Upcoming dividend of JP¥45.00 per share at 1.9% yield Eligible shareholders must have bought the stock before 28 September 2023. Payment date: 01 December 2023. Payout ratio is a comfortable 21% and the cash payout ratio is 86%. Trailing yield: 1.9%. Lower than top quartile of Japanese dividend payers (3.3%). Lower than average of industry peers (3.2%). Announcement • Sep 05
Kobe Steel, Ltd. to Report Q2, 2024 Results on Nov 09, 2023 Kobe Steel, Ltd. announced that they will report Q2, 2024 results on Nov 09, 2023 Price Target Changed • Aug 22
Price target increased by 15% to JP¥1,570 Up from JP¥1,368, the current price target is an average from 6 analysts. New target price is 6.8% below last closing price of JP¥1,684. Stock is up 175% over the past year. The company is forecast to post earnings per share of JP¥254 for next year compared to JP¥184 last year. Price Target Changed • Aug 17
Price target increased by 12% to JP¥1,452 Up from JP¥1,302, the current price target is an average from 6 analysts. New target price is 15% below last closing price of JP¥1,717. Stock is up 180% over the past year. The company is forecast to post earnings per share of JP¥230 for next year compared to JP¥184 last year. Reported Earnings • Aug 09
First quarter 2024 earnings released: EPS: JP¥64.45 (vs JP¥53.32 in 1Q 2023) First quarter 2024 results: EPS: JP¥64.45 (up from JP¥53.32 in 1Q 2023). Revenue: JP¥598.7b (up 10% from 1Q 2023). Net income: JP¥25.5b (up 21% from 1Q 2023). Profit margin: 4.3% (up from 3.9% in 1Q 2023). The increase in margin was driven by higher revenue. Revenue is forecast to grow 1.1% p.a. on average during the next 3 years, while revenues in the Metals and Mining industry in Japan are expected to remain flat. Over the last 3 years on average, earnings per share has increased by 77% per year but the company’s share price has only increased by 64% per year, which means it is significantly lagging earnings growth.