Nichicon (TSE:6996) - Share price, News & Analysis

Q: What is the Fair Price of 6996 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

6996 (¥1205) is trading below our estimate of [[fair value]] (¥3193.47)

6996 fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	2/6
Past Performance	5/6
Financial Health	5/6
Dividends	4/6

6996 Stock Overview

Rewards

Trading at 62.3% below our estimate of its fair value

Earnings are forecast to grow 3.72% per year

Earnings grew by 364% over the past year

Risk Analysis

Dividend of 2.32% is not well covered by earnings

Nichicon Competitors

Iriso Electronics

TSE:6908

JP¥75.0b

Meiko Electronics

TSE:6787

JP¥80.6b

Nissha

TSE:7915

JP¥74.6b

Hosiden

TSE:6804

JP¥68.7b

Price History & Performance

Summary of all time highs, changes and price drops for Nichicon
Historical stock prices
Current Share Price	JP¥1,205.00
52 Week High	JP¥1,445.00
52 Week Low	JP¥987.00
Beta	1.36
1 Month Change	-12.93%
3 Month Change	13.04%
1 Year Change	2.21%
3 Year Change	34.64%
5 Year Change	-0.74%
Change since IPO	-5.12%

Shareholder Returns

	6996	JP Electronic	JP Market
7D	-6.0%	-2.2%	-0.7%
1Y	2.2%	-13.7%	-4.5%

Return vs Industry: 6996 exceeded the JP Electronic industry which returned -13.8% over the past year.

Return vs Market: 6996 exceeded the JP Market which returned -5.7% over the past year.

Price Volatility

Is 6996's price volatile compared to industry and market?
6996 volatility
6996 Average Weekly Movement	5.0%
Electronic Industry Average Movement	4.5%
Market Average Movement	4.1%
10% most volatile stocks in JP Market	8.3%
10% least volatile stocks in JP Market	2.2%

Stable Share Price: 6996 is not significantly more volatile than the rest of JP stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: 6996's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1950	5,209	Ippei Takeda	https://www.nichicon.co.jp

Nichicon Corporation, together with its subsidiaries, develops, produces, and sells capacitors and circuit products for electric and electronic products in Japan, the U.S.A, Asia, and internationally. It offers chip type, miniature type, and large can type aluminum electrolytic capacitors; conductive polymer aluminum solid electrolytic capacitors; and electric double layer capacitors, plastic film capacitors, positive thermistors, function and power modules, and inverter smoothing capacitors. The company also provides household energy storage systems; vehicle-to-home systems; EV/PHVs quick chargers; power storage systems for public and industrial use; small Li-Ion rechargeable batteries; switching power supplies; power sources for medical and academic study accelerators; voltage sag compensators; and power outage compensators.

Nichicon Fundamentals Summary

How do Nichicon's earnings and revenue compare to its market cap?
6996 fundamental statistics
Market Cap	JP¥82.44b
Earnings (TTM)	JP¥7.90b
Revenue (TTM)	JP¥142.20b

10.4x

P/E Ratio

0.6x

P/S Ratio

Is 6996 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
6996 income statement (TTM)
Revenue	JP¥142.20b
Cost of Revenue	JP¥117.79b
Gross Profit	JP¥24.40b
Other Expenses	JP¥16.50b
Earnings	JP¥7.90b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 08, 2022

Earnings per share (EPS)	115.50
Gross Margin	17.16%
Net Profit Margin	5.56%
Debt/Equity Ratio	26.2%

How did 6996 perform over the long term?

See historical performance and comparison

Dividends

2.3%

Current Dividend Yield

23%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 6996 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

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 6996?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 6996. This is calculated by dividing 6996's market cap by their current preferred multiple.
What is 6996's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	JP¥82.44b

6996 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	0.6x
Enterprise Value/EBITDA	7.5x
PEG Ratio	2.8x

Price to Earnings Ratio vs Peers

How does 6996's PE Ratio compare to its peers?

6996 PE Ratio vs Peers

The above table shows the PE ratio for 6996 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	9.4x
6908 Iriso Electronics	19.2x	16.0%	JP¥75.0b
6787 Meiko Electronics	7x	10.7%	JP¥80.6b
7915 Nissha	5.4x	-4.5%	JP¥74.6b
6804 Hosiden	5.8x	-28.7%	JP¥68.7b
6996 Nichicon	10.4x	3.7%	JP¥82.4b

Forward PE

Price-To-Earnings vs Peers: 6996 is expensive based on its Price-To-Earnings Ratio (10.4x) compared to the peer average (9.4x).

Price to Earnings Ratio vs Industry

How does 6996's PE Ratio compare vs other companies in the JP Electronic Industry?

Price-To-Earnings vs Industry: 6996 is good value based on its Price-To-Earnings Ratio (10.4x) compared to the JP Electronic industry average (10.7x)

Price to Earnings Ratio vs Fair Ratio

What is 6996'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.

6996 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	10.4x
Fair PE Ratio	11.8x

Price-To-Earnings vs Fair Ratio: 6996 is good value based on its Price-To-Earnings Ratio (10.4x) compared to the estimated Fair Price-To-Earnings Ratio (11.8x).

Share Price vs Fair Value

What is the Fair Price of 6996 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 6996 (¥1205) is trading below our estimate of fair value (¥3193.47)

Significantly Below Fair Value: 6996 is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: 6996 is poor value based on its PEG Ratio (2.8x)

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Future Growth

How is Nichicon forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

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

3.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 6996's forecast earnings growth (3.7% per year) is above the savings rate (0.04%).

Earnings vs Market: 6996's earnings (3.7% per year) are forecast to grow slower than the JP market (9% per year).

High Growth Earnings: 6996's earnings are forecast to grow, but not significantly.

Revenue vs Market: 6996's revenue (5.8% per year) is forecast to grow faster than the JP market (4.5% per year).

High Growth Revenue: 6996's revenue (5.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 6996's Return on Equity is forecast to be low in 3 years time (8.7%).

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Past Performance

How has Nichicon performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

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

44.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 6996 has high quality earnings.

Growing Profit Margin: 6996's current net profit margins (5.6%) are higher than last year (1.5%).

Past Earnings Growth Analysis

Earnings Trend: 6996 has become profitable over the past 5 years, growing earnings by 44.1% per year.

Accelerating Growth: 6996's earnings growth over the past year (364%) exceeds its 5-year average (44.1% per year).

Earnings vs Industry: 6996 earnings growth over the past year (364%) exceeded the Electronic industry 46%.

Return on Equity

High ROE: 6996's Return on Equity (8.5%) is considered low.

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Financial Health

How is Nichicon's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

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

Financial Position Analysis

Short Term Liabilities: 6996's short term assets (¥95.0B) exceed its short term liabilities (¥53.1B).

Long Term Liabilities: 6996's short term assets (¥95.0B) exceed its long term liabilities (¥22.4B).

Debt to Equity History and Analysis

Debt Level: 6996's net debt to equity ratio (6.9%) is considered satisfactory.

Reducing Debt: 6996's debt to equity ratio has increased from 1.8% to 26.2% over the past 5 years.

Debt Coverage: 6996's debt is well covered by operating cash flow (21.2%).

Interest Coverage: 6996 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Nichicon 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
Cash Flow Coverage

2.32%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 6996's dividend (2.32%) is higher than the bottom 25% of dividend payers in the JP market (1.69%).

High Dividend: 6996's dividend (2.32%) is low compared to the top 25% of dividend payers in the JP market (3.7%).

Stability and Growth of Payments

Stable Dividend: 6996's dividends per share have been stable in the past 10 years.

Growing Dividend: 6996's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (23.4%), 6996's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: 6996 is paying a dividend but the company has no free cash flows.

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Management

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

6.1yrs

Average board tenure

CEO

Ippei Takeda (81 yo)

no data

Tenure

Mr. Ippei Takeda serves as the Chief Executive Officer of Nichicon Corporation. Mr. Takeda served as the President and Chief Executive Officer of Nichicon Corporation. Mr. Takeda serves as the Chairman of...

Board Members

Experienced Board: 6996's board of directors are considered experienced (6.1 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	2022/07/05 00:00
End of Day Share Price	2022/07/05 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31