# Mitsubishi Materials (5711.JP)

Canonical: https://gigainvestors.com/s/5711.JP

Analysis as of: 2026-10-15T07:10:41.048Z. Financial observations: FY2013–FY2026.

Listing currency: JPY. Reporting currency: JPY.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: JPY 4,545.00 per share; close as of 2026-10-15.

Estimated value: low JPY 3,338.12 per share, central JPY 3,707.48 per share, high JPY 4,199.18 per share. Buy at or below the central value JPY 3,707.48 per share. Valuation as of 2026-10-15T07:10:41.048Z; scenarios are not confidence intervals.

Expected annual return: 8.5% at the stated quote. About 8.5% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; JP 10-year bond 2.9% + 4 points).

## Checklist

### understandable: fail

- 6 revenue declines in the last 10 years

- more than 5 revenue declines in ten years

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 6

- Years with a net loss: 1

- Operating margin variation: 0.36×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.05×

- FY2018: 0.05×

- FY2019: 0.02×

- FY2020: 0.03×

- FY2021: 0.02×

- FY2022: 0.03×

- FY2023: 0.03×

- FY2024: 0.02×

- FY2025: 0.02×

- FY2026: 0.03×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 3.5%

- ROIC, second-lowest year: 1.9%

- Typical minus recent gross margin: 1.9 pp

- Typical gross margin (annual median): 11.6%

- Recent gross margin (lower of latest and 3-year median): 9.6%

- Years with nonpositive capital: 0

- Capital spending / revenue: 5.0%

- ROIC including acquisitions, ten-year median: 1.1%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 4.0%

- FY2018: 4.4%

- FY2019: 2.4%

- FY2020: 3.4%

- FY2021: 1.9%

- FY2022: 3.6%

- FY2023: 5.1%

- FY2024: 1.7%

- FY2025: 2.6%

- FY2026: 3.7%

### economics: fail

- owner earnings cash conversion below threshold

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 0.57×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: JPY 97B

- Net income, five-year total: JPY 170B

- Return on incremental invested capital: -2.1%

- Working capital / revenue, annual change: 0.7 pp

- Working capital / revenue, change between three-year averages: 6.0 pp

- Working capital / revenue, final three-year average: 34.4%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 1.00×

- FY2023: -0.59×

- FY2024: -0.22×

- FY2025: 1.00×

- FY2026: 0.90×

### management: fail

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 4.0% vs 2.6%

- Per-share earnings: 264.15 to 260.82 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -0.0%

- Ordinary dilution, 5-year annual growth: -0.0%

- Market cap gain: JPY 188B

- Cumulative retained earnings: JPY 73B

- Diluted shares, 10-year annual growth: -0.0%

- Diluted shares, 5-year annual growth: -0.0%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: -0.2%

- Per-share value change: JPY -3.33

- Per-share value, starting three-year median: JPY 264.15

- Per-share value, ending three-year median: JPY 260.82

- Buybacks concentrated in cheaper years (correlation): 0.07

- Average buyback yield: 0.0%

- Buyback history: 10 years

- Debt-funded buybacks: No

- Acquisition spending: JPY 31B

- Cumulative net income, 10 years: JPY 186B

- ROIC, first three-year median: 4.0%

- ROIC, last three-year median: 2.6%

Chart: Earnings per share; fiscal year observations.

- FY2017: JPY 216.44

- FY2018: JPY 264.15

- FY2019: JPY 9.92

- FY2020: JPY -556.34

- FY2021: JPY 186.71

- FY2022: JPY 344.56

- FY2023: JPY 155.60

- FY2024: JPY 228.07

- FY2025: JPY 260.82

- FY2026: JPY 310.56

### accounting: pass

- Sloan accruals: 0.0%

- Receivables to sales index (DSRI): 1.23×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 0.98×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.06×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -4.6%

- FY2018: -0.8%

- FY2019: -7.2%

- FY2020: -7.4%

- FY2021: -2.7%

- FY2022: 1.8%

- FY2023: -1.3%

- FY2024: -1.0%

- FY2025: -1.0%

- FY2026: 0.0%

## Holders

## Price story

Down 24% since Feb 2026 · sales -6%

Story as of 2026-10-16T10:00:14.377Z; price observation 2026-10-15.

Price needs cash profits to grow 3.9% a year for ten years

### Sales · FY2025–2026

sales -6%; source https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YFRY.pdf; observed 2026-06-22.

- FY2017: JPY 1.30T 

- FY2018: JPY 1.60T 

- FY2019: JPY 1.66T 

- FY2020: JPY 1.52T 

- FY2021: JPY 1.49T 

- FY2022: JPY 1.81T 

- FY2023: JPY 1.63T 

- FY2024: JPY 1.54T 

- FY2025: JPY 1.96T 

- FY2026: JPY 1.84T 

### Gross margin · FY2026

gross margin 10.8%; source https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YFRY.pdf; observed 2026-06-22.

- FY2017: 15.3% 

- FY2018: 13.7% 

- FY2019: 11.6% 

- FY2020: 12.6% 

- FY2021: 11.6% 

- FY2022: 11.5% 

- FY2023: 10.9% 

- FY2024: 9.6% 

- FY2025: 8.5% 

- FY2026: 10.8% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Annual sales are JPY 1.8 trillion.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YFRY.pdf (filed 2026-06-22); FY2026: revenue 1844053000000; grossProfit 198969000000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 8.5% to 10.8% during 2024–26; it earns 3.5% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2024: grossProfit / revenue = 9.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2025: grossProfit / revenue = 8.5%.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YFRY.pdf (filed 2026-06-22); FY2026: grossProfit / revenue = 10.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); 10-year return on capital observations [[2017,0.04026136698133937],[2018,0.04449039877332466],[2019,0.02447644567395999],[2020,0.033902266929603964],[2021,0.019056937216983493],[2022,0.03601878820657984],[2023,0.05133178068261961],[2024,0.01692448251077581],[2025,0.025954372714046155],[2026,0.03695178176066439]]; median 0.0349605275680919. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 12% gross margin through 2022 cost inflation.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YFRY.pdf (filed 2026-06-22); Gross margin observations: [[2021,0.11605047669516491],[2022,0.11524766815012372],[2023,0.10871973199387674]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back JPY 22 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2017: growth capex 0; upkeep 78121000000; owner earnings 11317527338.14972. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2018: growth capex 15900000000; upkeep 57025000000; owner earnings 34595000000. Growth capex / owner earnings = 0.4596039890157537.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2019: growth capex 28564129897.0885; upkeep 61916870102.9115; owner earnings 966439995.5851793. Growth capex / owner earnings = 29.55603040806783.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2021: growth capex 0; upkeep 78727000000; owner earnings 11111897975.76112. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2022: growth capex 14626000000; upkeep 63536000000; owner earnings 45015000000. Growth capex / owner earnings = 0.3249139175830279.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2025: growth capex 14786000000; upkeep 45503000000; owner earnings 34076000000. Growth capex / owner earnings = 0.4339124310365066.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YFRY.pdf (filed 2026-06-22); FY2026: growth capex 0; upkeep 51645000000; owner earnings 36430000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); Dividend observations: [[2017,9170000000],[2018,9168000000],[2019,11786000000],[2020,10476000000],[2021,5237000000],[2022,11783000000],[2023,9818000000],[2024,9421000000],[2025,12692000000],[2026,13084000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YFRY.pdf (filed 2026-06-22); FY2026: cash repurchases 22000000 JPY.

### What the price says

The price assumes cash profits grow 3.9% yearly over ten years; actual decline was 2.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); Ten-year compound average after fade. Initial solved rate 0.0433813525616481. Price 4545; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 343.48950115493955 → FY2026 278.7930509351667. Closing-price date 2026-10-15.

## Monthly share-price history (JPY per share)

- 2016-11: JPY 3,385.00 per share

- 2016-12: JPY 3,590.00 per share

- 2017-01: JPY 3,855.00 per share

- 2017-02: JPY 3,730.00 per share

- 2017-03: JPY 3,370.00 per share

- 2017-04: JPY 3,315.00 per share

- 2017-05: JPY 3,125.00 per share

- 2017-06: JPY 3,400.00 per share

- 2017-07: JPY 3,710.00 per share

- 2017-08: JPY 3,945.00 per share

- 2017-09: JPY 3,890.00 per share

- 2017-10: JPY 4,290.00 per share

- 2017-11: JPY 3,750.00 per share

- 2017-12: JPY 4,010.00 per share

- 2018-01: JPY 4,045.00 per share

- 2018-02: JPY 3,370.00 per share

- 2018-03: JPY 3,200.00 per share

- 2018-04: JPY 3,340.00 per share

- 2018-05: JPY 3,025.00 per share

- 2018-06: JPY 3,045.00 per share

- 2018-07: JPY 3,170.00 per share

- 2018-08: JPY 3,005.00 per share

- 2018-09: JPY 3,395.00 per share

- 2018-10: JPY 3,130.00 per share

- 2018-11: JPY 3,185.00 per share

- 2018-12: JPY 2,895.00 per share

- 2019-01: JPY 3,110.00 per share

- 2019-02: JPY 3,060.00 per share

- 2019-03: JPY 2,922.00 per share

- 2019-04: JPY 2,884.00 per share

- 2019-05: JPY 2,833.00 per share

- 2019-06: JPY 3,065.00 per share

- 2019-07: JPY 3,005.00 per share

- 2019-08: JPY 2,575.00 per share

- 2019-09: JPY 2,915.00 per share

- 2019-10: JPY 3,130.00 per share

- 2019-11: JPY 2,924.00 per share

- 2019-12: JPY 2,977.00 per share

- 2020-01: JPY 2,783.00 per share

- 2020-02: JPY 2,466.00 per share

- 2020-03: JPY 2,215.00 per share

- 2020-04: JPY 2,216.00 per share

- 2020-05: JPY 2,453.00 per share

- 2020-06: JPY 2,275.00 per share

- 2020-07: JPY 2,147.00 per share

- 2020-08: JPY 2,228.00 per share

- 2020-09: JPY 2,070.00 per share

- 2020-10: JPY 1,909.00 per share

- 2020-11: JPY 1,982.00 per share

- 2020-12: JPY 2,170.00 per share

- 2021-01: JPY 2,218.00 per share

- 2021-02: JPY 2,503.00 per share

- 2021-03: JPY 2,584.00 per share

- 2021-04: JPY 2,453.00 per share

- 2021-05: JPY 2,320.00 per share

- 2021-06: JPY 2,215.00 per share

- 2021-07: JPY 2,274.00 per share

- 2021-08: JPY 2,256.00 per share

- 2021-09: JPY 2,192.00 per share

- 2021-10: JPY 2,206.00 per share

- 2021-11: JPY 1,954.00 per share

- 2021-12: JPY 1,975.00 per share

- 2022-01: JPY 2,033.00 per share

- 2022-02: JPY 2,073.00 per share

- 2022-03: JPY 2,143.00 per share

- 2022-04: JPY 2,033.00 per share

- 2022-05: JPY 1,980.00 per share

- 2022-06: JPY 1,942.00 per share

- 2022-07: JPY 2,010.00 per share

- 2022-08: JPY 2,081.00 per share

- 2022-09: JPY 1,989.00 per share

- 2022-10: JPY 1,946.00 per share

- 2022-11: JPY 2,187.00 per share

- 2022-12: JPY 2,084.00 per share

- 2023-01: JPY 2,226.00 per share

- 2023-02: JPY 2,120.00 per share

- 2023-03: JPY 2,157.00 per share

- 2023-04: JPY 2,220.00 per share

- 2023-05: JPY 2,325.00 per share

- 2023-06: JPY 2,583.50 per share

- 2023-07: JPY 2,541.00 per share

- 2023-08: JPY 2,446.50 per share

- 2023-09: JPY 2,419.00 per share

- 2023-10: JPY 2,407.00 per share

- 2023-11: JPY 2,434.00 per share

- 2023-12: JPY 2,447.50 per share

- 2024-01: JPY 2,715.00 per share

- 2024-02: JPY 2,618.50 per share

- 2024-03: JPY 2,912.00 per share

- 2024-04: JPY 3,093.00 per share

- 2024-05: JPY 3,063.00 per share

- 2024-06: JPY 2,951.00 per share

- 2024-07: JPY 2,817.00 per share

- 2024-08: JPY 2,576.50 per share

- 2024-09: JPY 2,575.00 per share

- 2024-10: JPY 2,533.50 per share

- 2024-11: JPY 2,395.00 per share

- 2024-12: JPY 2,405.50 per share

- 2025-01: JPY 2,448.50 per share

- 2025-02: JPY 2,380.50 per share

- 2025-03: JPY 2,443.50 per share

- 2025-04: JPY 2,243.50 per share

- 2025-05: JPY 2,255.50 per share

- 2025-06: JPY 2,280.50 per share

- 2025-07: JPY 2,322.50 per share

- 2025-08: JPY 2,552.00 per share

- 2025-09: JPY 2,778.00 per share

- 2025-10: JPY 2,970.00 per share

- 2025-11: JPY 3,131.00 per share

- 2025-12: JPY 3,670.00 per share

- 2026-01: JPY 4,448.00 per share

- 2026-02: JPY 6,006.00 per share

- 2026-03: JPY 4,815.00 per share

- 2026-04: JPY 5,092.00 per share

- 2026-05: JPY 5,153.00 per share

- 2026-06: JPY 4,315.00 per share

- 2026-07: JPY 4,193.00 per share

- 2026-08: JPY 5,660.00 per share

- 2026-09: JPY 5,120.00 per share

- 2026-10: JPY 4,865.00 per share

## Annual estimated value (JPY per share)

- FY2025: low JPY 1,720.64 per share, central JPY 2,020.72 per share, high JPY 2,289.69 per share

- FY2026: low JPY 3,338.12 per share, central JPY 3,707.48 per share, high JPY 4,199.18 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original EDINET filing](https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YFRY.pdf); period 2026-03-31, filed 2026-06-22.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.

## Reported holder observations