# Nitto Denko (6988.JP)

Canonical: https://gigainvestors.com/s/6988.JP

Analysis as of: 2026-10-15T07:11:11.088Z. 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 3,605.00 per share; close as of 2026-10-15.

Estimated value: low JPY 2,342.21 per share, central JPY 2,594.45 per share, high JPY 2,930.22 per share. Buy at or below the central value JPY 2,594.45 per share. Valuation as of 2026-10-15T07:11:11.088Z; scenarios are not confidence intervals.

Expected annual return: 7.7% at the stated quote. About 7.7% 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: pass

- 4 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 4

- Years with a net loss: 0

- Operating margin variation: 0.19×

Chart: Operating margin; fiscal year observations.

- FY2018: 0.15×

- FY2019: 0.12×

- FY2020: 0.09×

- FY2021: 0.12×

- FY2022: 0.15×

- FY2023: 0.16×

- FY2024: 0.15×

- FY2025: 0.18×

- FY2026: 0.18×

### moat: pass

- ROIC, median of available years: 18.3%

- ROIC, second-lowest year: 17.0%

- Years with nonpositive capital: 0

- Capital spending / revenue: 7.4%

- ROIC including acquisitions, ten-year median: 14.4%

- Typical minus recent gross margin: -6.4 pp

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2018: 22.6%

- FY2019: 17.0%

- FY2020: 12.6%

- FY2021: 17.2%

- FY2022: 21.4%

- FY2023: 21.3%

- FY2024: 17.9%

- FY2025: 22.0%

- FY2026: 18.3%

### economics: pass

- Owner earnings / net income, 5-yr: 0.89×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: JPY 518B

- Net income, five-year total: JPY 580B

- Working capital / revenue, annual change: 0.5 pp

- Working capital / revenue, final three-year average: 18.5%

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

- FY2022: 0.95×

- FY2023: 0.95×

- FY2024: 0.86×

- FY2025: 0.93×

- FY2026: 0.80×

### management: fail

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

- buybacks leaned toward cheaper years (informational)

- Per-share earnings: 495.23 to 195.74 (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: 15.2%

- Ordinary dilution, 5-year annual growth: -1.8%

- Market cap gain: JPY 1.79T

- Cumulative retained earnings: JPY 309B

- Diluted shares, 10-year annual growth: 15.2%

- Diluted shares, 5-year annual growth: -1.8%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: -11.0%

- Per-share value change: JPY -299.49

- Per-share value, starting three-year median: JPY 495.23

- Per-share value, ending three-year median: JPY 195.74

- Buybacks concentrated in cheaper years (correlation): 0.60

- Average buyback yield: 5.6%

- Buyback history: 8 years

- Debt-funded buybacks: No

- Cumulative net income, 10 years: JPY 915B

- ROIC, last three-year median: 18.3%

Chart: Earnings per share; fiscal year observations.

- FY2017: JPY 390.94

- FY2018: JPY 538.99

- FY2019: JPY 423.50

- FY2020: JPY 301.32

- FY2021: JPY 94.54

- FY2022: JPY 131.26

- FY2023: JPY 147.75

- FY2024: JPY 143.91

- FY2025: JPY 195.74

- FY2026: JPY 197.20

### accounting: pass

- Sloan accruals: -4.1%

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.44×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.07×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -6.4%

- FY2018: -3.8%

- FY2019: -3.5%

- FY2020: -8.3%

- FY2021: -4.8%

- FY2022: -4.3%

- FY2023: -6.3%

- FY2024: -4.2%

- FY2025: -6.1%

- FY2026: -4.1%

## Holders

## Price story

Price needs cash profits to grow 5.9% a year for ten years · sales +1.4%

Story as of 2026-10-16T10:00:14.562Z; price observation 2026-10-15.

Price needs cash profits to grow 5.9% a year for ten years

### Sales · FY2025–2026

sales +1.4%; source https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YCAR.pdf; observed 2026-06-17.

- FY2017: JPY 768B 

- FY2018: JPY 857B 

- FY2019: JPY 806B 

- FY2020: JPY 741B 

- FY2021: JPY 761B 

- FY2022: JPY 853B 

- FY2023: JPY 929B 

- FY2024: JPY 915B 

- FY2025: JPY 1.01T 

- FY2026: JPY 1.03T 

### Gross margin · FY2026

gross margin 38%; source https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YCAR.pdf; observed 2026-06-17.

- FY2018: 32.9% 

- FY2019: 30.0% 

- FY2020: 29.9% 

- FY2021: 32.0% 

- FY2022: 35.4% 

- FY2023: 36.3% 

- FY2024: 36.2% 

- FY2025: 39.0% 

- FY2026: 38.0% 

## Owner memo

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

### How it makes money

Annual sales are JPY 1 trillion.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YCAR.pdf (filed 2026-06-17); FY2026: revenue 1028171000000; grossProfit 390763000000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 36.2% to 39% during 2024–26; it earns 18.3% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-17); FY2024: grossProfit / revenue = 36.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-17); FY2025: grossProfit / revenue = 39%.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YCAR.pdf (filed 2026-06-17); FY2026: grossProfit / revenue = 38%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-17); 10-year return on capital observations [[2018,0.22597057605634963],[2019,0.16965098091894087],[2020,0.1256515654096101],[2021,0.17199053938584588],[2022,0.21371101550411983],[2023,0.21318445012571213],[2024,0.17867836819428318],[2025,0.22043664791004508],[2026,0.18306313374083827]]; median 0.18306313374083827. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Spends 5.3% of cash earnings on expansion; paid dividends in 9 of 9 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-17); FY2018: growth capex 0; upkeep 48466000000; owner earnings 88194000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-17); FY2019: growth capex 0; upkeep 59628000000; owner earnings 52836000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-17); FY2020: growth capex 0; upkeep 59797000000; owner earnings 32014000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-17); FY2021: growth capex 6785910725.833878; upkeep 50938089274.16612; owner earnings 62047910725.83388. Growth capex / owner earnings = 0.10936566028497295.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-17); FY2022: growth capex 8747000000; upkeep 50211000000; cash acquisitions 269000000; owner earnings 91904000000. Growth capex plus acquisitions / owner earnings = 0.09810236768802229.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-17); FY2023: growth capex 8559000000; upkeep 57362000000; cash acquisitions 96966000000; owner earnings 103606000000. Growth capex plus acquisitions / owner earnings = 1.018522093315059.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-17); FY2024: growth capex 0; upkeep 67774000000; cash acquisitions 0; owner earnings 88085000000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-17); FY2025: growth capex 37047676725.73279; upkeep 68955323274.26721; cash acquisitions 6256000000; owner earnings 128054676725.73279. Growth capex plus acquisitions / owner earnings = 0.3381655229857829.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YCAR.pdf (filed 2026-06-17); FY2026: growth capex 5644282262.819748; upkeep 90962717737.18025; owner earnings 106586282262.81975. Growth capex / owner earnings = 0.05295505334262541.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-17); Dividend observations: [[2018,25166000000],[2019,26928000000],[2020,29820000000],[2021,30188000000],[2022,31076000000],[2023,34046000000],[2024,36041000000],[2025,38040000000],[2026,39667000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YCAR.pdf (filed 2026-06-17); FY2026: cash repurchases 60287000000 JPY.

### What the price says

The price assumes cash profits grow 5.9% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-17); Ten-year compound average after fade. Initial solved rate 0.07095520057456045. Price 3605; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03.  Closing-price date 2026-10-15.

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

- 2016-11: JPY 1,579.20 per share

- 2016-12: JPY 1,793.80 per share

- 2017-01: JPY 1,788.60 per share

- 2017-02: JPY 1,892.00 per share

- 2017-03: JPY 1,720.40 per share

- 2017-04: JPY 1,677.80 per share

- 2017-05: JPY 1,778.20 per share

- 2017-06: JPY 1,848.00 per share

- 2017-07: JPY 1,971.60 per share

- 2017-08: JPY 1,939.60 per share

- 2017-09: JPY 1,876.40 per share

- 2017-10: JPY 2,101.00 per share

- 2017-11: JPY 2,206.00 per share

- 2017-12: JPY 2,002.00 per share

- 2018-01: JPY 1,994.80 per share

- 2018-02: JPY 1,780.60 per share

- 2018-03: JPY 1,595.60 per share

- 2018-04: JPY 1,630.00 per share

- 2018-05: JPY 1,711.80 per share

- 2018-06: JPY 1,676.60 per share

- 2018-07: JPY 1,616.40 per share

- 2018-08: JPY 1,725.60 per share

- 2018-09: JPY 1,703.20 per share

- 2018-10: JPY 1,415.60 per share

- 2018-11: JPY 1,240.60 per share

- 2018-12: JPY 1,108.60 per share

- 2019-01: JPY 1,228.00 per share

- 2019-02: JPY 1,188.40 per share

- 2019-03: JPY 1,163.00 per share

- 2019-04: JPY 1,198.00 per share

- 2019-05: JPY 950.00 per share

- 2019-06: JPY 1,063.40 per share

- 2019-07: JPY 1,078.00 per share

- 2019-08: JPY 989.20 per share

- 2019-09: JPY 1,040.80 per share

- 2019-10: JPY 1,208.00 per share

- 2019-11: JPY 1,228.00 per share

- 2019-12: JPY 1,236.00 per share

- 2020-01: JPY 1,238.00 per share

- 2020-02: JPY 1,084.00 per share

- 2020-03: JPY 965.00 per share

- 2020-04: JPY 1,082.00 per share

- 2020-05: JPY 1,166.00 per share

- 2020-06: JPY 1,220.00 per share

- 2020-07: JPY 1,190.00 per share

- 2020-08: JPY 1,288.00 per share

- 2020-09: JPY 1,368.00 per share

- 2020-10: JPY 1,462.00 per share

- 2020-11: JPY 1,728.00 per share

- 2020-12: JPY 1,846.00 per share

- 2021-01: JPY 1,894.00 per share

- 2021-02: JPY 1,818.00 per share

- 2021-03: JPY 1,892.00 per share

- 2021-04: JPY 1,812.00 per share

- 2021-05: JPY 1,698.00 per share

- 2021-06: JPY 1,658.00 per share

- 2021-07: JPY 1,620.00 per share

- 2021-08: JPY 1,672.00 per share

- 2021-09: JPY 1,596.00 per share

- 2021-10: JPY 1,776.00 per share

- 2021-11: JPY 1,580.00 per share

- 2021-12: JPY 1,778.00 per share

- 2022-01: JPY 1,770.00 per share

- 2022-02: JPY 1,670.00 per share

- 2022-03: JPY 1,764.00 per share

- 2022-04: JPY 1,750.00 per share

- 2022-05: JPY 1,870.00 per share

- 2022-06: JPY 1,756.00 per share

- 2022-07: JPY 1,706.00 per share

- 2022-08: JPY 1,724.00 per share

- 2022-09: JPY 1,566.00 per share

- 2022-10: JPY 1,566.00 per share

- 2022-11: JPY 1,722.00 per share

- 2022-12: JPY 1,530.00 per share

- 2023-01: JPY 1,672.00 per share

- 2023-02: JPY 1,640.00 per share

- 2023-03: JPY 1,710.00 per share

- 2023-04: JPY 1,752.00 per share

- 2023-05: JPY 1,986.00 per share

- 2023-06: JPY 2,126.00 per share

- 2023-07: JPY 2,020.00 per share

- 2023-08: JPY 1,989.80 per share

- 2023-09: JPY 1,961.60 per share

- 2023-10: JPY 1,936.60 per share

- 2023-11: JPY 2,103.00 per share

- 2023-12: JPY 2,110.00 per share

- 2024-01: JPY 2,462.00 per share

- 2024-02: JPY 2,750.00 per share

- 2024-03: JPY 2,770.00 per share

- 2024-04: JPY 2,614.00 per share

- 2024-05: JPY 2,399.00 per share

- 2024-06: JPY 2,542.00 per share

- 2024-07: JPY 2,628.00 per share

- 2024-08: JPY 2,423.00 per share

- 2024-09: JPY 2,388.50 per share

- 2024-10: JPY 2,558.50 per share

- 2024-11: JPY 2,388.00 per share

- 2024-12: JPY 2,680.00 per share

- 2025-01: JPY 2,768.00 per share

- 2025-02: JPY 2,928.00 per share

- 2025-03: JPY 2,735.00 per share

- 2025-04: JPY 2,500.50 per share

- 2025-05: JPY 2,645.50 per share

- 2025-06: JPY 2,791.50 per share

- 2025-07: JPY 3,141.00 per share

- 2025-08: JPY 3,366.00 per share

- 2025-09: JPY 3,517.00 per share

- 2025-10: JPY 3,854.00 per share

- 2025-11: JPY 3,861.00 per share

- 2025-12: JPY 3,715.00 per share

- 2026-01: JPY 3,426.00 per share

- 2026-02: JPY 3,637.00 per share

- 2026-03: JPY 3,064.00 per share

- 2026-04: JPY 2,997.50 per share

- 2026-05: JPY 2,990.50 per share

- 2026-06: JPY 3,170.00 per share

- 2026-07: JPY 3,325.00 per share

- 2026-08: JPY 3,512.00 per share

- 2026-09: JPY 3,475.00 per share

- 2026-10: JPY 3,658.00 per share

## Annual estimated value (JPY per share)

- FY2022: low JPY 1,493.58 per share, central JPY 1,635.23 per share, high JPY 1,823.81 per share

- FY2023: low JPY 1,541.46 per share, central JPY 1,695.89 per share, high JPY 1,901.46 per share

- FY2024: low JPY 1,803.46 per share, central JPY 1,989.51 per share, high JPY 2,237.19 per share

- FY2025: low JPY 2,191.40 per share, central JPY 2,426.08 per share, high JPY 2,738.49 per share

- FY2026: low JPY 2,288.78 per share, central JPY 2,535.26 per share, high JPY 2,863.37 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

Prior published observations retained from 2026-10-15T07:11:11.088Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original EDINET filing](https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YCAR.pdf); period 2026-03-31, filed 2026-06-17.

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.