Namura Shipbuilding Co., Ltd. engages in shipbuilding business worldwide. The company builds crude oil carriers, tankers, product carriers, bulk carriers, ore carriers, LPG carriers, etc., as well as provides ship repair services. It is also involved in the design, production, and installation of bridges and steel structures. Namura Shipbuilding Co., Ltd. was founded in 1911 and is headquartered in Osaka, Japan.

Japan

Namura Shipbuilding Co., Ltd.

Industrials

The company pays dividends on rare occasions. There have only been a few years with dividend payments in the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has been low and below its peers. 

7014.T reported revenue of JPY 159 227mn in the last 12 months, up 0% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 15% from FY24 to JPY 376.58.

The stock has been growing steadily in the past six months, adding 81% in total. The stock has outperformed its global peers from the same sector and industry (as shown above), surpassing them by 51ppts in total. At the same time, the stock's performance relative to its the peers from the same country and sector is different. The stock outperformed these peers by 75ppts over the past six months and grew 43ppts faster in the past month. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

The company has reported average EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 21.3% in the last 12 months, a decline from 22.0% in FY24. 

Historically, 7014.T has reported strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 16.5%, down from 19.5% in FY24. 

Another important profitability metric, return on assets (RoA), amounted to 12.9% in the last 12 months, a decrease from 17.4% in FY24. 

In the last 12 months, the return on capital employed (RoCE) declined to 20.7%, above the peers. 

Namura Shipbuilding Co., Ltd. reported a return on equity (RoE) of 25.4% in the last 12 months, down from 36.7% in FY24. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 5.3 in the past several years. This ratio implies a excellent shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

7014.T boasts high trading liquidity. The average private investor can sell his common position in the stock immediately. Liquidity is usually stable and remains favourable on the days with the lowest activity. However, please consider that under highly turbulent market conditions, the trading volume tends to decrease significantly. 

No other major risks have been identified.

The risk of default is minimal. We note solid return on capital, strong debt servicing capacity, adequate interest coverage, solid cash flow generation, and an favourable capital structure, among the positive credit factors. Among the negative credit factors and we point to weak positions in its industry, poor working capital management.

In highly turbulent market conditions, 7014.T is moderately volatile. In other words, the stock will fall more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be moderate. 

In normal market circumstances, 7014.T is highly volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change somewhat erratically. The stock's losses on its worst days (less than 1-5% of the time) will range from significant to immense. We would also like to highlight the immense intraday volatility of the instrument. 

From both historical and forecast perspectives, the stock is underpriced compared to similar stocks. Specifically, the stock is 'cheap' on P/E, undervalued on EV/EBITD. 

Namura Shipbuilding Co., Ltd.

¥ 3125

5

Namura Shipbuilding Co., Ltd.

¥ 3125

5

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

¥ 3125

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