5471.T Stock Today, February 25: Rare-Earth Magnet Hype vs Profit Slide
Daido Steel stock is in focus after shares of 5471.T surged to an 18-year high on optimism around rare earth magnets that avoid heavy rare-earths. The latest price is ¥2,220, up 37.5% year to date, with a 1-year gain of 85.5%. The move reflects a perceived hedge against China export controls. Still, guidance for FY Mar-2026 points to flat revenue and an 8.6% operating profit decline amid softer Japan auto demand. The next earnings date is 24 April 2026, keeping catalysts near.
Rare-earth magnet story and China risk premium
Speculation centers on heavy rare-earth–free magnets, which could reduce supply risk as China export controls tighten. That narrative lifted sentiment and pushed Daido Steel stock to multi-year highs, as investors price strategic value in motor and EV applications. Local coverage highlights the rare earth angle as a major driver of the rally source. The key question is commercialization speed and margin impact through FY Mar-2026.
The stock’s 18-year high and strong year-to-date gains imply a premium for future magnet wins and supply-chain diversification. Investors appear to discount improved bargaining power in high-performance materials, with optionality in EV and industrial motors. Domestic media note the sharp run and rising expectations tied to rare earth magnets source. For Daido Steel stock, execution and customer adoption timelines now matter most.
FY Mar-2026 outlook: flat sales, profit dip
Management guides flat revenue and an 8.6% drop in operating profit for FY Mar-2026, reflecting cost pressure and product mix. Consolidation of Nihon Koshuha Steel is not yet included, so upside from integration is still ahead. Softer Japan auto demand limits near-term volume leverage, while higher-value magnet wins could take time to show. Daido Steel stock needs tangible orders to validate the story.
Japan auto demand has recovered unevenly, with OEM production normalizing but not booming. Tool steel and specialty steel shipments track model cycles and powertrain mix. EV and hybrid motors should support magnet demand, but the FY window looks tight. A weaker yen can aid exports, yet cost inputs offset part of the benefit. For Daido Steel stock, delivery schedules and order visibility will drive revisions.
Valuation, balance sheet, and dividends
At ¥2,220, the stock trades at a PE of 15.74 and a price-to-book of 0.99, with EV/EBITDA near 8.23. ROE is 6.16% and operating margin is 6.46%. The dividend yield is about 2.16% with a 10.3% payout ratio. These marks look reasonable against strategic optionality, but earnings softness tempers upgrades. Daido Steel stock must convert pipeline to profits.
Liquidity is sound with a current ratio of 2.36 and interest coverage of 33.8x. Net debt to EBITDA is 1.79, showing manageable leverage. Operating cash flow per share is ¥50.51, while free cash flow was slightly negative on capex. Capex-to-revenue sits near 1.77%. The balance sheet supports selective growth bets, helping Daido Steel stock bridge from promise to performance.
Technical setup and trading levels
Momentum remains strong: RSI 65.44, ADX 45.62, and positive MACD. MFI at 75.09 signals active buying, while Williams %R near -2.4 suggests near-term overbought. The Awesome Oscillator and ROC confirm upside bias. For Daido Steel stock, momentum favors buy-the-dip tactics, but traders should expect swings given an ATR of 81. Seasoned investors can wait for constructive pullbacks.
Price is ¥2,220. Resistance sits near the Bollinger upper band at ¥2,248.73 and the prior 52-week high at ¥2,276. First support is the middle band at ¥2,073.07, then the 50-day average at ¥1,864.86. The 200-day at ¥1,377.54 is far below. With a strong trend, respecting stops near one ATR protects gains while letting winners run.
Final Thoughts
We see a clear split between story and numbers. Rare earth magnets tied to China export controls add strategic appeal, and that lifted Daido Steel stock. Yet FY Mar-2026 guides to flat revenue and an 8.6% operating profit decline, with Japan auto demand still mixed. Valuation is fair if growth appears, supported by solid liquidity and manageable leverage. Our take: long-term investors can build positions on dips toward ¥2,070 to ¥1,865 if order wins and margins firm. Traders can ride momentum, using ATR-based risk controls and watching ¥2,249 to ¥2,276 as breakout levels. Next catalyst is 24 April 2026 earnings, where pipeline, pricing, and any consolidation updates will matter most.
FAQs
Why did Daido Steel stock rally this year?
The rally reflects optimism about heavy rare-earth–free magnets amid tighter China export controls and supply-chain diversification. Investors are also pricing optionality in EV and industrial motors. Momentum and technical breakouts helped push shares to an 18-year high. The bull case now needs confirmed orders and margin signs to sustain the move.
How do China export controls affect Daido Steel?
Tighter export controls raise perceived risk for rare-earth supply, lifting the strategic value of alternatives. If Daido Steel can scale magnets that use less heavy rare-earths, it could win share and pricing power. The opportunity is material, but timing and production economics will decide how fast it benefits earnings.
Is Daido Steel’s valuation stretched after the spike?
At ¥2,220, the stock trades around 15.74 times earnings and 0.99 times book, with a 2.16% dividend yield. Those levels are not extreme if magnet growth materializes. Without faster profit growth, multiples could cap near-term upside. Clear order intake and improved margins would support re-rating from here.
What levels should traders and investors watch now?
Near-term resistance is around ¥2,249 to ¥2,276, with support near ¥2,073 and then ¥1,865. RSI at 65 and ADX at 46 show a strong trend with moderate overbought risk. Using ATR near ¥81 for stops can help manage pullbacks while staying engaged if the uptrend continues.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.