Chugai Ro Co., Ltd. (1964) AI Stock Analysis

• Market Cap: ¥36.85B
• Dividend Yield: 2.77%
• Average Volume (3M): 26.67K
• Price to Earnings (P/E): 6.2
• Beta (1Y): 1.19
• Revenue Growth: 15.61%
• EPS Growth: 81.99%
• Country: JP
• Employees: 700
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 176.28
• Shares Outstanding: 7,800,000
• 10 Day Avg. Volume: 27,110
• 30 Day Avg. Volume: 26,670
• PEG Ratio: 0.23
• Price to Book (P/B): 0.96
• Price to Sales (P/S): 0.75
• P/FCF Ratio: -6.14
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 386.9
• Revenue Forecast (FY): ¥38.00B

• Rating: 81 Outperform
• Price Target: ¥5,971.00 ▲(31.23% Upside)
• Action: Reiterated Date: 11/01/25
• Date: Action: Reiterated 11/01/25

Chugai Ro Co., Ltd. benefits from strong financial performance and attractive valuation metrics, with technical indicators supporting a positive outlook. However, cash flow management remains a concern that could impact future growth.

Positive Factors

Revenue growth momentum

Sustained revenue growth of 23.75% year-over-year indicates durable demand for the company's products and an expanding market position. Over 2-6 months this trend supports reinvestment capacity, scale advantages, and gives management room to pursue strategic initiatives that compound long-term earnings.

Healthy margins and efficiency

Solid gross and operating margins reflect efficient cost structure and pricing power, enabling the business to generate sustainable operating profits. These margins support long-term resilience through cycles, funding of R&D or capex, and provide a buffer to absorb input cost increases without immediate margin erosion.

Conservative capital structure

Low leverage and a high equity ratio provide financial flexibility and lower solvency risk, permitting the company to fund growth or weather downturns without aggressive refinancing. A mid-teens ROE indicates effective capital use, supporting steady shareholder returns and strategic optionality over time.

Negative Factors

Negative operating cash flow

Material negative operating cash flow shows earnings are not converting into cash, creating a persistent funding gap. Over months this undermines the company's ability to self-fund capex, pay dividends, or reduce leverage, increasing reliance on external financing or working capital adjustments.

Weak free cash flow conversion

A negative FCF-to-net-income ratio implies reported profits are not supported by free cash, raising concerns about earnings quality and sustainability. Structurally, this limits capacity to invest or return capital and may force trade-offs between growth projects and balance sheet repair over ensuing quarters.

Net income growth risk

Although revenue is growing, management commentary notes net income growth requires focus, implying margin pressure or rising costs could compress profits. If not addressed, slower bottom-line expansion will weaken free cash flow and limit long-term reinvestment and shareholder return potential.

Chugai Ro Co., Ltd. Business Overview & Revenue Model

Company Description

Chugai Ro Co., Ltd., established in 1964, is a prominent player in the manufacturing and distribution sectors, specializing in high-quality industrial materials and products. The company operates in various sectors including chemicals, construction materials, and specialized manufacturing, focusing on delivering innovative solutions tailored to meet the diverse needs of its clientele. With a commitment to quality and sustainability, Chugai Ro Co., Ltd. has positioned itself as a trusted partner in both domestic and international markets.

How the Company Makes Money

Chugai Ro Co., Ltd. generates revenue primarily through the sale of its industrial products, which include chemicals and construction materials. The company adopts a multi-faceted revenue model that encompasses direct sales to manufacturers, distributors, and construction firms. Key revenue streams include long-term contracts with large enterprises, which provide a stable income base, and the development of proprietary products that command premium pricing due to their specialized nature. Additionally, strategic partnerships with other companies enhance its market reach and innovation capabilities, contributing to increased sales and profitability. The company's emphasis on research and development ensures a continuous pipeline of new products, further bolstering its revenue potential.

Chugai Ro Co., Ltd. Financial Statement Overview

Summary

Chugai Ro Co., Ltd. demonstrates strong revenue growth and robust profit margins, supported by a solid balance sheet with low leverage. However, negative cash flow positions indicate potential cash management challenges.

Income Statement

Chugai Ro Co., Ltd. has shown a robust revenue growth of 23.75% from 2024 to 2025. The gross profit margin stands at 20.94%, and the net profit margin is 8.27%, indicating strong profitability. The EBIT margin of 7.55% and EBITDA margin of 13.34% suggest effective operational efficiency. The company's consistent revenue growth trajectory and healthy margins underline its strong market position, although the net income growth may need attention to sustain long-term profitability.

Balance Sheet

The company maintains a solid financial structure with a debt-to-equity ratio of 0.19, reflecting prudent financial leverage. The return on equity is 10.58%, showcasing effective utilization of equity capital. A high equity ratio of 58.12% indicates financial stability and a strong capacity to handle liabilities. These metrics suggest a well-managed balance sheet with low risk, although maintaining this low leverage while expanding could be challenging.

Cash Flow

While the operating cash flow is negative at -3,696 million JPY, indicating potential operational cash challenges, the free cash flow has shown notable growth despite being negative. The free cash flow to net income ratio is -1.47, highlighting cash flow generation issues relative to net income. However, the company's investment in capital expenditure may enhance future cash flow, suggesting room for improvement in cash flow management.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	37.31B	36.25B	29.28B	27.98B	26.32B	24.72B
Gross Profit	7.95B	7.59B	6.12B	5.69B	5.56B	4.67B
EBITDA	5.81B	4.83B	3.66B	2.14B	2.05B	936.00M
Net Income	3.71B	3.00B	2.20B	1.23B	1.36B	329.00M
Balance Sheet
Total Assets	46.02B	48.74B	48.86B	41.18B	38.14B	38.58B
Cash, Cash Equivalents and Short-Term Investments	6.07B	4.39B	10.06B	7.88B	11.13B	7.12B
Total Debt	6.40B	5.51B	7.29B	3.99B	3.99B	5.99B
Total Liabilities	18.88B	20.13B	21.09B	17.14B	14.93B	16.79B
Stockholders Equity	26.91B	28.33B	27.57B	23.86B	23.07B	21.68B
Cash Flow
Free Cash Flow	0.00	-4.42B	-2.23B	-2.74B	5.77B	2.86B
Operating Cash Flow	0.00	-3.70B	-891.00M	-2.50B	6.09B	3.30B
Investing Cash Flow	0.00	654.00M	550.00M	-63.00M	510.00M	-551.00M
Financing Cash Flow	0.00	-2.70B	2.45B	-727.00M	-2.51B	-4.48B

Chugai Ro Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 4550.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1964, the sentiment is Neutral. The current price of 4550 is below the 20-day moving average (MA) of 4907.75, below the 50-day MA of 4662.30, and above the 200-day MA of 4173.32, indicating a neutral trend. The MACD of 53.57 indicates Positive momentum. The RSI at 49.20 is Neutral, neither overbought nor oversold. The STOCH value of 22.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:1964.

Chugai Ro Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1964	81 Outperform	¥36.85B	6.16	―	2.77%	15.61%	81.99%
6517	78 Outperform	¥74.21B	9.50	―	2.63%	-6.00%	-13.74%
6247	76 Outperform	¥46.34B	11.21	―	3.32%	18.47%	64.23%
6381	75 Outperform	¥66.46B	13.24	―	3.95%	-1.67%	-4.39%
6376	70 Outperform	¥144.14B	7.70	8.17%	2.04%	1.48%	58.59%
6363	70 Outperform	¥67.60B	4.09	―	3.09%	6.35%	-34.20%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Chugai Ro Co., Ltd. Corporate Events

Chugai Ro Names Mamoru Sakata as New President Ahead of Next Medium-Term Plan

Chugai Ro Co., Ltd. has announced a leadership transition as it prepares its next medium-term management plan, appointing long-time executive Mamoru Sakata as Representative Director, President and Chief Executive Officer effective April 1, 2026, while current President and CEO Akira Ozaki will move to the role of Representative Director and Chairman. The company credits the outgoing president with driving business growth and capital efficiency under the current medium-term plan, and aims to leverage Sakata’s extensive operational and planning experience, particularly in plant, R&D and GX (green transformation) projects, to accelerate sustainable growth and further enhance corporate value under the new leadership structure.

The most recent analyst rating on (JP:1964) stock is a Hold with a Yen5067.00 price target. To see the full list of analyst forecasts on Chugai Ro Co., Ltd. stock, see the JP:1964 Stock Forecast page.

Chugai Ro Posts Strong Profit Surge and Confirms Full-Year Outlook

Chugai Ro Co. reported solid growth for the nine months ended 31 December 2025, with net sales rising 7.0% year on year to ¥23.78 billion and profit attributable to owners of parent surging 132.1% to ¥2.33 billion, driven by improved profitability and a stronger ordinary profit margin. Earnings per share more than doubled to ¥321.59, while the company’s equity-to-asset ratio improved to 61.7%, reflecting a stronger balance sheet despite a slight decline in total assets. Management kept its full-year forecast unchanged, targeting modest sales growth of 3.5% to ¥37.5 billion but a 23.4% jump in full-year profit attributable to owners of parent to ¥3.7 billion, and plans to maintain a stable annual dividend of ¥150 per share, signaling confidence in earnings quality and ongoing shareholder returns.

The most recent analyst rating on (JP:1964) stock is a Hold with a Yen5067.00 price target. To see the full list of analyst forecasts on Chugai Ro Co., Ltd. stock, see the JP:1964 Stock Forecast page.