Asahi Kasei (3407) AI Stock Analysis

• Market Cap: ¥2.04T
• Dividend Yield: 2.89%
• Average Volume (3M): 5.14M
• Price to Earnings (P/E): 14.5
• Beta (1Y): 0.76
• Revenue Growth: 3.55%
• EPS Growth: 95.65%
• Country: JP
• Employees: 49,295
• Sector: Industrials
• Sector Strength: 72
• Industry: Chemicals
• EPS (TTM): 34.27
• Shares Outstanding: 1,365,752,000
• 10 Day Avg. Volume: 5,313,380
• 30 Day Avg. Volume: 5,138,806
• PEG Ratio: 0.05
• Price to Book (P/B): 0.78
• Price to Sales (P/S): 0.48
• P/FCF Ratio: 14.46
• 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: ¥1,710.00
• Price Target Upside: 41.73% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: ¥1,642.00 ▲(36.10% Upside)

Asahi Kasei's stock score is driven by its stable financial performance and strong technical indicators. The company's balanced capital structure and improving cash flow position are positive, but challenges in revenue growth and net profit conversion remain. The stock's bullish momentum and reasonable valuation further support its attractiveness.

Positive Factors

Diversified business mix

Asahi Kasei's exposure across Materials, Homes and Health Care provides durable revenue diversification, reducing dependence on any single cycle. Structural end-markets (housing demand, healthcare products, industrial materials) support steadier cash flows and cross-segment resilience over 2–6 months.

Healthy gross profit margin

A sustained gross margin above 30% indicates effective cost management and favorable product mix toward higher-value specialty materials. That margin buffer supports profitability through input cost swings and helps preserve operating margin sustainability across near-term cycles.

Improving free cash flow

Material FCF growth suggests improving cash generation, enabling reinvestment, dividend support or debt reduction. Strong free cash flow momentum increases financial flexibility for capex in materials or healthcare R&D and cushions the group against short-term revenue volatility.

Negative Factors

Declining revenue

A substantial TTM revenue decline signals weakening demand or lost volume in key segments, undermining the sustainability of margins and operating leverage. Persistent top-line contraction limits ability to fund R&D, capex and margin improvements over the medium term.

Weak cash conversion

Low cash-to-earnings conversion implies not all reported profits convert into spendable cash, constraining liquidity for investments or deleveraging. Over months this elevates risk around funding capital projects, sustaining dividends, or responding to cyclical downturns without raising external finance.

Modest return on equity

An ROE under 8% reflects limited returns on shareholder capital and suggests reinvested earnings may yield modest value. Combined with weaker revenue and profit conversion, this constrains long-term shareholder value creation and could limit capital available for strategic growth initiatives.

Asahi Kasei Business Overview & Revenue Model

Company Description

Asahi Kasei Corporation (3407) is a diversified Japanese company engaged in various sectors including chemicals, materials, and healthcare. Founded in 1922, the company operates through several business segments: Chemicals, Homes, and Health Care. Its core products include synthetic fibers, plastics, and advanced materials, as well as medical devices and pharmaceuticals, with a strong emphasis on innovation and sustainability.

How the Company Makes Money

Asahi Kasei generates revenue through multiple key streams across its business segments. The Chemicals segment contributes significantly, primarily through the production of synthetic fibers and engineering plastics, which are sold to various industries including automotive and consumer goods. The Homes segment generates income from the sale of residential properties and related services, leveraging its expertise in building materials and home systems. The Health Care segment earns revenue through the sale of medical devices, pharmaceuticals, and diagnostic products. Additionally, Asahi Kasei has strategic partnerships and collaborations with other companies and research institutions that enhance its product offerings and market reach, further supporting its revenue growth. The company's focus on R&D and sustainability also positions it to capitalize on emerging trends and market demands.

Asahi Kasei Financial Statement Overview

Summary

Asahi Kasei exhibits a stable financial position with moderate profitability and cash flow generation. The company maintains a healthy gross profit margin and a balanced capital structure, but faces challenges in revenue growth and net profit conversion. The cash flow position is improving, but there is room for enhancing liquidity and operational efficiency.

Income Statement

Asahi Kasei's income statement shows a mixed performance. The TTM gross profit margin of 32.04% is healthy, indicating efficient cost management. However, the net profit margin of 4.65% reflects challenges in converting revenue into profit. The negative revenue growth rate of -20.9% in the TTM period is concerning, suggesting a decline in sales. EBIT and EBITDA margins are moderate, at 6.82% and 14.01% respectively, indicating reasonable operational efficiency but room for improvement.

Balance Sheet

The balance sheet reveals a stable financial position with a debt-to-equity ratio of 0.57, indicating moderate leverage. The return on equity (ROE) of 7.56% shows decent profitability relative to shareholder equity. The equity ratio of 47.52% suggests a balanced capital structure, providing a cushion against financial risks.

Cash Flow

Cash flow analysis indicates a positive trend with a free cash flow growth rate of 30.3% in the TTM period, highlighting improved cash generation. The operating cash flow to net income ratio of 0.35 suggests a moderate conversion of income into cash. However, the free cash flow to net income ratio of 0.37 indicates that not all earnings are translating into free cash flow, which could be a concern for liquidity.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.03T	3.04T	2.78T	2.73T	2.46T	2.11T
Gross Profit	971.89B	958.26B	815.97B	773.78B	769.77B	680.71B
EBITDA	399.77B	389.80B	218.49B	120.65B	366.89B	287.39B
Net Income	141.01B	135.00B	43.81B	-91.95B	161.88B	79.77B
Balance Sheet
Total Assets	4.00T	4.02T	3.66T	3.45T	3.35T	2.92T
Cash, Cash Equivalents and Short-Term Investments	377.54B	393.47B	338.11B	251.18B	244.64B	221.78B
Total Debt	1.08T	1.20T	955.56B	974.75B	777.22B	663.78B
Total Liabilities	2.02T	2.10T	1.81T	1.76T	1.63T	1.42T
Stockholders Equity	1.90T	1.86T	1.81T	1.66T	1.69T	1.47T
Cash Flow
Free Cash Flow	105.47B	99.81B	123.35B	-81.35B	13.56B	103.38B
Operating Cash Flow	285.13B	301.49B	295.30B	90.80B	183.27B	253.68B
Investing Cash Flow	-93.06B	-381.15B	-142.60B	-213.58B	-221.02B	-157.75B
Financing Cash Flow	-184.88B	144.57B	-94.33B	111.78B	42.32B	-95.87B

Asahi Kasei Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1206.50
• 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:3407, the sentiment is Positive. The current price of 1206.5 is below the 20-day moving average (MA) of 1481.20, below the 50-day MA of 1403.21, and above the 200-day MA of 1162.35, indicating a bullish trend. The MACD of 27.42 indicates Positive momentum. The RSI at 59.44 is Neutral, neither overbought nor oversold. The STOCH value of 38.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3407.

Asahi Kasei Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4063	75 Outperform	¥10.12T	20.04	10.87%	2.17%	3.77%	0.35%
4042	71 Outperform	¥802.21B	19.85	4.79%	4.21%	-1.21%	-27.21%
3407	69 Neutral	¥2.04T	14.51	7.48%	2.89%	3.55%	95.65%
4188	68 Neutral	¥1.35T	12.36	1.09%	3.50%	-11.50%	25.86%
4005	66 Neutral	¥769.60B	9.07	8.79%	2.68%	-1.64%	―
4004	65 Neutral	¥1.62T	151.17	1.67%	1.00%	-1.90%	-71.97%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Asahi Kasei Corporate Events

Asahi Kasei Reports No Share Buybacks Yet Under Authorized Repurchase Program

Asahi Kasei announced that, despite having an authorized share repurchase program approved by its board on November 5, 2025, the company did not repurchase any of its common stock during the period from December 1 to December 31, 2025, resulting in zero shares bought back and no funds deployed. Under the broader resolution in place through October 31, 2026, the company is permitted to repurchase up to 45 million shares, or 3.31% of its issued shares excluding treasury stock, for a maximum of ¥40 billion via discretionary trading on the Tokyo Stock Exchange, but as of December 31, 2025, no repurchases had been executed, indicating that the potential capital return and balance-sheet adjustments signaled by the program have yet to begin impacting shareholders or the company’s equity structure.

The most recent analyst rating on (JP:3407) stock is a Hold with a Yen1524.00 price target. To see the full list of analyst forecasts on Asahi Kasei stock, see the JP:3407 Stock Forecast page.

Asahi Kasei Expands Stock-Based Remuneration System

Asahi Kasei Corp. announced its decision to acquire additional shares through its stock-based remuneration system to ensure sufficient shares for future grants to directors and executives. This move, involving a maximum acquisition cost of 2,520,000,000 yen for up to 1,825,800 shares, is part of the company’s strategy to maintain its remuneration framework, potentially impacting its financial strategy and shareholder value.

The most recent analyst rating on (JP:3407) stock is a Buy with a Yen1600.00 price target. To see the full list of analyst forecasts on Asahi Kasei stock, see the JP:3407 Stock Forecast page.

Asahi Kasei Projects Record-High Operating Income Amid Strategic Growth

Asahi Kasei reported stable operating income for the fiscal 2025 second quarter, with notable growth in its healthcare and domestic housing sectors, despite challenges in its materials segment. The company anticipates record-high operating income for the second consecutive year, driven by strong performance in pharmaceuticals and electronics, and plans to enhance shareholder returns through increased dividends and a share repurchase program.

The most recent analyst rating on (JP:3407) stock is a Buy with a Yen1600.00 price target. To see the full list of analyst forecasts on Asahi Kasei stock, see the JP:3407 Stock Forecast page.

Asahi Kasei Reports Q1-Q2 2025 Financial Results with Strategic Adjustments

Asahi Kasei reported its consolidated financial results for the first and second quarters of fiscal 2025, showing a slight decline in net sales by 0.3% compared to the previous year. Despite this, the company experienced a significant increase in net income attributable to owners, rising by 10.0%. The company also revised its fiscal 2025 forecast, anticipating a modest growth in net sales and income. The elimination of six companies, including Asahi Kasei Medical Co., Ltd., from its consolidation scope, indicates a strategic shift in its business operations. The company maintained its cash dividend forecast, reflecting stability in shareholder returns.

The most recent analyst rating on (JP:3407) stock is a Buy with a Yen1600.00 price target. To see the full list of analyst forecasts on Asahi Kasei stock, see the JP:3407 Stock Forecast page.