Asahi Kasei (3407) AI Stock Analysis

• Market Cap: ¥1.89T
• Dividend Yield: 2.87%
• Average Volume (3M): 5.14M
• Price to Earnings (P/E): 13.5
• Beta (1Y): 0.73
• 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: 5,220,430
• 30 Day Avg. Volume: 5,143,653
• 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: ¥1,599.50
• Price Target Upside: 32.57% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 100.19
• Revenue Forecast (FY): ¥3.08T

• Rating: 76 Outperform
• Price Target: ¥1,453.00 ▲(20.43% Upside)

Asahi Kasei's strong technical momentum and reasonable valuation are the primary drivers of its stock score. While financial performance is solid, improvements in cash flow management could enhance future growth prospects. The absence of earnings call data and corporate events did not impact the score.

Positive Factors

Cash Flow Generation

The strong growth in free cash flow indicates improved cash generation capability, enhancing financial flexibility and supporting future investments.

Balanced Capital Structure

A balanced capital structure with moderate leverage provides financial stability and reduces risk, allowing for sustainable growth and resilience to economic fluctuations.

Gross Profit Margin

A healthy gross profit margin reflects efficient cost management, which supports profitability and provides a buffer against cost increases or revenue declines.

Negative Factors

Revenue Growth Challenges

Declining sales indicate potential market challenges or competitive pressures, which could impact long-term growth and market position if not addressed.

Net Profit Margin

A low net profit margin suggests difficulties in converting revenue into profit, which could affect overall profitability and shareholder returns if not improved.

Free Cash Flow Conversion

The moderate conversion of earnings into free cash flow highlights potential liquidity concerns, which could limit the company's ability to fund operations and investments.

Asahi Kasei Business Overview & Revenue Model

Company Description

Asahi Kasei Corporation manufactures, processes, and sells chemical products in Japan and internationally. The company operates through three segments: Material, Homes, and Health Care. It provides caustic soda, chemical fertilizers, nitric acid, ammonia, acrylonitrile, methyl methacrylate, styrene, adipic acid, hexamethylene diamine, AH salt, propionitrile, sodium cyanide, acetonitrile, methacrylonitrile, cyclohexyl methacrylate, cyclohexanol, cyclohexane, and cyclohexene; polymers; chemical intermediates; additives; membranes and systems; clads and anchors; optical and printing materials; electronic materials; and lithium-ion battery and lead-acid battery separators. The company offers cupro fiber, lining fabric, stretch fiber, spunbond nonwovens, cupro nonwoven fabric, microfiber suede, oil-water separator, multifunctional nonwoven, deodorizing nonwoven, heat-press formable thermoplastic nonwoven, noise suppression sheet, nylon filaments, flame-resistant fiber, honeycomb fabric, cellulose nanobead, ecorise, biocradle, and bemliese products, as well as polymers; synthetic rubber; elastomers; kitchen and household products; cleaners; and packaging products. In addition, the company provides electronic devices; and autoclaved aerated concrete, foundation systems, insulation materials, and structural systems and components. Further, it involved in the construction of homes and apartments; management of rental units and condominiums; brokerage of used homes; remodeling; and mortgage financing, asset management services, and insurance products. Additionally, the company provides pharmaceuticals and diagnostic reagents; dialyzers; therapeutic apheresis; biotherapeutics and plasma derivative filters and equipment, and virus removal filters; leukocyte reduction filters; defibrillators, temperature management systems, and data solutions; and UVC LED products. Asahi Kasei Corporation was founded in 1922 and is headquartered in Tokyo, Japan.

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 shows strong revenue growth and stable profitability margins. The balance sheet is solid with a manageable debt level, but cash flow management needs improvement to sustain long-term growth.

Income Statement

Asahi Kasei's income statement shows a positive trajectory with consistent revenue growth, highlighted by a 7.9% increase in the TTM period. Gross profit margins are stable at around 31.5%, and the net profit margin has improved to 4.4% in the TTM. However, the EBIT and EBITDA margins, while positive, indicate room for improvement in operational efficiency.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of 0.64, indicating a balanced approach to leveraging. Return on equity has improved to 6.6% in the TTM, showing better profitability. The equity ratio remains stable, suggesting a solid financial foundation, though the company should monitor debt levels to maintain financial stability.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth, down by 18.9% in the TTM. The operating cash flow to net income ratio is healthy at 0.31, but the free cash flow to net income ratio indicates potential cash flow constraints. The company should focus on improving cash flow generation to support future growth.

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	424.85B	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: Negative
• RSI: Negative
• STOCH: Negative

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 1300.68, below the 50-day MA of 1242.16, and above the 200-day MA of 1084.20, indicating a bullish trend. The MACD of 35.15 indicates Negative momentum. The RSI at 71.73 is Negative, neither overbought nor oversold. The STOCH value of 94.27 is Negative, 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
3407	76 Outperform	¥1.89T	13.47	7.48%	2.87%	3.55%	95.65%
4021	72 Outperform	¥700.00B	15.55	19.69%	3.28%	10.06%	18.03%
4004	72 Outperform	$1.13T	104.96	1.67%	1.01%	-1.90%	-71.97%
4042	71 Outperform	$715.65B	17.71	4.79%	4.27%	-1.21%	-27.21%
4005	66 Neutral	¥756.34B	8.92	8.79%	2.56%	-1.64%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
4188	54 Neutral	$1.12T	10.25	1.09%	3.67%	-11.50%	25.86%

Asahi Kasei Corporate Events

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.

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.

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.

Asahi Kasei Homes to Acquire Stake in R.C. Core for Strategic Expansion

Asahi Kasei Homes, a subsidiary of Asahi Kasei Corp., is set to acquire a significant stake in R.C. Core Co., Ltd., marking a strategic move to enhance its offerings in the housing sector. This acquisition, which involves 14.01% of voting rights, is part of a broader capital and business alliance aimed at exploring new living concepts and diversifying lifestyle solutions, potentially impacting the market for naturalistic and unit homes.