Showa Denko KK (4004) AI Stock Analysis

• Market Cap: $671.98B
• Dividend Yield: 1.75%
• Average Volume (3M): 1.18M
• Price to Earnings (P/E): 17.7
• Beta (1Y): 1.18
• Revenue Growth: 5.93%
• EPS Growth: 82.41%
• Country: JP
• Employees: 23,936
• Sector: Basic Materials
• Sector Strength: 67
• Industry: Chemicals
• EPS (TTM): 48.44
• Shares Outstanding: 184,901,290
• 10 Day Avg. Volume: 1,078,900
• 30 Day Avg. Volume: 1,184,016
• PEG Ratio: -0.53
• Price to Book (P/B): 1.02
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: $4,141.49
• Price Target Upside: 11.90% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 71 Outperform
• Price Target: ¥4,091.00 ▲(10.54%Upside)

Showa Denko KK demonstrates a robust financial recovery with strong cash generation and improved profitability. Technical indicators show bullish momentum, though caution is warranted due to overbought signals. Valuation appears fair, providing a balanced investment outlook. The lack of earnings call data and corporate events does not detract from the overall positive assessment.

Showa Denko KK Business Overview & Revenue Model

Company Description

Showa Denko KK (4004) is a prominent Japanese chemical company engaged in the production and distribution of a diverse range of chemical products. The company operates across several sectors including petrochemicals, chemicals, electronics, inorganics, and aluminum. Showa Denko's core products include industrial gases, functional chemicals, electronic materials, ceramics, and aluminum products. With a strong focus on innovation and sustainability, the company serves a wide array of industries globally, including automotive, electronics, and energy sectors.

How the Company Makes Money

Showa Denko KK generates revenue through the sale of its diverse product portfolio across its various business segments. Each segment contributes to the company's income by catering to specific market demands. For instance, in the petrochemicals sector, the company produces olefins and organic chemicals, which are essential raw materials for many industrial applications. In the electronics segment, Showa Denko provides materials and components vital for semiconductor manufacturing and other electronic applications. The inorganics segment produces ceramics and graphite electrodes, which are crucial for industries such as steelmaking. Additionally, the aluminum segment, which includes rolled products and specialty chemicals, serves the automotive and packaging industries. Showa Denko also forms strategic partnerships and collaborations to enhance its technological capabilities and market reach, further contributing to its earnings.

Showa Denko KK Financial Statement Overview

Summary

Showa Denko KK's financial statements reflect a notable recovery and strong operational performance in 2024. The income statement shows improved profitability and growth, while the balance sheet suggests a stable financial structure with manageable leverage. The cash flow statement underscores strong cash generation capabilities. Despite past volatility, the company's current financial health appears robust, with positive trends across key metrics.

Income Statement

Showa Denko KK has demonstrated a strong recovery in its income statement over the past year. The gross profit margin for 2024 is approximately 24%, indicating efficient production and cost management. The net profit margin has improved significantly to 3.99% from a negative margin in 2023, showcasing a turnaround in profitability. Revenue growth from 2023 to 2024 was 7.8%, a positive trajectory indicating rising demand or effective pricing strategies. EBIT margin improved to 5.67%, indicating better operational efficiency. Overall, the income statement reflects a positive trend with strong recovery in profitability metrics, though past volatility in margins suggests the need for cautious optimism.

Balance Sheet

The balance sheet indicates a stable financial position with a debt-to-equity ratio of 1.59, which is moderate and suggests manageable leverage. Return on equity (ROE) improved significantly to 8.78% in 2024, reflecting better utilization of shareholder capital. The equity ratio stands at 29.72%, highlighting a stable capital structure with a reasonable portion of assets financed by equity. While the company has shown improvements in equity and leverage metrics, the high level of total liabilities compared to assets suggests some risk, especially if revenue or cash flow were to decline.

Cash Flow

The cash flow statement shows robust operational cash generation with an operating cash flow to net income ratio of 2.95 in 2024, indicating strong cash conversion. Free cash flow increased significantly by 138.56% from 2023 to 2024, demonstrating improved cash management and operational efficiency. The free cash flow to net income ratio of 1.36 suggests that the company is generating more cash than reported earnings, a positive indicator for liquidity. The overall cash flow position is strong, with efficient cash management practices leading to substantial free cash flow growth.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.39T	1.29T	1.39T	1.42T	973.70B
Gross Profit	333.98B	246.62B	302.98B	337.99B	159.32B
EBITDA	190.72B	96.66B	175.50B	202.64B	33.16B
Net Income	73.50B	-18.95B	32.42B	2.66B	-65.10B
Balance Sheet
Total Assets	2.17T	2.03T	2.10T	2.14T	2.20T
Cash, Cash Equivalents and Short-Term Investments	295.76B	190.32B	187.13B	236.24B	198.98B
Total Debt	1.02T	1.03T	1.08T	830.76B	1.04T
Total Liabilities	1.48T	1.45T	1.53T	1.32T	1.49T
Stockholders Equity	664.62B	552.84B	550.25B	513.99B	405.96B
Cash Flow
Free Cash Flow	75.34B	31.58B	12.49B	47.54B	44.79B
Operating Cash Flow	163.65B	118.69B	100.35B	115.28B	109.29B
Investing Cash Flow	-52.31B	-61.87B	-54.67B	28.61B	-930.05B
Financing Cash Flow	-20.47B	-62.88B	-103.96B	-121.74B	896.52B

Showa Denko KK Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3701.00
• 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:4004, the sentiment is Positive. The current price of 3701 is above the 20-day moving average (MA) of 3494.10, above the 50-day MA of 3241.06, and above the 200-day MA of 3460.23, indicating a bullish trend. The MACD of 135.14 indicates Negative momentum. The RSI at 74.67 is Negative, neither overbought nor oversold. The STOCH value of 83.02 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4004.

Showa Denko KK Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4021	81 Outperform	€659.15B	15.17	18.55%	3.60%	10.88%	14.80%
4114	77 Outperform	¥264.87B	14.82		6.33%	4.42%	61.92%
4042	74 Outperform	¥729.81B	12.59	7.04%	4.08%	5.74%	1.14%
Sector *	71 Outperform	¥184.85B	11.23	6.29%	3.20%	3.88%	3.23%
4004	71 Outperform	$671.98B	17.71	6.01%	1.75%	5.93%	82.41%
3405	65 Neutral	¥619.56B	28.22	2.92%	2.82%	5.25%	-59.70%
4005	61 Neutral	¥615.84B	15.94	3.96%	2.41%	6.51%	―

Showa Denko KK Corporate Events

Resonac Holdings Reports on Cyberattack Recovery Efforts

Resonac Holdings Corporation has experienced a cyberattack involving ransomware, leading to unauthorized modifications to files on its servers and PCs. The company has been working to restore systems and resume normal operations while investigating the incident with external specialists and coordinating with law enforcement and government agencies. As of June 3, operations for certain businesses have resumed, and there have been no confirmed information leaks. Resonac is implementing comprehensive countermeasures to prevent future incidents and assessing the potential impact on business performance.

The most recent analyst rating on (JP:4004) stock is a Hold with a Yen4100.00 price target. To see the full list of analyst forecasts on Showa Denko KK stock, see the JP:4004 Stock Forecast page.