Showa Denko KK (4004) AI Stock Analysis

• Market Cap: $1.06T
• Dividend Yield: 1.14%
• Average Volume (3M): 2.12M
• Price to Earnings (P/E): 29.0
• Beta (1Y): 1.09
• Revenue Growth: 1.60%
• EPS Growth: -6.74%
• Country: JP
• Employees: 23,936
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals
• EPS (TTM): 60.27
• Shares Outstanding: 184,901,290
• 10 Day Avg. Volume: 1,944,270
• 30 Day Avg. Volume: 2,122,460
• PEG Ratio: -0.02
• Price to Book (P/B): 1.09
• Price to Sales (P/S): 0.52
• P/FCF Ratio: 9.63
• Enterprise Value/Market Cap: 1.31
• Enterprise Value/Revenue: 1.03
• Enterprise Value/Gross Profit: 4.19
• Enterprise Value/Ebitda: 8.77
• 1Y Price Target: $6,274.84
• Price Target Upside: 9.66% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: ¥6,501.00 ▲(13.61% Upside)

Showa Denko KK's overall stock score reflects strong financial performance and positive technical indicators, indicating a robust recovery and bullish momentum. However, the high P/E ratio suggests potential overvaluation, which tempers the overall score. Investors should weigh the strong operational performance against valuation concerns.

Showa Denko KK Business Overview & Revenue Model

Company Description

Resonac Holdings Corp. engages in the manufacture and sale of chemical products. It operates through the following segments: Petrochemicals, Chemicals, Electronics, Inorganics, Aluminum, and Others. The Petrochemicals segment produces and merchandises olefins, organic chemicals, and synthetic resin products. The Chemicals segment manufactures and sells functional polymers, industrial gases, basic chemicals, information electronic chemicals, and coating materials. The Electronics segment covers hard disks, silicon carbide epitaxial wafer, compound semiconductors, and lithium ion battery materials. The Inorganics segment deals with graphite electrodes and ceramics. The Aluminum segment manufactures and sells high-purity aluminum foil for capacitors, cylinders for laser beam printers, extruded and forged products, heat exchanger, and beverage cans. The Others segment deals with wholesale and building materials. The company was founded by Nobuteru Mori on June 1, 1939 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Showa Denko generates revenue through multiple streams, primarily by manufacturing and selling specialty chemicals and materials to various industries. Key revenue sources include the production of semiconductor materials, aluminum products, and petrochemical derivatives. The company leverages its technological expertise to create high-value products that meet the demands of rapidly evolving markets. Additionally, Showa Denko engages in strategic partnerships with leading companies in sectors like electronics and automotive, which helps to secure long-term contracts and steady income. The company's emphasis on R&D allows it to introduce innovative products, further enhancing its competitive edge and revenue potential.

Showa Denko KK Financial Statement Overview

Summary

Showa Denko KK's financial statements reflect a notable recovery with improved profitability and growth. The income statement shows strong recovery in profitability metrics, the balance sheet suggests a stable financial structure with manageable leverage, and the cash flow statement underscores strong cash generation capabilities.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.36T	1.39T	1.29T	1.39T	1.42T	973.70B
Gross Profit	334.04B	333.98B	246.62B	302.98B	337.99B	159.32B
EBITDA	159.51B	198.62B	96.66B	175.50B	148.38B	33.16B
Net Income	36.63B	73.50B	-6.50B	32.42B	-12.09B	-76.30B
Balance Sheet
Total Assets	2.04T	2.17T	2.05T	2.10T	2.14T	2.20T
Cash, Cash Equivalents and Short-Term Investments	207.97B	295.76B	190.32B	187.13B	236.24B	198.98B
Total Debt	974.35B	1.02T	1.03T	1.08T	830.76B	1.04T
Total Liabilities	1.36T	1.48T	1.47T	1.53T	1.32T	1.49T
Stockholders Equity	647.64B	664.62B	560.13B	550.25B	513.99B	405.96B
Cash Flow
Free Cash Flow	0.00	75.34B	31.58B	12.49B	47.54B	44.79B
Operating Cash Flow	0.00	163.65B	118.69B	100.35B	115.28B	109.29B
Investing Cash Flow	0.00	-52.31B	-61.87B	-54.67B	28.61B	-930.05B
Financing Cash Flow	0.00	-20.47B	-62.88B	-103.96B	-121.74B	896.52B

Showa Denko KK Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 5722.00
• 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:4004, the sentiment is Neutral. The current price of 5722 is below the 20-day moving average (MA) of 5868.20, above the 50-day MA of 5157.10, and above the 200-day MA of 3767.38, indicating a neutral trend. The MACD of 158.20 indicates Positive momentum. The RSI at 52.38 is Neutral, neither overbought nor oversold. The STOCH value of 40.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	72 Outperform	¥696.60B	15.42	20.91%	3.41%	13.93%	23.19%
4042	71 Outperform	$697.83B	17.27	4.79%	4.55%	-1.21%	-27.20%
4004	70 Outperform	$1.06T	29.00	5.90%	1.14%	1.60%	-6.74%
4114	63 Neutral	¥275.26B	15.69	―	5.84%	1.44%	58.90%
3405	62 Neutral	¥536.97B	35.26	2.06%	3.26%	0.55%	-69.21%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
4005	60 Neutral	$703.12B	8.29	8.79%	2.64%	-1.64%	―

Showa Denko KK Corporate Events

Resonac Transfers Automotive Molded Parts Business to Moriroku

Resonac Holdings Corporation has announced the transfer of its automotive molded parts business in Japan and Thailand to Moriroku Co., Ltd. This strategic move is part of Resonac’s long-term vision to optimize its business portfolio and ensure sustainable growth. By transferring the business to Moriroku, which has a global manufacturing footprint and expertise in resin-molded components, Resonac aims to overcome its operational constraints and enhance the competitiveness and growth potential of the business. The transaction is expected to create synergies and high added value through collaboration with Moriroku’s advanced technologies.

The most recent analyst rating on (JP:4004) stock is a Buy with a Yen6000.00 price target. To see the full list of analyst forecasts on Showa Denko KK stock, see the JP:4004 Stock Forecast page.

Resonac Transfers European Battery Subsidiary to AURELIUS

Resonac Holdings Corporation announced the transfer of its European automotive and industrial lead-acid battery subsidiary, Fiamm Energy Technology S.p.A., to AURELIUS INVESTMENT LUX SIXTEEN S.À R.L. This strategic move is part of Resonac’s long-term vision to optimize its business portfolio and ensure FET’s growth under AURELIUS, a company known for its expertise in the European manufacturing industry. The transaction is expected to strengthen FET’s competitiveness and support its proactive business operations.

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.