Showa Denko KK (4004) AI Stock Analysis

• Market Cap: $585.79B
• Dividend Yield: 2.01%
• Average Volume (3M): 1.17M
• Price to Earnings (P/E): 15.8
• Beta (1Y): 1.18
• Revenue Growth: 5.93%
• EPS Growth: 82.41%
• Country: JP
• Employees: 23,936
• Sector: Basic Materials
• Sector Strength: 73
• Industry: Chemicals
• EPS (TTM): 48.44
• Shares Outstanding: 184,901,290
• 10 Day Avg. Volume: 1,129,750
• 30 Day Avg. Volume: 1,168,560
• PEG Ratio: 0.01
• Price to Book (P/B): 0.66
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 29.29
• 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: $4,149.41
• Price Target Upside: 19.75% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 70 Outperform
• Price Target: ¥3,549.00 ▲(2.42%Upside)

Showa Denko KK's overall stock score of 70 reflects a strong financial performance with a notable recovery in profitability and cash flow. The technical analysis supports a positive momentum, although caution is advised due to the RSI nearing overbought levels. Valuation metrics indicate a fair valuation with a moderate dividend yield. The absence of earnings call and corporate events data does not impact the overall assessment.

Showa Denko KK Business Overview & Revenue Model

Company Description

Showa Denko K.K. operates as a chemical company in Japan and internationally. It operates through seven segments: Petrochemicals, Chemicals, Electronics, Inorganics, Aluminum, Showa Denko Materials, and Others. The Petrochemicals segment offers olefins, including ethylene and propylene; organic chemicals, such as vinyl and ethyl acetate, and allyl alcohol; and polypropylene. The Chemicals segment offers functional chemicals, which include polymer emulsion and unsaturated polyester resins; industrial gases, including liquefied carbon dioxide, dry ice, oxygen, nitrogen, and hydrogen; basic chemicals, such as liquefied ammonia, acrylonitrile, and chloroprene rubber; electronic chemicals; and coating materials. The Inorganics segment offers graphite electrodes and ceramics, such as alumina and abrasives. The Aluminum segment offers rolled products, which include high-purity foils for capacitors; specialty components, such as cylinders for laser beam printers, extrusions, forged products, and heat exchangers; and beverage cans. The Electronics segment provides hard disks (HDs), SiC epitaxial wafers for power devices, compound semiconductors (LED chips), and lithium-ion battery (LIB) materials. The Showa Denko Materials segment offers electronics materials, including epoxy molding compounds, die bonding materials, CMP slurries, and anisotropic conductive films; printed wiring boards materials, which include copper-clad laminates and photosensitive dry films; mobility components comprising plastic molded products, friction materials, powder metal products, and carbon anode materials for LIB; energy storage devices and systems, including automotive and industrial batteries; diagnostics and regenerative medicine products, as well as engages in the contracted manufacturing activities. The Others segment is involved in the provision of building materials and general trading business. Showa Denko K.K. was founded in 1939 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Showa Denko KK generates revenue through its diversified portfolio of products sold to various industrial sectors. The company's revenue streams are mainly derived from the sale of petrochemicals, which are used as raw materials in multiple industries, and chemicals that include functional chemicals and industrial gases. The electronics sector contributes significantly through the production and sale of semiconductor materials and electronic components. Additionally, its inorganics division generates income through ceramics and graphite electrodes, essential for steel production. The aluminum segment also adds to the company's revenue through the manufacture and sale of aluminum products and components used in automotive and packaging industries. Strategic partnerships and collaborations with global companies further enhance its market reach and revenue potential.

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: 3465.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

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 3465 is above the 20-day moving average (MA) of 3198.90, above the 50-day MA of 2996.17, and above the 200-day MA of 3441.42, indicating a bullish trend. The MACD of 94.04 indicates Negative momentum. The RSI at 70.70 is Negative, neither overbought nor oversold. The STOCH value of 79.92 is Neutral, 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
4004	70 Outperform	$585.79B	15.75	6.01%	2.01%	5.93%	82.41%
Sector *	62 Neutral	$10.25B	9.95	-0.15%	2.86%	2.14%	-32.15%
KURRF		$4.08B	28.57	2.92%	2.75%	―	―
NSC		€3.45B	13.27	18.55%	4.82%	―	―
SOMMF		$3.99B	17.78	3.96%	0.02%	―	―
TOSCF		$4.69B	12.41	7.04%	0.03%	―	―
4114	71 Outperform	¥254.94B	14.43		6.57%	4.42%	61.92%

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.