Resonac Holdings Corporation (4004) AI Stock Analysis

• Market Cap: ¥2.16T
• Dividend Yield: 1%
• Average Volume (3M): 1.58M
• Price to Earnings (P/E): 74.3
• Beta (1Y): 1.25
• Revenue Growth: -1.90%
• EPS Growth: -71.97%
• Country: JP
• Employees: 23,936
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals
• EPS (TTM): 127.12
• Shares Outstanding: 184,901,290
• 10 Day Avg. Volume: 1,996,130
• 30 Day Avg. Volume: 1,582,476
• PEG Ratio: -0.67
• Price to Book (P/B): 1.69
• Price to Sales (P/S): 0.88
• P/FCF Ratio: 50.11
• 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: ¥8,050.00
• Price Target Upside: 18.21% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 448.83
• Revenue Forecast (FY): ¥1.38T

• Rating: 58 Neutral
• Price Target: ¥12,407.00 ▲(82.19% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by moderate financial quality (cyclical and recently weaker earnings with still-elevated leverage, partially offset by generally positive cash generation). Technicals are strong but appear overextended, while valuation is a significant negative due to the very high P/E and low dividend yield.

Positive Factors

Consistent cash generation

Operating cash flow has been consistently robust across cycles, and free cash flow has been positive most years. That durable cash generation supports recurring R&D, working capital and capex needs, providing a buffer against cyclical revenue swings and reducing reliance on external financing over months.

Semiconductor materials exposure

Exposure to specialty semiconductor and electronic materials ties the company to secular demand for advanced electronics and packaging. These products require customer qualification and technical differentiation, creating higher-margin, sticky revenue streams and long sales cycles that support durable profitability.

Improving leverage trend

The improvement in leverage and equity growth reflects progress on balance-sheet repair, increasing financial flexibility. A lower ratio versus prior peaks reduces refinancing pressure and interest sensitivity, strengthening resilience to downturns and enabling strategic investments over the medium term.

Negative Factors

Cyclical earnings profile

Earnings volatility from year to year shows the company's profit base is sensitive to end-market cycles and product mix. This cyclical profile limits predictability of cash flows and returns, complicates capital allocation and raises the chance of margin compression during softer periods over the next several months.

High absolute debt

Despite ratio improvement, near-¥1 trillion of debt is a large absolute burden. High debt increases interest expense sensitivity to rate moves and constrains flexibility for M&A, capex or share returns. In weaker earnings years, servicing this stock of debt can pressure cash flow and require deleveraging actions.

Revenue and profit volatility

Material swings in top-line and net income demonstrate sensitivity to cyclical demand and commodity or pricing pressures in basic-chemicals segments. This volatility can reduce margin sustainability, limit reinvestment capacity and heighten execution risk for multi-quarter plans or long qualification cycles.

Resonac Holdings Corporation 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.

Resonac Holdings Corporation Financial Statement Overview

Summary

Moderate fundamentals: earnings are cyclical and inconsistent (strong 2024 followed by materially weaker 2025), while leverage remains meaningfully elevated despite improvement. Cash flow is generally solid with positive free cash flow, but it stepped down notably in 2025, increasing risk in softer cycles.

Income Statement

Revenue has been volatile, with a return to growth in 2024 (+7.8%) followed by a slight decline in 2025 (-1.1%). Profitability is mixed: 2024 showed solid margins (gross margin ~24.0%, net margin ~5.3%) after a loss year in 2023, but 2025 earnings fell materially (net income down to ~¥29B from ~¥74B) and operating profit also softened. Overall, the company has demonstrated it can generate healthy profits in stronger years, but the earnings profile remains cyclical and inconsistent.

Balance Sheet

Leverage remains elevated for the period shown. Debt-to-equity improved from very high levels in 2020 (~2.55x) and 2022–2023 (~1.93x–1.84x) to ~1.54x in 2024, and equity has grown over time, but total debt is still substantial (~¥0.99T–¥1.06T range). Returns on equity are also uneven (negative in 2023, stronger in 2024 at ~11.1%), indicating balance-sheet risk is manageable but not low, and performance is sensitive to profitability swings.

Cash Flow

Cash generation is generally positive, with operating cash flow consistently strong (roughly ¥100B–¥164B annually). Free cash flow is also positive across the years provided, peaking in 2024 (~¥75B) but dropping in 2025 (~¥24B), showing some volatility likely tied to earnings and investment needs. Cash conversion is decent in healthier periods (e.g., meaningful free cash flow relative to net income in 2024), but the step-down in 2025 is a key watch item.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.36T	1.35T	1.39T	1.29T	1.39T	1.42T
Gross Profit	334.04B	323.80B	333.98B	246.62B	302.98B	337.99B
EBITDA	159.51B	152.36B	198.62B	96.66B	175.50B	148.38B
Net Income	36.63B	29.03B	73.50B	-6.50B	32.42B	-12.09B
Balance Sheet
Total Assets	2.04T	2.11T	2.17T	2.05T	2.10T	2.14T
Cash, Cash Equivalents and Short-Term Investments	207.97B	261.97B	295.76B	190.32B	187.13B	236.24B
Total Debt	979.39B	987.98B	1.02T	1.03T	1.06T	830.76B
Total Liabilities	1.36T	1.38T	1.48T	1.47T	1.53T	1.32T
Stockholders Equity	647.64B	698.85B	664.62B	560.13B	550.25B	513.99B
Cash Flow
Free Cash Flow	0.00	23.56B	75.34B	31.58B	12.49B	47.54B
Operating Cash Flow	0.00	130.29B	163.65B	118.69B	100.35B	115.28B
Investing Cash Flow	0.00	-87.12B	-52.31B	-61.87B	-54.67B	28.61B
Financing Cash Flow	0.00	-69.89B	-20.47B	-62.88B	-103.96B	-121.74B

Resonac Holdings Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6810.00
• 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 6810 is below the 20-day moving average (MA) of 10268.55, below the 50-day MA of 8477.96, and above the 200-day MA of 5430.61, indicating a bullish trend. The MACD of 966.48 indicates Negative momentum. The RSI at 76.95 is Negative, neither overbought nor oversold. The STOCH value of 79.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4004.

Resonac Holdings Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4063	75 Outperform	¥12.17T	24.10	10.87%	2.17%	3.77%	0.35%
3407	68 Neutral	¥2.51T	15.94	7.48%	2.89%	3.55%	95.65%
4042	68 Neutral	¥868.55B	25.35	4.79%	4.21%	-1.21%	-27.21%
4188	66 Neutral	¥1.54T	17.55	1.09%	3.50%	-11.50%	25.86%
4005	65 Neutral	¥932.85B	9.58	8.79%	2.68%	-1.64%	―
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
4004	58 Neutral	¥2.16T	74.33	1.67%	1.00%	-1.90%	-71.97%

Resonac Holdings Corporation Corporate Events

Resonac to Sell Shares Held by Untraceable Shareholders Under Companies Act

Resonac Holdings Corporation has resolved at its board meeting to sell shares held by so-called untraceable shareholders, in line with provisions of Japan’s Companies Act. These untraceable shareholders are defined as investors who have not received company notices at their registered address and have not collected dividends for at least five consecutive years.

Details of the affected shareholders, including identification numbers and shareholdings, will be disclosed through an electronic public notice on February 17, 2026, and objections will be accepted until May 20, 2026. The sale or company purchase of the relevant shares is scheduled to begin on or after June 23, 2026, a move that is expected to streamline Resonac’s shareholder registry and improve administrative efficiency for both the company and remaining shareholders under Japanese corporate governance practices.

The most recent analyst rating on (JP:4004) stock is a Hold with a Yen10024.00 price target. To see the full list of analyst forecasts on Resonac Holdings Corporation stock, see the JP:4004 Stock Forecast page.

Resonac Moves to Enable Crasus Petrochemicals Spin-Off via Article Changes

Resonac Holdings plans to partially amend its Articles of Incorporation to facilitate a planned spin-off of its wholly owned petrochemicals subsidiary, Crasus Chemical Inc. The move reflects the company’s ongoing portfolio shift toward higher-growth semiconductor and electronic materials, while retaining a minority stake of less than 20% in the spun-off entity.

Because key legislation governing restructuring and tax treatment is being revised and remains uncertain, management is seeking authority for the Board to decide matters related solely to an in-kind dividend of Crasus Chemical shares once legal requirements are clarified. This temporary new article would only apply to the certified spin-off transaction, enabling faster execution to maximize shareholder value, and would automatically be deleted after the specified dividend of surplus takes effect.

The most recent analyst rating on (JP:4004) stock is a Hold with a Yen10024.00 price target. To see the full list of analyst forecasts on Resonac Holdings Corporation stock, see the JP:4004 Stock Forecast page.