Showa Denko KK (4004) AI Stock Analysis

• Market Cap: $572.75B
• Dividend Yield: 1.93%
• Average Volume (3M): 1.32M
• Price to Earnings (P/E): 15.4
• Beta (1Y): 1.18
• Revenue Growth: 5.93%
• EPS Growth: 82.41%
• Country: JP
• Employees: 23,936
• Sector: Basic Materials
• Sector Strength: 64
• Industry: Chemicals
• EPS (TTM): 48.44
• Shares Outstanding: 184,901,290
• 10 Day Avg. Volume: 1,381,100
• 30 Day Avg. Volume: 1,319,373
• PEG Ratio: 0.20
• Price to Book (P/B): 0.78
• 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: $4,961.20
• Price Target Upside: 56.85% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 68 Neutral
• Price Target: ¥3,464.00 ▲(9.52%Upside)

Showa Denko KK's strength lies in its financial recovery, with strong cash flow and improved profitability. The valuation is reasonable, providing a balanced risk-reward profile. However, technical indicators suggest a potential short-term pullback due to overbought conditions. The absence of earnings call and corporate event data means these areas were not factored into the score.

Showa Denko KK Business Overview & Revenue Model

Company Description

Showa Denko KK, listed under the ticker 4004, is a diversified chemical company based in Japan. The company operates across several sectors, including petrochemicals, chemicals, electronics, inorganics, and aluminum. Showa Denko produces a wide range of products such as industrial gases, functional chemicals, electronic materials, ceramics, and aluminum materials, catering to various industries including automotive, electronics, and construction.

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. Vigilance is advised due to historical fluctuations, but the trajectory suggests a strengthening financial position.

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
	EBIT
78.75B	-3.76B	59.37B	87.20B	-36.98B
	EBITDA
190.72B	96.66B	175.50B	202.64B	33.16B
	Net Income Common Stockholders
73.50B	-18.95B	32.42B	2.66B	-65.10B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
295.76B	190.32B	187.13B	236.24B	198.98B
	Total Assets
2.17T	2.03T	2.10T	2.14T	2.20T
	Total Debt
1.02T	1.00T	1.05T	830.76B	1.04T
	Net Debt
729.05B	811.56B	860.37B	594.52B	836.41B
	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: 3163.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 Positive. The current price of 3163 is above the 20-day moving average (MA) of 2989.43, above the 50-day MA of 2798.82, and below the 200-day MA of 3462.26, indicating a neutral trend. The MACD of 93.84 indicates Negative momentum. The RSI at 65.14 is Neutral, neither overbought nor oversold. The STOCH value of 76.38 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
4021	79 Outperform	€567.90B	13.31	18.55%	4.30%	10.88%	14.80%
4042	74 Outperform	$662.67B	11.43	7.04%	4.57%	5.74%	1.14%
4114	74 Outperform	¥252.69B	14.31		7.00%	4.42%	61.99%
4004	68 Neutral	$572.75B	15.40	6.01%	1.93%	5.93%	82.41%
3405	65 Neutral	¥584.58B	26.82	2.92%	2.80%	5.25%	-59.70%
4005	62 Neutral	¥552.89B	14.32	3.96%	2.16%	6.51%	―
Sector *	51 Neutral	$2.02B	-1.14	-21.36%	3.64%	2.88%	-30.57%

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.

Resonac Holdings Adjusts Bond Conversion Price Following Dividend Approval

Resonac Holdings Corporation has announced an adjustment in the conversion price for its Zero Coupon Convertible Bonds due 2028. This adjustment is due to the payment of an extraordinary dividend, which was approved at the Ordinary General Meeting of Shareholders, resulting in a new conversion price of ¥4,560.5 from the previous ¥4,638.0.

Resonac Completes Treasury Stock Disposal to Employee Association

Resonac Holdings Corporation has completed the payment procedures for the disposal of treasury stock to its Employee Shareholding Association, as initially resolved in November 2024. The number of shares and total disposal amount have been adjusted due to partial forfeiture and the finalization of employee membership in the shareholding association.