Sumitomo Chemical Co (4005) AI Stock Analysis

• Market Cap: $584.97B
• Dividend Yield: 2.16%
• Average Volume (3M): 12.09M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.62
• Revenue Growth: 4.08%
• EPS Growth: -6.32%
• Country: JP
• Employees: 32,161
• Sector: Basic Materials
• Sector Strength: 63
• Industry: Chemicals
• EPS (TTM): 21.46
• Shares Outstanding: 1,657,217,700
• 10 Day Avg. Volume: 12,020,410
• 30 Day Avg. Volume: 12,087,003
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 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: $360.12
• Price Target Upside: 3.10% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

Sumitomo Chemical is facing substantial financial difficulties, with declining revenues and profitability, alongside increased leverage and equity deterioration. Despite some positive cash flow developments and selective recoveries in certain business segments, the negative earnings guidance and reduced dividend highlight ongoing risks. The technical indicators suggest potential for short-term gains, but the long-term trend remains concerning.

Sumitomo Chemical Co Business Overview & Revenue Model

Company Description

Sumitomo Chemical Company, Limited engages in the petrochemicals and plastics, energy and functional materials, IT-related chemicals, health and crop sciences, pharmaceuticals, and other businesses worldwide. Its Petrochemicals & Plastics segment offers synthetic resins, such as polyethylene, polypropylene, and polymethyl methacrylate resins; raw materials for synthetic fibers; and various industrial chemicals. The company's Energy & Functional Materials segment provides alumina and aluminum products used for energy products; polymer additives and rubber chemicals; synthetic rubber for tires, shoes, construction materials, and other applications; and engineering plastics and lithium-ion secondary battery materials for use in electronic components and next-generation vehicles. Its IT-Related Chemicals segment provides polarizing films, touch screen sensor panels, and color resists for LC and OLED displays; photoresists and high-purity chemicals for semiconductor manufacturing process; and compound semiconductor materials for antenna switches and other components of communication terminal equipment. The company's Health & Crop Sciences segment offers crop protection chemicals, fertilizers, feed additives, and household insecticides; active pharmaceutical ingredients and intermediates; and products to control infectious diseases. Its Pharmaceuticals segment provides prescription and diagnostic pharmaceuticals. The company's Others segment supplies electric power and steam; designs, constructs, and supervises chemical plants; provides transportation and warehousing services; and conducts physical property and environmental analysis. It has collaboration with Ginkgo Bioworks Announces Sumitomo Chemical to develop bio-based chemicals. Sumitomo Chemical Company, Limited was founded in 1913 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Sumitomo Chemical Co. generates revenue through its diversified portfolio of chemical products and solutions. The company operates in five major business segments: Petrochemicals & Plastics, Energy & Functional Materials, IT-related Chemicals, Health & Crop Sciences, and Pharmaceuticals. Each segment contributes to the company's earnings through the sale of products such as petrochemical raw materials, agricultural chemicals, electronic materials, and active pharmaceutical ingredients. Sumitomo Chemical also benefits from strategic partnerships and joint ventures, enhancing its market reach and technological capabilities. The company's focus on research and development, along with its commitment to innovation and sustainability, plays a crucial role in driving its profitability and competitive advantage in the global market.

Sumitomo Chemical Co Financial Statement Overview

Summary

Sumitomo Chemical faces challenges with declining revenue and profitability, evidenced by negative net income and margins. Despite improved cash flow in the TTM period, high leverage and reduced equity pose risks. The company needs to enhance operational efficiency to stabilize and improve its financial health.

Income Statement

The company's revenue shows a declining trend with a TTM revenue decrease of 12.1% from the previous year. Gross profit margin dropped to 26.4% in the TTM period from a high of 31.5% in 2022. The net profit margin is negative at -1.0% in TTM, indicating profitability challenges. EBIT and EBITDA margins are negative, reflecting operating difficulties.

Balance Sheet

The debt-to-equity ratio has increased slightly over the years, standing at 1.52 in TTM, indicating moderate leverage. Stockholders' equity decreased in recent periods, reflected in a reduced equity ratio of 25.4% in TTM. The return on equity has turned negative, which poses a risk to investors.

Cash Flow

The TTM period shows positive free cash flow of ¥81.4 billion, an improvement from the negative free cash flow in previous years. However, the operating cash flow to net income ratio is negative due to negative net income. This indicates a reliance on non-operating activities to generate cash.

Breakdown
Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
2.45T	2.90T	2.77T	2.29T	2.23T
	Gross Profit
499.69B	820.93B	873.86B	771.20B	706.76B
	EBIT
-387.43B	-30.98B	215.00B	137.12B	137.52B
	EBITDA
-258.31B	199.08B	388.68B	306.28B	268.52B
	Net Income Common Stockholders
-311.84B	6.99B	162.13B	46.04B	30.93B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
217.45B	337.08B	389.42B	373.73B	189.59B
	Total Assets
3.93T	4.17T	4.31T	3.99T	3.65T
	Total Debt
1.56T	1.46T	1.35T	1.35T	1.30T
	Net Debt
1.35T	1.16T	985.04B	990.15B	1.12T
	Total Liabilities
2.77T	2.68T	2.61T	2.51T	2.26T
	Stockholders Equity
965.75B	1.17T	1.22T	1.02T	922.34B
Cash Flow		Free Cash Flow
-204.19B	-31.96B	64.25B	253.65B	-14.44B
	Operating Cash Flow
-51.32B	111.62B	171.72B	374.46B	106.01B
	Investing Cash Flow
-112.24B	-19.41B	-115.42B	-177.39B	-499.67B
	Financing Cash Flow
49.25B	-178.50B	-81.39B	-39.97B	373.54B

Sumitomo Chemical Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 349.30
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4005, the sentiment is Positive. The current price of 349.3 is above the 20-day moving average (MA) of 320.44, above the 50-day MA of 341.85, and below the 200-day MA of 365.25, indicating a neutral trend. The MACD of 1.07 indicates Negative momentum. The RSI at 62.76 is Neutral, neither overbought nor oversold. The STOCH value of 92.73 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4005.

Sumitomo Chemical Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4005	51 Neutral	$584.97B	―	-16.55%	2.16%	4.08%	-6.32%
Sector *	49 Neutral	$1.96B	-1.23	-21.20%	3.72%	0.95%	-28.96%

Sumitomo Chemical Co Corporate Events

Sumitomo Chemical Revises Financial Forecast Upwards for FY 2025

Sumitomo Chemical has revised its financial forecast for the fiscal year ending March 31, 2025, reflecting improved performance across several segments. The company anticipates higher core operating income and net income due to increased sales in North America for its prostate cancer therapeutic agent and higher shipments of display-related materials. These adjustments indicate a positive outlook for the company’s financial health and strategic positioning in its industry.

Sumitomo Chemical’s Strategic Move in Asian Market

Sumitomo Chemical Co., Ltd. announced a strategic move involving its subsidiary, Sumitomo Pharma Co., Ltd., which plans to establish a new wholly-owned subsidiary to manage its Asian business. This business will undergo a simplified absorption-type company split, with 60% of the new company’s shares to be transferred to Marubeni Global Pharma Inc. The agreements are expected to strengthen Sumitomo’s financial foundation and leverage Marubeni’s global network for further growth, although the immediate financial impact is deemed immaterial.

Sumitomo Chemical to Enhance Governance with New Corporate Structure

Sumitomo Chemical has announced its decision to transition to a company with an Audit and Supervisory Committee, aiming to enhance its corporate governance structure. This move is intended to strengthen the Board’s supervisory capabilities and improve the effectiveness of audits, thereby enabling quicker and more agile management decisions while maintaining robust oversight. The transition is expected to be approved at the upcoming Ordinary General Meeting of Shareholders in June 2025.

Sumitomo Chemical to Tender Shares in Shinto Paint to Dai Nippon Toryo

Sumitomo Chemical has agreed to tender its 45.16% stake in Shinto Paint Co., Ltd. to Dai Nippon Toryo Co., Ltd. This decision comes as part of Sumitomo’s strategic review to optimize its business portfolio amid a maturing Japanese paint market. By transferring ownership to Dai Nippon Toryo, Shinto Paint is expected to benefit from increased sales opportunities, cost reductions, and enhanced productivity, aligning with Sumitomo’s broader restructuring efforts to improve profitability and competitiveness.