Konoshima Chemical Co., Ltd. (4026) AI Stock Analysis

• Market Cap: ¥17.16B
• Dividend Yield: 2.81%
• Average Volume (3M): 152.24K
• Price to Earnings (P/E): 7.8
• Beta (1Y): 1.10
• Revenue Growth: 0.23%
• EPS Growth: -8.64%
• Country: JP
• Employees: 448
• Sector: Industrials
• Sector Strength: 72
• Industry: Construction
• EPS (TTM): 49.59
• Shares Outstanding: 9,240,000
• 10 Day Avg. Volume: 182,080
• 30 Day Avg. Volume: 152,236
• PEG Ratio: -0.70
• Price to Book (P/B): 0.90
• Price to Sales (P/S): 0.43
• P/FCF Ratio: 6.28
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: ¥2,281.00 ▲(48.89% Upside)
• Action: Reiterated Date: 03/12/26
• Date: Action: Reiterated 03/12/26

The score is driven primarily by attractive valuation (low P/E and a dividend yield) and supportive technicals (price above key moving averages with positive MACD). Financial performance is solid on revenue growth and balance sheet strength, but the sharp decline in free cash flow growth and weaker EBIT/EBITDA margins temper the overall rating.

Positive Factors

Revenue growth & margins

Sustained revenue growth and healthy gross and net margins indicate persistent end-market demand and product-level profitability. Over a 2–6 month horizon this supports reinvestment capacity, pricing power resilience, and a stable earnings base that underpins operational planning and shareholder returns.

Improved leverage and equity strength

Reduced leverage and a solid equity ratio strengthen financial flexibility, lowering refinancing and solvency risk. A double-digit ROE shows effective capital deployment. Together these durable balance-sheet improvements enhance ability to fund capex, manage downturns, and execute strategic initiatives without heavy external funding.

Earnings convert to free cash flow

A 0.60 FCF-to-net-income conversion means a substantial portion of reported earnings becomes discretionary cash. This durable cash conversion supports dividends, debt repayment and reinvestment if operating cash is stabilized, providing financial optionality even amid cyclical pressures.

Negative Factors

Sharp free cash flow decline

A steep 35.5% drop in free cash flow growth materially reduces internally available funds for capex, dividends and deleveraging. If driven by structural working-capital strain or rising maintenance/investment needs, the decline can persist and constrain strategic flexibility and balance-sheet repair over several quarters.

Eroding operating margins

Falling EBIT/EBITDA margins point to cost pressure or weaker pricing that compresses core profitability. If margin erosion is structural—due to higher input costs or competitive pricing—it reduces free cash flow potential and limits the company's ability to fund growth or absorb shocks over the medium term.

Low cash efficiency vs. net income

An OCF-to-net-income ratio of 0.23 shows earnings are not translating into cash efficiently. Persistent divergence raises liquidity and sustainability concerns for dividends and capex, potentially forcing external financing or cuts to investment if cash conversion does not improve.

Konoshima Chemical Co., Ltd. Business Overview & Revenue Model

Company Description

Konoshima Chemical Co.,Ltd. manufactures and sells building materials, chemicals, and ceramics. The company offers residential and non-residential ceramic siding, eaves, gable boards, and refractory panels; and non-combustible building materials for residential and non-residential buildings. It also provides chemicals, such as magnesium oxide, flame retardant magnesium hydroxide, and magnesium carbonate; and functional ceramics. The company was founded in 1917 and is headquartered in Osaka, Japan.

How the Company Makes Money

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Konoshima Chemical Co., Ltd. Financial Statement Overview

Summary

Strong revenue growth (9.1%) and stable profitability (net margin 5.23%) support the score, and leverage has improved (debt-to-equity 0.69) with solid ROE (11.06%). Offsetting this, free cash flow growth declined sharply (-35.5%) and EBIT/EBITDA margins have weakened, raising concerns about cash generation and cost pressure.

Income Statement

Konoshima Chemical Co., Ltd. has shown a strong revenue growth rate of 9.1% in the latest year, indicating a positive trajectory in sales. The gross profit margin is healthy at 25.28%, although it has slightly decreased from previous years. The net profit margin is stable at 5.23%, reflecting consistent profitability. However, the EBIT and EBITDA margins have declined, suggesting potential cost pressures or operational inefficiencies.

Balance Sheet

The company's debt-to-equity ratio has improved to 0.69, indicating a reduction in leverage and a stronger equity position. The return on equity is solid at 11.06%, showcasing effective use of shareholder funds. The equity ratio stands at 42.19%, reflecting a stable financial structure. However, the company should continue to monitor its debt levels to maintain financial stability.

Cash Flow

The free cash flow growth rate has significantly declined by 35.5%, raising concerns about cash generation. The operating cash flow to net income ratio is 0.23, indicating moderate cash flow efficiency. The free cash flow to net income ratio is 0.60, suggesting that a substantial portion of earnings is converted into free cash flow. The company needs to focus on improving its cash flow generation to support future growth.

Breakdown	TTM	Apr 2024	Apr 2023	Apr 2023	Apr 2022	Apr 2021
Income Statement
Total Revenue	25.12B	27.41B	25.97B	23.98B	21.79B	19.78B
Gross Profit	6.65B	6.93B	6.83B	6.74B	6.62B	5.84B
EBITDA	3.60B	3.76B	3.96B	3.51B	3.10B	2.64B
Net Income	1.57B	1.43B	1.62B	1.53B	1.36B	1.09B
Balance Sheet
Total Assets	30.68B	30.80B	29.82B	29.42B	24.74B	18.63B
Cash, Cash Equivalents and Short-Term Investments	1.30B	1.44B	1.17B	2.15B	1.87B	967.00M
Total Debt	9.31B	9.24B	10.44B	7.98B	5.60B	3.09B
Total Liabilities	19.60B	17.83B	17.91B	18.86B	15.37B	10.09B
Stockholders Equity	11.08B	12.96B	11.91B	10.56B	9.37B	8.54B
Cash Flow
Free Cash Flow	0.00	1.86B	-2.25B	-2.36B	-345.00M	1.83B
Operating Cash Flow	0.00	3.09B	3.34B	1.82B	2.06B	3.01B
Investing Cash Flow	0.00	-1.24B	-5.64B	-4.17B	-2.37B	-1.14B
Financing Cash Flow	0.00	-1.59B	1.32B	2.63B	1.22B	-2.35B

Konoshima Chemical Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1532.00
• 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:4026, the sentiment is Positive. The current price of 1532 is below the 20-day moving average (MA) of 1914.05, below the 50-day MA of 1766.58, and above the 200-day MA of 1485.01, indicating a neutral trend. The MACD of 55.73 indicates Positive momentum. The RSI at 51.99 is Neutral, neither overbought nor oversold. The STOCH value of 59.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4026.

Konoshima Chemical Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5351	80 Outperform	¥100.54B	0.94	―	4.28%	12.87%	-13.69%
7871	80 Outperform	¥17.77B	7.05	―	3.09%	0.27%	7.57%
4026	76 Outperform	¥17.16B	7.85	―	2.81%	0.23%	-8.64%
4216	68 Neutral	¥111.08B	25.05	―	2.17%	-2.39%	-29.17%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
5391	62 Neutral	¥10.31B	14.49	―	4.54%	7.32%	-93.45%
4212	60 Neutral	¥70.06B	12.73	―	3.27%	12.09%	5.46%