NANKAI CHEMICAL COMPANY LIMITED (4040) AI Stock Analysis

• Market Cap: ¥7.28B
• Dividend Yield: 2.24%
• Average Volume (3M): 11.04K
• Price to Earnings (P/E): 6.2
• Beta (1Y): 1.29
• Revenue Growth: 4.57%
• EPS Growth: -13.43%
• Country: JP
• Employees: 305
• Sector: Basic Materials
• Sector Strength: 73
• Industry: Chemicals
• EPS (TTM): 116.30
• Shares Outstanding: 2,330,330
• 10 Day Avg. Volume: 8,780
• 30 Day Avg. Volume: 11,040
• PEG Ratio: 0.00
• Price to Book (P/B): 1.43
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -17.83
• 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: ¥3,572.00
• Price Target Upside: 15.79% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 76 Outperform
• Price Target: ¥3,572.00 ▲(15.79%Upside)

Nankai Chemical Company Limited receives a strong overall stock score due to its undervaluation and positive technical indicators. While financial performance raises concerns about cash flow management, the company's stable balance sheet and attractive valuation metrics enhance its investment appeal.

NANKAI CHEMICAL COMPANY LIMITED Business Overview & Revenue Model

Company Description

NANKAI CHEMICAL COMPANY LIMITED is a Japanese chemical company that operates primarily in the industrial chemicals sector. The company is engaged in the production and sale of a variety of chemical products including inorganic, organic, and fine chemicals that are used in various industries such as automotive, electronics, pharmaceuticals, and agriculture. NANKAI CHEMICAL COMPANY LIMITED is known for its commitment to quality and innovation, striving to meet the diverse needs of its customers through advanced chemical solutions.

How the Company Makes Money

NANKAI CHEMICAL COMPANY LIMITED generates revenue through the manufacturing and sale of its chemical products. The company's key revenue streams include the sale of inorganic chemicals like chlor-alkali products, which are used widely in industries such as textiles, paper, and detergents. Additionally, the company produces organic chemicals and fine chemicals that serve as essential components in pharmaceuticals and electronic materials. The company maintains significant partnerships with industrial manufacturers and distributors to facilitate the wide-reaching distribution of its products, contributing substantially to its earnings. Furthermore, the company's focus on R&D enables it to develop innovative products that cater to niche markets, enhancing its competitive edge and profitability.

NANKAI CHEMICAL COMPANY LIMITED Financial Statement Overview

Summary

Nankai Chemical Company Limited exhibits strong revenue growth and healthy operational margins. However, the decline in net income and negative free cash flow pose significant challenges for long-term sustainability. The stable balance sheet suggests a need for improved cash flow management to support future growth.

Income Statement

Nankai Chemical Company Limited shows a consistent revenue growth over the years with a recent growth rate of 4.56% from 2024 to 2025. Gross profit margin is stable at approximately 26.38%, while the net profit margin has decreased slightly to 4.86% in 2025 due to a decrease in net income. The EBIT and EBITDA margins are generally healthy, indicating good operational efficiency.

Balance Sheet

The company's balance sheet reflects a moderate debt-to-equity ratio of 0.67, suggesting a balanced use of debt and equity financing. The return on equity (ROE) is 12.10%, indicating a solid ability to generate profits from shareholders' equity. The equity ratio of 37.37% shows a reasonable level of equity financing relative to total assets.

Cash Flow

Cash flow analysis reveals a significant decline in free cash flow, turning negative in 2025. Operating cash flow is positive but has decreased substantially compared to 2024. The operating cash flow to net income ratio is 0.18, indicating challenges in converting profits into cash, which could be a risk if sustained.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	20.21B	20.90B	19.99B	19.60B	17.43B	16.46B
Gross Profit	5.41B	5.51B	5.50B	4.50B	4.13B	3.87B
EBITDA	2.00B	2.55B	2.73B	1.80B	1.49B	1.08B
Net Income	929.00M	1.02B	1.16B	504.00M	462.00M	155.00M
Balance Sheet
Total Assets	22.59B	22.47B	20.26B	18.35B	16.98B	16.12B
Cash, Cash Equivalents and Short-Term Investments	1.61B	1.70B	1.71B	1.30B	1.28B	1.11B
Total Debt	6.27B	5.64B	5.21B	6.07B	7.41B	8.24B
Total Liabilities	14.37B	13.96B	12.76B	13.16B	12.31B	12.09B
Stockholders Equity	8.15B	8.40B	7.42B	5.13B	4.62B	3.99B
Cash Flow
Free Cash Flow	0.00	-1.85B	570.00M	131.00M	383.00M	-321.00M
Operating Cash Flow	0.00	181.00M	2.65B	1.77B	1.59B	1.26B
Investing Cash Flow	0.00	-490.00M	-1.94B	-371.00M	-614.00M	-1.81B
Financing Cash Flow	0.00	243.00M	-327.00M	-1.40B	-858.00M	893.00M

NANKAI CHEMICAL COMPANY LIMITED Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 3085.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4040, the sentiment is Neutral. The current price of 3085 is below the 20-day moving average (MA) of 3120.00, above the 50-day MA of 3071.34, and above the 200-day MA of 2469.99, indicating a neutral trend. The MACD of -0.79 indicates Positive momentum. The RSI at 47.96 is Neutral, neither overbought nor oversold. The STOCH value of 12.69 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4040.

NANKAI CHEMICAL COMPANY LIMITED Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4366	78 Outperform	¥7.57B	9.26		3.12%	17.92%	―
4041	78 Outperform	¥182.03B	12.03		4.91%	0.50%	-8.77%
4097	77 Outperform	¥55.70B	11.64		1.98%	6.12%	6.26%
4531	77 Outperform	¥5.74B	6.36		3.42%	16.98%	16.45%
4040	76 Outperform	¥7.28B	6.23		2.24%	4.57%	-13.43%
4093	76 Outperform	¥12.37B	9.56		5.08%	-1.75%	-9.10%
Sector *	44 Neutral	C$969.59M	-6.68	-13.73%	2.50%	17.55%	-32.57%