NANKAI CHEMICAL COMPANY LIMITED (4040) AI Stock Analysis

• Market Cap: ¥7.34B
• Dividend Yield: 2.22%
• Average Volume (3M): 19.31K
• Price to Earnings (P/E): 6.2
• Beta (1Y): 1.28
• Revenue Growth: 4.57%
• EPS Growth: -13.43%
• Country: JP
• Employees: 305
• Sector: Basic Materials
• Sector Strength: 66
• Industry: Chemicals
• EPS (TTM): 116.30
• Shares Outstanding: 2,330,330
• 10 Day Avg. Volume: 11,990
• 30 Day Avg. Volume: 19,310
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 76 Outperform
• Price Target: ¥3,572.00 ▲(15.04%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 (4040) is a Japanese corporation engaged in the production and distribution of various chemical products. The company operates within the chemical industry, offering a wide range of products that include basic chemicals, fine chemicals, and other specialized chemical materials. NANKAI CHEMICAL is dedicated to providing high-quality chemical solutions that cater to diverse industrial needs, ensuring innovation and sustainability in its operations.

How the Company Makes Money

NANKAI CHEMICAL COMPANY LIMITED generates revenue primarily through the sale of its chemical products. The company's revenue model is centered around its diverse product portfolio, which includes basic chemicals used in industrial applications, fine chemicals for more specialized markets, and other chemical materials. NANKAI CHEMICAL's key revenue streams include domestic sales within Japan as well as international exports to various global markets. The company may also engage in partnerships and collaborations with other firms to enhance its product offerings and reach new markets, contributing to its overall earnings. Additionally, innovations in product development and efficiency improvements in manufacturing processes play a significant role in maintaining competitive pricing and maximizing 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
	EBIT
1.25B	1.31B	1.56B	796.00M	739.00M	730.00M
	EBITDA
2.00B	2.55B	2.73B	1.80B	1.49B	1.08B
	Net Income Common Stockholders
929.00M	1.02B	1.16B	504.00M	462.00M	155.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.61B	1.70B	1.71B	1.30B	1.28B	1.11B
	Total Assets
22.59B	22.47B	20.26B	18.35B	16.98B	16.12B
	Total Debt
6.27B	5.64B	5.21B	6.07B	7.41B	8.24B
	Net Debt
4.67B	3.94B	3.50B	4.77B	6.13B	7.14B
	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: Positive
• Last Price: 3105.00
• 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:4040, the sentiment is Positive. The current price of 3105 is below the 20-day moving average (MA) of 3248.50, above the 50-day MA of 2851.88, and above the 200-day MA of 2436.41, indicating a neutral trend. The MACD of 30.98 indicates Positive momentum. The RSI at 49.97 is Neutral, neither overbought nor oversold. The STOCH value of 41.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	¥7.58B	9.24		3.12%	17.92%	―
4097	77 Outperform	¥58.41B	12.21		1.89%	6.12%	6.26%
4041	77 Outperform	¥163.61B	10.75		5.46%	0.50%	-8.77%
4531	77 Outperform	¥5.74B	6.36		3.42%	16.98%	16.45%
4040	76 Outperform	¥7.34B	6.23		2.22%	4.57%	-13.43%
4093	72 Outperform	¥12.41B	9.59		5.08%	-1.75%	-9.10%
Sector *	51 Neutral	$2.01B	-1.27	-21.11%	5.15%	2.92%	-30.46%