NANKAI CHEMICAL COMPANY LIMITED (4040) AI Stock Analysis

• Market Cap: ¥7.08B
• Dividend Yield: 1.97%
• Average Volume (3M): 8.89K
• Price to Earnings (P/E): 6.1
• Beta (1Y): 1.21
• Revenue Growth: 8.43%
• EPS Growth: 2.99%
• Country: JP
• Employees: 305
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals
• EPS (TTM): 112.05
• Shares Outstanding: 2,330,330
• 10 Day Avg. Volume: 10,130
• 30 Day Avg. Volume: 8,893
• PEG Ratio: -0.37
• Price to Book (P/B): 0.62
• Price to Sales (P/S): 0.25
• P/FCF Ratio: -2.82
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 77 Outperform
• Price Target: ¥3,581.00 ▲(17.80% Upside)

Nankai Chemical Company Limited's stock is supported by strong technical indicators and attractive valuation metrics. While financial performance shows growth, concerns about cash flow and net income need addressing. The absence of earnings call data and corporate events does not impact the score significantly.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective sales strategies, supporting long-term business expansion and stability.

Operational Efficiency

Healthy operational margins suggest effective cost management and pricing strategies, contributing to sustainable profitability and competitive positioning.

Balance Sheet Health

A balanced debt-to-equity ratio indicates prudent financial management, providing flexibility for future investments and growth opportunities.

Negative Factors

Declining Net Income

Decreasing net income can impact reinvestment capabilities and shareholder returns, potentially affecting long-term growth and financial health.

Negative Free Cash Flow

Negative free cash flow indicates challenges in funding operations and growth internally, which may necessitate external financing, impacting financial stability.

Cash Conversion Challenges

Low cash conversion efficiency can strain liquidity, limiting the company's ability to invest in growth initiatives and manage unforeseen expenses.

NANKAI CHEMICAL COMPANY LIMITED Business Overview & Revenue Model

Company Description

NANKAI CHEMICAL COMPANY LIMITED (4040) is a prominent player in the chemical manufacturing sector, specializing in the production of a diverse range of chemical products, including specialty chemicals, polymers, and industrial chemicals. The company serves various industries such as agriculture, automotive, and electronics, focusing on innovation and sustainable practices to meet the evolving needs of its customers. With a commitment to quality and environmental responsibility, NANKAI aims to enhance operational efficiency and product performance across its product lines.

How the Company Makes Money

NANKAI CHEMICAL COMPANY LIMITED generates revenue primarily through the sale of its chemical products to various industries. The company's revenue model is based on a combination of direct sales to manufacturers, long-term contracts, and partnerships with distributors. Key revenue streams include the sale of specialty chemicals used in agricultural applications, polymers for the automotive sector, and industrial chemicals for general manufacturing. Additionally, NANKAI may benefit from strategic partnerships with other companies in the supply chain, enabling them to expand market reach and improve profitability. Ongoing investments in research and development also allow the company to innovate and introduce new products, further enhancing its revenue potential.

NANKAI CHEMICAL COMPANY LIMITED Financial Statement Overview

Summary

Nankai Chemical Company Limited shows consistent revenue growth and healthy operational margins. However, declining net income and negative free cash flow pose risks to long-term sustainability. The balance sheet is stable, but cash flow management needs improvement.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	21.07B	20.90B	19.99B	19.60B	17.43B	16.46B
Gross Profit	5.52B	5.51B	5.50B	4.50B	4.13B	3.87B
EBITDA	2.38B	2.55B	2.73B	1.71B	1.49B	1.08B
Net Income	890.00M	1.02B	1.16B	504.00M	462.00M	155.00M
Balance Sheet
Total Assets	23.27B	22.47B	20.26B	18.35B	16.98B	16.12B
Cash, Cash Equivalents and Short-Term Investments	1.70B	1.70B	1.71B	1.30B	1.28B	1.11B
Total Debt	5.68B	5.64B	5.21B	6.07B	7.41B	8.24B
Total Liabilities	14.67B	13.96B	12.76B	13.16B	12.31B	12.09B
Stockholders Equity	8.49B	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: 3040.00
• 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 3040 is above the 20-day moving average (MA) of 3007.10, above the 50-day MA of 2880.34, and above the 200-day MA of 2861.06, indicating a bullish trend. The MACD of 38.20 indicates Positive momentum. The RSI at 57.97 is Neutral, neither overbought nor oversold. The STOCH value of 75.56 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
4040	77 Outperform	¥7.08B	6.11	―	1.97%	8.43%	2.99%
4093	77 Outperform	¥12.51B	11.26	―	3.91%	-3.00%	-29.83%
4041	74 Outperform	¥200.18B	12.74	―	4.18%	1.69%	0.94%
4097	74 Outperform	¥56.86B	11.66	―	2.91%	3.42%	13.37%
4366	74 Outperform	¥9.44B	11.30	―	1.85%	9.07%	―
4531	74 Outperform	¥6.42B	9.11	―	3.00%	9.92%	-27.64%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%