Kanto Denka Kogyo Co., Ltd. (4047) AI Stock Analysis

• Market Cap: ¥101.39B
• Dividend Yield: 1.6%
• Average Volume (3M): 173.86K
• Price to Earnings (P/E): 32.7
• Beta (1Y): 0.88
• Revenue Growth: 1.20%
• EPS Growth: N/A
• Country: JP
• Employees: 1,145
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 28.18
• Shares Outstanding: 57,546,047
• 10 Day Avg. Volume: 198,850
• 30 Day Avg. Volume: 173,856
• PEG Ratio: -0.09
• Price to Book (P/B): 0.76
• Price to Sales (P/S): 0.80
• P/FCF Ratio: -20.40
• 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): 29.6
• Revenue Forecast (FY): ¥64.50B

• Rating: 64 Neutral
• Price Target: ¥1,831.00 ▲(65.70% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by improving profitability and a solid balance sheet, tempered by negative free cash flow and revenue volatility. Technically, the stock is in a strong uptrend but appears overbought, adding near-term risk. Valuation is a headwind due to a higher P/E and modest dividend yield.

Positive Factors

Improving profitability and margins

Kanto Denka’s net margin turning positive to 5.21% alongside improved EBIT/EBITDA margins signals a durable operational recovery. Stronger margins and a 22.44% gross margin increase the firm’s ability to absorb input swings, fund reinvestment and sustain profitability beyond transitory cycles.

Solid equity base and moderate leverage

A 0.57 debt-to-equity ratio and a 53.34% equity ratio provide structural balance-sheet resilience. Moderate leverage preserves borrowing capacity for strategic investment while the strong equity base reduces insolvency risk, supporting long-term financing flexibility and steadier capital allocation.

High operating cash flow relative to earnings

An operating cash flow to net income ratio of 4.03 indicates high cash generation quality versus reported profits. This durable cash-generation ability supports working capital and operations, improving financial resilience even if free cash flow is temporarily negative due to investment timing.

Negative Factors

Negative free cash flow in 2025

Negative free cash flow in 2025 is a persistent operational concern: it limits internal funding for capex, dividends or deleveraging and may force external financing. Over a multi-month horizon this constrains strategic flexibility and increases vulnerability to cash-cycle shocks.

Volatile and declining revenues since 2023 peak

Revenue volatility and a decline from the 2023 peak reduce predictability of earnings and investment planning. For a specialty chemicals firm, this suggests exposure to cyclical end-markets or demand concentration, creating lasting pressure on utilization, pricing leverage and long-term growth visibility.

Low return on equity despite recovery

ROE of 4.92%—while an improvement—remains low, indicating modest ability to convert equity into attractive returns. Recovering from negative levels highlights recent weakness and implies limited long-term shareholder value creation unless operational gains sustain and scale materially.

Kanto Denka Kogyo Co., Ltd. Business Overview & Revenue Model

Company Description

Kanto Denka Kogyo Co., Ltd. manufactures and sells various chemical products in Japan and internationally. It operates through Fundamental Chemicals and Fine Chemicals divisions. The Fundamental Chemicals division offers inorganic products, including caustic soda, hydrochloric acid, sodium hypochlorite, aluminum chloride, etc. that are used in the manufacture of pulp and paper, bar soap/detergent, various chemicals, aluminum electrolytic capacitors, and pharmaceutical and agricultural intermediates; for the treatment of water and metal surfaces; and as food additives, sterilizer, bleach and an oxidizing agent, and catalyst for the friedel–crafts reaction. This division also provides organic products comprising trichloroethylene, perchloroethylene, vinylidene chloride, and cyclohexanol for use in the cleaning of metal parts; production of hydrofluorocarbon, pharmaceutical and agricultural intermediates, fire-resistant fibers, resins for food wraps and packages, organic solvents, and various organic products; reproduction of catalysts for oil refining; and dry cleaning. The Fine Chemicals division offers ferrochemicals, such as reprographics carriers, magnetite, etc. that are used in printers, and reprographics and environmentally friendly carriers. This division also provides fluorochemcials, such as sulfur hexafluoride, carbon tetrafluoride, trifluoromethane, hexafluoroethane, nitrogen trifluoride, octafluoropropane, tungsten hexafluoride, silicon tetrafluoride, chlorine trifluoride, octafluorocyclobutane, hexafluoro-1, 3-butadiene, iodine pentafluoride, and lithium hexafluorophosphate for use in semiconductors, liquid crystals and liquid crystal displays, rechargeable batteries, optical fibers, and high capacity transformers. In addition, the company offers lithium tetrafluoroborate and hexafluorophosphate for use in lithium-ion rechargeable battery electrolytes and additives. Kanto Denka Kogyo Co., Ltd. was founded in 1938 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Kanto Denka Kogyo generates revenue through the production and sale of specialty chemicals and materials to various industries. The company's key revenue streams include the sale of its core products, which are often used in electronics manufacturing, automotive parts, and construction materials. Additionally, the company may engage in long-term contracts or partnerships with major industrial players, allowing for consistent revenue through bulk sales and customized solutions. Factors contributing to its earnings include the demand for high-performance materials, advancements in technology that require innovative chemical solutions, and the company's commitment to research and development, which enables it to stay competitive in the specialty chemicals market.

Kanto Denka Kogyo Co., Ltd. Financial Statement Overview

Summary

Profitability improved in 2025 (net margin turned positive to 5.21% and EBIT/EBITDA margins improved), and leverage is moderate (debt-to-equity 0.57) with a solid equity ratio (53.34%). However, revenue has been volatile and free cash flow was negative in 2025, indicating ongoing stability and liquidity-management risks.

Income Statement

The income statement shows a volatile revenue trend, with a decrease from 2023 to 2025 after a peak in 2023. The gross profit margin in 2025 was 22.44%, which is relatively strong, although net profit margin improved significantly to 5.21% in 2025 from a negative position in 2024. The EBIT and EBITDA margins improved in 2025, indicating better operational efficiency.

Balance Sheet

The company's debt-to-equity ratio in 2025 was 0.57, showing moderate leverage. Return on equity improved to 4.92%, recovering from negative in 2024. The equity ratio was 53.34%, indicating a strong equity base. However, fluctuations in total assets suggest some instability.

Cash Flow

The company experienced a negative free cash flow in 2025, indicating challenges in covering capital expenditures. The operating cash flow to net income ratio was 4.03, showing strong cash generation relative to net income. The high volatility in free cash flow growth rates suggests potential liquidity management issues.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	62.05B	62.35B	64.77B	78.67B	62.29B	51.93B
Gross Profit	13.60B	13.99B	7.17B	22.57B	19.86B	13.56B
EBITDA	12.34B	13.71B	3.65B	21.44B	18.15B	12.15B
Net Income	2.61B	3.25B	-4.61B	9.38B	7.76B	3.60B
Balance Sheet
Total Assets	123.35B	123.62B	125.30B	130.76B	109.90B	92.32B
Cash, Cash Equivalents and Short-Term Investments	17.79B	20.29B	25.41B	22.36B	26.73B	23.68B
Total Debt	36.16B	37.88B	41.68B	37.79B	30.91B	26.96B
Total Liabilities	56.60B	55.99B	59.72B	61.99B	50.00B	39.90B
Stockholders Equity	65.11B	65.96B	64.01B	67.48B	58.25B	50.98B
Cash Flow
Free Cash Flow	0.00	-2.45B	242.00M	-8.51B	270.00M	2.38B
Operating Cash Flow	0.00	13.09B	11.21B	7.29B	11.18B	11.98B
Investing Cash Flow	0.00	-14.08B	-10.55B	-16.63B	-11.12B	-9.87B
Financing Cash Flow	0.00	-4.72B	1.78B	4.42B	2.42B	4.35B

Kanto Denka Kogyo Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1105.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4047, the sentiment is Positive. The current price of 1105 is below the 20-day moving average (MA) of 1509.45, below the 50-day MA of 1308.40, and above the 200-day MA of 1009.58, indicating a bullish trend. The MACD of 133.75 indicates Negative momentum. The RSI at 71.14 is Negative, neither overbought nor oversold. The STOCH value of 71.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4047.

Kanto Denka Kogyo Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4187	80 Outperform	¥104.79B	14.05	10.57%	1.74%	15.12%	40.72%
4633	77 Outperform	¥134.02B	11.39	―	3.72%	5.40%	14.80%
4116	76 Outperform	¥90.80B	12.64	―	3.04%	1.57%	-33.97%
4956	76 Outperform	¥90.44B	11.01	―	3.02%	1.66%	11.28%
4369	74 Outperform	¥123.33B	21.42	―	1.30%	47.56%	49.58%
4047	64 Neutral	¥101.39B	32.66	―	1.60%	1.20%	―
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%

Kanto Denka Kogyo Co., Ltd. Corporate Events

Kanto Denka Kogyo Holds Profits Steady Amid Factory Fire and Mixed Demand

Kanto Denka Kogyo reported net sales of ¥46.7 billion and operating profit of ¥2.6 billion for the first three quarters of the fiscal year ending March 31, 2026, both essentially flat year on year. Profit attributable to owners of the parent slipped to ¥1.7 billion, with basic earnings per share declining to ¥30.04, while ordinary profit rose 13.9% to ¥3.5 billion on higher foreign exchange gains.

Stronger demand from semiconductor manufacturers lifted specialty gas sales, but overall revenue was capped by disruption from a fire at the Shibukawa Factory and the absence of last year’s technology support fees for battery materials. Operating profit held steady as increased earnings in fundamental chemicals, higher specialty gas revenue, and reduced inventory valuation losses offset the fire’s impact, lower battery-related fees, and rising fixed costs, highlighting both the company’s operational resilience and its exposure to production and customer-mix risks.

The most recent analyst rating on (JP:4047) stock is a Hold with a Yen1366.00 price target. To see the full list of analyst forecasts on Kanto Denka Kogyo Co., Ltd. stock, see the JP:4047 Stock Forecast page.

Kanto Denka Kogyo Lifts Full-Year Earnings Forecast on Strong Fine Chemicals Sales

Kanto Denka Kogyo revised its consolidated earnings forecast for the fiscal year ending March 31, 2026, projecting higher net sales and profits than previously announced. The company now expects net sales of ¥66.5 billion, operating profit of ¥4.5 billion, ordinary profit of ¥5.3 billion, and profit attributable to owners of the parent of ¥2.7 billion, all above its November guidance.

The upgrade reflects stronger-than-expected performance in fine chemicals, which is driving both revenue and operating income higher. Additionally, increased foreign exchange gains are seen lifting ordinary profit and bottom-line results, signaling improved profitability and a more favorable operating environment for stakeholders compared with earlier expectations.

The most recent analyst rating on (JP:4047) stock is a Hold with a Yen1366.00 price target. To see the full list of analyst forecasts on Kanto Denka Kogyo Co., Ltd. stock, see the JP:4047 Stock Forecast page.

Kanto Denka Kogyo Lifts Outlook as Sales Stabilize, Profit Mix Shifts

Kanto Denka Kogyo reported consolidated net sales of ¥46.7 billion for the nine months ended December 31, 2025, essentially flat year on year, with operating profit steady at ¥2.6 billion and ordinary profit up 13.9%. Profit attributable to owners of the parent fell 7.8% and earnings per share slipped to ¥30.04, but total assets and equity both increased, keeping the equity ratio around 53%.

The company maintained its dividend stance, paying an interim ¥9 per share and forecasting a full-year ¥18 payout, unchanged in guidance. It also upwardly revised its full-year sales and profit outlooks, projecting 6.7% revenue growth and a 17.6% rise in ordinary profit, even as full-year net profit is expected to decline 16.9%, signaling a focus on operational improvement amid earnings pressure.

The most recent analyst rating on (JP:4047) stock is a Hold with a Yen1366.00 price target. To see the full list of analyst forecasts on Kanto Denka Kogyo Co., Ltd. stock, see the JP:4047 Stock Forecast page.

Kanto Denka Restores Full Nitrogen Trifluoride Output at Shibukawa Plant After Fatal Fire

Kanto Denka Kogyo Co., Ltd., a TSE Prime-listed chemical manufacturer known for specialty gases such as nitrogen trifluoride used in advanced industrial and electronics applications, operates key production facilities including its Shibukawa Plant in Gunma Prefecture. The company announced that, following a fatal fire at its Shibukawa Plant in August 2025 that left one employee dead and another injured, full nitrogen trifluoride production has now effectively been restored: the undamaged Facility 1 restarted in September 2025, and the previously damaged facility resumed operations on January 6, 2026, with shipments to follow shortly. Management emphasized that it has completed equipment restoration, implemented safety measures, secured approval from relevant authorities, and will reinforce accident-prevention and safety practices, moves that should stabilize supply for customers and help rebuild confidence among local communities and stakeholders.

The most recent analyst rating on (JP:4047) stock is a Hold with a Yen974.00 price target. To see the full list of analyst forecasts on Kanto Denka Kogyo Co., Ltd. stock, see the JP:4047 Stock Forecast page.