Denka Co (4061) AI Stock Analysis

• Market Cap: €192.39B
• Dividend Yield: 4.41%
• Average Volume (3M): 424.75K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.72
• Revenue Growth: 0.24%
• EPS Growth: -234.36%
• Country: JP
• Employees: 6,514
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals
• EPS (TTM): -12.76
• Shares Outstanding: 88,555,840
• 10 Day Avg. Volume: 419,400
• 30 Day Avg. Volume: 424,753
• PEG Ratio: 0.07
• Price to Book (P/B): 0.62
• Price to Sales (P/S): 0.46
• P/FCF Ratio: -4.47
• 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: €2,795.80
• Price Target Upside: 5.68% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: ¥2,886.00 ▲(9.09% Upside)

Denka Co's stock score is primarily influenced by its strong technical momentum, despite financial challenges. The stock's bullish trend is a significant positive, but valuation concerns due to negative earnings and cash flow issues weigh on the overall score. The dividend yield offers some compensation for the risks associated with the company's current financial performance.

Positive Factors

Diverse Revenue Streams

Denka's diverse revenue streams across chemicals, pharmaceuticals, and electronics provide resilience against sector-specific downturns, supporting long-term stability.

High-Value-Added Products

By focusing on high-value-added products, Denka enhances its profit margins and positions itself in growing markets like electronics and healthcare, supporting sustainable growth.

Stable Balance Sheet

A manageable debt-to-equity ratio indicates financial stability, allowing Denka to invest in growth opportunities without excessive leverage risk.

Negative Factors

Negative Cash Flow

Negative free cash flow highlights liquidity issues, limiting Denka's ability to reinvest in its business and potentially impacting long-term growth.

Declining Profitability

Declining profitability, with negative net income and reduced margins, undermines Denka's ability to generate shareholder value and invest in future growth.

Negative Return on Equity

Negative return on equity signals inefficiencies in generating returns from shareholders' investments, impacting long-term investor confidence and capital raising.

Denka Co Business Overview & Revenue Model

Company Description

Denka Company Limited manufactures and sells organic and inorganic materials to electronic materials and pharmaceuticals in Japan and internationally. The company's Electronics & Innovative Products division provides conductive agents for lithium for lithium-ion batteries, thermal materials and substrates, functional ceramics, films, and tapes. Its Life Innovation division supplies influenza vaccines; manufactures rapid diagnostic testing kits for detecting antigens of infectious diseases, such as the novel coronavirus; and delivers macromolecular sodium hyaluronate preparations. The company's Elastomers & Infrastructure Solutions division include functional elastomers, cement and special cement additives, fertilizers, agricultural corrugated pipes. Its Polymer Solutions division consist of styrene-based resins, food packaging sheets, and synthetic fiber for wigs and hairpieces, as well as poval and other chemical products. The company was formerly known as Denki Kagaku Kogyo Kabushiki Kaisha and changed its name to Denka Company Limited in October 2015. Denka Company Limited was incorporated in 1915 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Denka generates revenue through multiple key streams, primarily by manufacturing and selling chemical products, including elastomers, resins, and specialty chemicals. The company serves various industries, which allows it to leverage diverse market demands. Denka also focuses on high-value-added products, such as those used in electronics and healthcare, which typically yield higher profit margins. Strategic partnerships with other companies in the chemical and technology sectors enhance its product offerings and market reach. Additionally, Denka's commitment to research and development helps it innovate and introduce new products that meet emerging market needs, further contributing to its revenue growth.

Denka Co Financial Statement Overview

Summary

Denka Co faces challenges in profitability and cash flow management, with negative net income and deteriorating free cash flow. While the balance sheet remains relatively stable with a manageable debt-to-equity ratio, the negative return on equity and cash flow issues need addressing to enhance financial stability and shareholder value.

Income Statement

Denka Co's revenue showed a slight decline in the past year with a -1.8% growth rate. The gross profit margin for 2025 is 21.1%, indicating moderate profitability. However, a significant concern is the negative net income in 2025, resulting in a negative net profit margin. The EBIT margin is 3.6%, reflecting a decline in operational efficiency compared to previous years. Overall, the income statement reflects challenges in maintaining profitability amidst revenue fluctuations.

Balance Sheet

The company's balance sheet reveals a debt-to-equity ratio of 0.74, which is manageable but indicates a certain level of leverage. The return on equity has turned negative due to net losses, posing concerns about shareholder returns. The equity ratio is 45.2%, suggesting a stable capital structure with a fair balance of equity and liabilities. Despite some stability in the equity ratio, the recent financial performance has impacted overall equity returns.

Cash Flow

Denka Co's cash flow statement shows negative free cash flow, which has deteriorated significantly from the previous year. The operating cash flow to net income ratio is negative due to the net loss, indicating challenges in converting profits into cash. The free cash flow to net income ratio further highlights cash flow issues. Overall, the cash flow statement raises concerns about liquidity and cash management.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	399.09B	400.25B	389.26B	407.56B	384.85B	354.39B
Gross Profit	82.56B	84.59B	82.50B	102.34B	107.17B	100.19B
EBITDA	45.68B	12.87B	43.09B	42.79B	59.44B	52.78B
Net Income	-9.55B	-12.30B	11.95B	12.77B	26.01B	22.79B
Balance Sheet
Total Assets	650.89B	655.52B	616.24B	592.15B	557.64B	526.03B
Cash, Cash Equivalents and Short-Term Investments	42.55B	37.00B	35.39B	20.20B	20.21B	25.91B
Total Debt	222.64B	217.68B	174.37B	169.73B	137.03B	138.19B
Total Liabilities	339.72B	347.22B	299.33B	291.80B	265.55B	255.99B
Stockholders Equity	293.44B	296.18B	307.54B	296.48B	288.47B	267.45B
Cash Flow
Free Cash Flow	0.00	-41.21B	-8.42B	-30.89B	4.68B	3.12B
Operating Cash Flow	0.00	18.62B	36.26B	8.95B	42.63B	40.61B
Investing Cash Flow	0.00	-59.59B	-22.57B	-28.27B	-36.84B	-36.98B
Financing Cash Flow	0.00	40.12B	712.00M	18.36B	-12.34B	-6.71B

Denka Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2645.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4061, the sentiment is Positive. The current price of 2645.5 is above the 20-day moving average (MA) of 2447.62, above the 50-day MA of 2352.60, and above the 200-day MA of 2105.71, indicating a bullish trend. The MACD of 93.69 indicates Negative momentum. The RSI at 66.28 is Neutral, neither overbought nor oversold. The STOCH value of 82.18 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4061.

Denka Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4272	73 Outperform	€222.18B	12.42	8.79%	4.46%	6.60%	503.36%
4042	71 Outperform	$715.65B	17.71	4.79%	4.55%	-1.21%	-27.21%
4005	69 Neutral	¥760.59B	8.97	8.79%	2.64%	-1.64%	―
4061	64 Neutral	€192.39B	-20.15	-4.00%	4.41%	0.24%	-234.36%
4114	63 Neutral	¥275.26B	15.69	―	5.84%	-0.47%	25.41%
3405	62 Neutral	¥467.82B	60.35	1.08%	3.54%	-1.94%	-84.08%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%

Denka Co Corporate Events

Denka Records Extraordinary Loss Amid Strategic Adjustments

Denka Company Limited announced an extraordinary loss of 9,415 million yen for the first half of the fiscal year ending March 2026, primarily due to the decision not to restart production at its U.S.-based subsidiary’s chloroprene rubber manufacturing facilities. This loss is expected to be offset by extraordinary gains from asset sales, as reflected in the company’s financial forecasts for the fiscal year.

The most recent analyst rating on (JP:4061) stock is a Hold with a Yen2308.00 price target. To see the full list of analyst forecasts on Denka Co stock, see the JP:4061 Stock Forecast page.

Denka Exceeds Financial Forecasts for First Half of Fiscal Year

Denka Company Limited reported that its actual financial results for the first half of the fiscal year ending March 2026 surpassed its initial forecasts. The company experienced higher than expected sales volumes in its Electronics & Innovative Products Division, leading to significant increases in operating income, ordinary income, and net income attributable to owners of the parent.

The most recent analyst rating on (JP:4061) stock is a Hold with a Yen2308.00 price target. To see the full list of analyst forecasts on Denka Co stock, see the JP:4061 Stock Forecast page.

Denka Co. Suspends Production at U.S. Subsidiary, Shifts Operations

Denka Co., Ltd has announced the suspension of production at its U.S. subsidiary, Denka Performance Elastomer LLC, which manufactures chloroprene rubber. The company is actively working on safely decommissioning its manufacturing facilities by removing hazardous materials and is in discussions with stakeholders to minimize future costs. The transition to using products from the Denka Omi Plant for former DPE product users has been completed, and nearly all inventory has been shipped, indicating a strategic shift in operations.

The most recent analyst rating on (JP:4061) stock is a Hold with a Yen2308.00 price target. To see the full list of analyst forecasts on Denka Co stock, see the JP:4061 Stock Forecast page.

Denka Co., Ltd. Reports Improved Profitability Amid Slight Sales Decline

Denka Co., Ltd. reported its consolidated financial results for the first six months of the fiscal year ending March 31, 2026, showing a slight decline in net sales by 1.2% compared to the previous year. Despite this, the company experienced a significant increase in ordinary income by 21.8% and net income attributable to owners by 15.7%, indicating improved profitability. The company revised its earnings forecast for the full fiscal year, expecting a substantial increase in operating income and ordinary income, which suggests a positive outlook for stakeholders.

The most recent analyst rating on (JP:4061) stock is a Hold with a Yen2308.00 price target. To see the full list of analyst forecasts on Denka Co stock, see the JP:4061 Stock Forecast page.