Denka Co (4061) AI Stock Analysis

• Market Cap: €171.21B
• Dividend Yield: 5.04%
• Average Volume (3M): 488.18K
• Price to Earnings (P/E): 15.3
• Beta (1Y): 0.72
• Revenue Growth: 2.82%
• EPS Growth: -202.98%
• Country: JP
• Employees: 6,514
• Sector: Industrials
• Sector Strength: 87
• Industry: Chemicals
• EPS (TTM): -172.65
• Shares Outstanding: 88,555,840
• 10 Day Avg. Volume: 549,470
• 30 Day Avg. Volume: 488,183
• PEG Ratio: -0.36
• Price to Book (P/B): 0.80
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -7.63
• 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: €2,576.27
• Price Target Upside: 27.44% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 54 Neutral
• Price Target: ¥2,006.00 ▼(-0.77%Downside)

The overall stock score is primarily impacted by financial performance challenges, including negative net income and deteriorating cash flow. Technical indicators show neutral momentum without clear direction, and the company's negative P/E ratio and high dividend yield reflect valuation concerns. The lack of earnings call data and corporate events means these factors do not influence the score.

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 Co., Ltd. derives its revenue primarily through the production and sale of its diversified chemical products across various sectors. The company's revenue streams include the sale of electronics materials, which are used in semiconductor and display industries, and life sciences and environment products, including pharmaceuticals and diagnostic reagents. Denka's elastomers and performance plastics division supplies materials used in the automotive and industrial sectors. Additionally, the infrastructure and social solutions division generates income through the provision of cement and special cement additives for construction and civil engineering applications. Strategic partnerships and investments in research and development further bolster Denka's earnings by enabling innovation and expansion into new markets.

Denka Co Financial Statement Overview

Summary

Denka Co faces profitability and cash flow challenges, with negative net income and deteriorating free cash flow. The balance sheet shows a manageable debt-to-equity ratio but a negative return on equity. Improvements in operational efficiency and liquidity are needed to enhance financial stability.

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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	398.02B	400.25B	389.26B	407.56B	384.85B	354.39B
Gross Profit	84.19B	84.60B	82.50B	102.34B	107.17B	100.19B
EBITDA	44.00B	12.87B	43.09B	59.37B	64.01B	57.64B
Net Income	10.94B	-12.30B	11.95B	12.77B	26.01B	22.79B
Balance Sheet
Total Assets	660.11B	655.52B	616.24B	592.15B	557.64B	526.03B
Cash, Cash Equivalents and Short-Term Investments	43.63B	37.00B	35.39B	20.20B	20.21B	25.91B
Total Debt	211.77B	217.68B	174.37B	169.73B	137.03B	138.19B
Total Liabilities	340.52B	347.23B	299.33B	291.80B	265.55B	255.99B
Stockholders Equity	303.36B	296.18B	307.54B	296.48B	288.47B	267.45B
Cash Flow
Free Cash Flow	0.00	-40.13B	-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	-52.63B	-22.57B	-28.27B	-36.84B	-36.98B
Financing Cash Flow	0.00	33.16B	712.00M	18.36B	-12.34B	-6.71B

Denka Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2021.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• 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 2021.5 is above the 20-day moving average (MA) of 1950.20, above the 50-day MA of 1966.41, and below the 200-day MA of 2060.71, indicating a neutral trend. The MACD of -2.16 indicates Negative momentum. The RSI at 60.88 is Neutral, neither overbought nor oversold. The STOCH value of 88.51 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
Sector *	65 Neutral	$10.65B	15.52	5.51%	1.92%	2.72%	-26.34%
4061	54 Neutral	€171.21B	15.29	-4.17%	5.04%	2.82%	-202.98%
KURRF		$4.13B	28.57	2.92%	2.75%	―	―
NP7		€1.22B	11.45	6.49%	5.74%	―	―
SOMMF		$3.97B	17.78	3.96%	0.02%	―	―
TOSCF		$4.69B	12.28	7.04%	0.03%	―	―
4114	71 Outperform	¥255.18B	14.45		6.56%	4.42%	61.92%

Denka Co Corporate Events

Denka Records Extraordinary Loss and Suspends U.S. Chloroprene Rubber Production

Denka Company Limited has announced an extraordinary loss of approximately 16.1 billion yen due to an impairment loss at its U.S. subsidiary, Denka Performance Elastomer LLC (DPE). This loss is attributed to rising operational costs, staffing challenges, and declining production volumes at DPE’s chloroprene rubber manufacturing facilities. Consequently, DPE has suspended production indefinitely, considering all options for the business, including a potential sale. Despite these challenges, Denka will maintain its dividend forecast for the fiscal year ended March 31, 2025.

The most recent analyst rating on (JP:4061) stock is a Buy with a Yen3040.00 price target. To see the full list of analyst forecasts on Denka Co stock, see the JP:4061 Stock Forecast page.

Denka Co. Reports Significant Loss and Suspends Chloroprene Rubber Production

Denka Co., Ltd has announced an extraordinary loss of approximately 16.1 billion yen for the fiscal year ended March 31, 2025, due to an impairment loss at its subsidiary, Denka Performance Elastomer LLC (DPE). The company has indefinitely suspended production at DPE’s chloroprene rubber manufacturing facilities, citing rising costs, staffing challenges, and the impact of the global economic environment on the chloroprene rubber market. This decision reflects the operational and financial pressures faced by Denka, as it navigates supply chain disruptions, increased energy costs, and regulatory challenges related to pollution control.

The most recent analyst rating on (JP:4061) stock is a Buy with a Yen3040.00 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 FY2025 Financial Results with Strategic Outlook for Recovery

Denka Co. Ltd. reported its consolidated financial results for the fiscal year ended March 31, 2025, showing a 2.8% increase in net sales to ¥400,251 million, despite a net loss attributable to owners of the parent of ¥12,300 million. The company’s financial position saw a decrease in net assets and equity ratio, reflecting challenges in maintaining profitability. The forecast for the next fiscal year anticipates a recovery with a projected 2.4% increase in net sales and significant improvements in operating and ordinary income, suggesting a strategic focus on enhancing operational efficiency and market competitiveness.

The most recent analyst rating on (JP:4061) stock is a Buy with a Yen3040.00 price target. To see the full list of analyst forecasts on Denka Co stock, see the JP:4061 Stock Forecast page.