Denka Co (4061) AI Stock Analysis

• Market Cap: €170.74B
• Dividend Yield: 5.27%
• Average Volume (3M): 443.68K
• Price to Earnings (P/E): 15.3
• Beta (1Y): 0.71
• Revenue Growth: 2.82%
• EPS Growth: -202.97%
• Country: JP
• Employees: 6,514
• Sector: Industrials
• Sector Strength: 90
• Industry: Chemicals
• EPS (TTM): -172.65
• Shares Outstanding: 88,555,840
• 10 Day Avg. Volume: 393,950
• 30 Day Avg. Volume: 443,680
• PEG Ratio: 0.61
• Price to Book (P/B): 0.55
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: €2,575.31
• Price Target Upside: 29.35% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 61 Neutral
• Price Target: ¥2,102.00 ▲(5.58%Upside)

Denka Co's overall stock score is driven by financial performance challenges, particularly in profitability and cash flow management, despite some stability in the balance sheet. Technical indicators suggest neutral momentum, while the valuation reflects concerns due to negative earnings, partially offset by a high dividend yield.

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 shows solid operational margins and a stable balance sheet, but faces challenges with profitability and cash flow. The income statement indicates stable profitability, though with declining net profit margins. The balance sheet reflects a strong equity position but reduced ROE, and the cash flow statement highlights significant liquidity issues.

Income Statement

Denka Co's income statement reveals stable profitability with a TTM gross profit margin of 21.15% and net profit margin of 2.75%. The revenue growth has been inconsistent, showing a slight decline in the most recent TTM compared to the previous year. The EBIT and EBITDA margins are healthy at 3.18% and 11.06% respectively, indicating good operational efficiency. However, the net profit margin has declined over the years, reflecting reduced profitability.

Balance Sheet

Denka Co maintains a strong equity position with an equity ratio of 45.94% in the TTM. The debt-to-equity ratio is 0.70, suggesting moderate leverage. However, the return on equity (ROE) has reduced to 3.61% in the TTM, indicating less effective use of equity to generate profits compared to previous years. The balance sheet reflects a stable financial structure, though declining profitability is a concern.

Cash Flow

Denka Co's cash flow performance is weak, with operating cash flow and free cash flow reported as zero in the TTM, indicating potential cash management issues. Historically, the free cash flow growth has been negative, and the lack of operating cash flow in the latest period raises concerns about liquidity and operational sustainability. The company must address these cash flow issues to improve financial health.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
398.02B	389.26B	407.56B	384.85B	354.39B	380.80B
	Gross Profit
84.19B	82.50B	102.34B	107.17B	100.19B	99.34B
	EBIT
12.64B	13.38B	32.32B	40.12B	34.73B	31.59B
	EBITDA
44.00B	43.09B	59.37B	64.01B	57.64B	54.07B
	Net Income Common Stockholders
10.94B	11.95B	12.77B	26.01B	22.79B	22.70B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
43.63B	35.39B	20.20B	20.21B	25.91B	29.17B
	Total Assets
660.11B	616.24B	592.15B	557.64B	526.03B	501.44B
	Total Debt
211.77B	174.37B	169.73B	137.03B	138.19B	134.34B
	Net Debt
168.14B	138.98B	149.53B	116.82B	112.28B	105.17B
	Total Liabilities
340.52B	299.33B	291.80B	265.55B	255.99B	247.43B
	Stockholders Equity
303.36B	307.54B	296.48B	288.47B	267.45B	250.72B
Cash Flow		Free Cash Flow
0.00	-8.42B	-30.89B	4.68B	3.12B	8.12B
	Operating Cash Flow
0.00	36.26B	8.95B	42.63B	40.61B	41.95B
	Investing Cash Flow
0.00	-22.57B	-28.27B	-36.84B	-36.98B	-36.30B
	Financing Cash Flow
0.00	712.00M	18.36B	-12.34B	-6.71B	9.54B

Denka Co Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1991.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4061, the sentiment is Negative. The current price of 1991 is below the 20-day moving average (MA) of 2012.65, above the 50-day MA of 1978.95, and below the 200-day MA of 2076.49, indicating a neutral trend. The MACD of 8.06 indicates Positive momentum. The RSI at 49.00 is Neutral, neither overbought nor oversold. The STOCH value of 20.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4061.

Denka Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	66 Neutral	$4.49B	12.34	5.40%	248.65%	4.13%	-12.33%
4061	61 Neutral	€170.74B	15.29	-4.17%	5.27%	2.82%	-202.97%
KURRF		$4.03B	28.06	2.92%	2.81%	―	―
NP7		€1.24B	11.84	6.49%	4.79%	―	―
SOMMF		$3.79B	17.78	3.96%	2.16%	―	―
TOSCF		$4.52B	11.87	7.04%	4.61%	―	―
4114	74 Outperform	¥252.93B	14.32		6.99%	4.42%	61.99%

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.

Denka Co. Announces Sale of Ofuna Plant Land for Strategic Portfolio Transformation

Denka Company Limited has announced the sale of its non-current assets, specifically the land of its Ofuna Plant in Kamakura-shi, Kanagawa, as part of its portfolio transformation under the ‘Mission 2030’ management plan. The sale, which is expected to generate an extraordinary profit of approximately 8 billion yen, aims to improve capital efficiency. The company will continue to operate the plant by leasing the land until March 2026, ensuring no immediate disruption to its manufacturing operations. This strategic move is not anticipated to affect the company’s consolidated financial results for the fiscal year ending March 31, 2025, but the profit from the sale will be recorded in the fiscal year ending March 31, 2026.