Denka Co (4061) AI Stock Analysis

• Market Cap: €195.28B
• Dividend Yield: 4.37%
• Average Volume (3M): 424.75K
• Price to Earnings (P/E): 15.3
• Beta (1Y): 0.72
• Revenue Growth: 0.61%
• EPS Growth: -180.24%
• Country: JP
• Employees: 6,514
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals
• EPS (TTM): 58.04
• 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: €3,050.58
• Price Target Upside: 34.62% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 59 Neutral
• Price Target: ¥2,389.00 ▲(5.43% Upside)

Denka Co's overall stock score is primarily influenced by financial performance challenges, including negative net income and cash flow issues. Technical analysis provides mixed signals with slight short-term bullish momentum, while valuation metrics suggest caution due to a negative P/E ratio. The dividend yield offers some appeal, but overall, the stock faces significant financial hurdles.

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. The balance sheet is relatively stable with a manageable debt-to-equity ratio, but the negative return on equity and cash flow issues need addressing.

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	59.37B	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: Neutral
• Last Price: 2266.00
• 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:4061, the sentiment is Neutral. The current price of 2266 is below the 20-day moving average (MA) of 2290.56, above the 50-day MA of 2235.55, and above the 200-day MA of 2058.24, indicating a neutral trend. The MACD of 6.97 indicates Positive momentum. The RSI at 49.62 is Neutral, neither overbought nor oversold. The STOCH value of 49.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4061.

Denka Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4272	75 Outperform	¥218.71B	12.23	7.16%	4.87%	8.14%	274.53%
4042	68 Neutral	$706.90B	14.65	6.04%	4.50%	3.71%	-19.97%
4114	66 Neutral	¥280.30B	15.98	―	5.75%	1.44%	58.90%
4005	65 Neutral	$745.37B	76.93	0.92%	2.64%	0.98%	―
3405	62 Neutral	$537.30B	35.28	2.06%	3.25%	0.55%	-69.21%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
4061	59 Neutral	€195.28B	15.29	-3.41%	4.37%	0.61%	-180.24%

Denka Co Corporate Events

Denka Co. Halts U.S. Rubber Production Amid Regulatory Changes

Denka Co., Ltd has announced the suspension of production at its U.S. subsidiary, Denka Performance Elastomer LLC, due to new environmental regulations on chemical emissions. Despite a two-year extension on the regulatory grace period, the company is maintaining its production halt, focusing on safely decommissioning equipment and managing existing inventory to minimize costs.

Denka Co. Reports Mixed Financial Results for Early Fiscal Year 2026

Denka Co., Ltd. reported a decrease in net sales and operating income for the first three months of the fiscal year ending March 31, 2026, compared to the same period last year. Despite the decline in sales and income, the company experienced a significant increase in net income attributable to owners of the parent, driven by strategic financial management, which could impact its market positioning positively.