Denka Co Ltd (JP:4061)
:4061
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Denka Co
(4061)
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Rating:59Neutral
Price Target:
¥4,448.00
▲(61.89% Upside)
Action:Reiterated
Date:05/15/26
The score is held back mainly by weak cash generation (negative free cash flow in most recent years) and uneven, cyclical profitability despite a 2026 rebound. Offsetting this, technicals are notably strong with the stock trading above key moving averages and positive momentum indicators, while valuation is fair but not particularly cheap given the P/E and modest dividend yield.
Positive Factors
Diversified specialty product portfolio & recurring contracts
Denka’s mix of standardized chemicals and differentiated advanced/electronic materials plus long-term supply relationships creates structural customer stickiness and recurring revenue. Over 2–6 months this supports more stable order books, pricing leverage for specialty products, and a durable revenue base versus commodity-only peers.
Negative Factors
Persistent negative free cash flow
Repeated negative free cash flow and large outflows in recent years reflect heavy capex or weak cash conversion and reduce internal funding for dividends, debt paydown or strategic investment. This persistent shortfall can force external financing and constrain strategic optionality over the next several months.
Read all positive and negative factors
Positive Factors
Negative Factors
Diversified specialty product portfolio & recurring contracts
Denka’s mix of standardized chemicals and differentiated advanced/electronic materials plus long-term supply relationships creates structural customer stickiness and recurring revenue. Over 2–6 months this supports more stable order books, pricing leverage for specialty products, and a durable revenue base versus commodity-only peers.
Read all positive factors
Denka Co (4061) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥333.33B
Dividend Yield3.71%
Average Volume (3M)424.75K
Price to Earnings (P/E)7.5
Beta (1Y)0.86
Revenue Growth-4.00%
EPS GrowthN/A
CountryJP
Employees6,514
SectorBasic Materials
Sector Strength58
IndustryChemicals
Share Statistics
EPS (TTM)-110.82
Shares Outstanding88,555,840
10 Day Avg. Volume419,400
30 Day Avg. Volume424,753
Financial Highlights & Ratios
PEG Ratio-0.09
Price to Book (P/B)0.98
Price to Sales (P/S)0.79
P/FCF Ratio-9.81
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)230.87
Revenue Forecast (FY)¥419.54B
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 ...
How the Company Makes Money
Denka primarily makes money by manufacturing and selling chemical and materials products to business customers. Its revenue model is largely product-sales driven: (1) selling volumes of standardized and specialty chemical products (including polym...
Denka Co Financial Statement Overview
Summary
Income Statement
56
Neutral
Balance Sheet
63
Positive
Cash Flow
38
Negative
| Breakdown | TTM | Mar 2026 | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 399.09B | 384.25B | 400.25B | 389.26B | 407.56B | 384.85B |
| Gross Profit | 82.56B | 94.26B | 87.04B | 84.98B | 104.59B | 109.46B |
| EBITDA | 40.24B | 55.39B | 42.27B | 40.30B | 59.37B | 64.01B |
| Net Income | -9.55B | 15.70B | -12.30B | 11.95B | 12.77B | 26.01B |
Balance Sheet | ||||||
| Total Assets | 650.89B | 681.01B | 655.52B | 616.24B | 592.16B | 557.65B |
| Cash, Cash Equivalents and Short-Term Investments | 42.55B | 35.27B | 37.00B | 35.39B | 20.20B | 20.21B |
| Total Debt | 222.64B | 221.71B | 221.88B | 178.03B | 172.68B | 139.43B |
| Total Liabilities | 339.72B | 342.18B | 347.23B | 299.33B | 291.81B | 265.55B |
| Stockholders Equity | 293.44B | 310.71B | 296.18B | 307.54B | 296.48B | 288.47B |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | -31.01B | -40.13B | -7.59B | -29.86B | 5.28B |
| Operating Cash Flow | 0.00 | 36.15B | 18.62B | 36.26B | 8.95B | 42.63B |
| Investing Cash Flow | 0.00 | -30.81B | -52.63B | -17.33B | -28.27B | -36.84B |
| Financing Cash Flow | 0.00 | -6.61B | 33.16B | -4.53B | 18.36B | -12.34B |
Denka Co Technical Analysis
Neutral
2747.50
Price Trends
3733.22
Positive
3378.49
Positive
2833.67
Positive
Market Momentum
39.85
Positive
47.72
Neutral
23.48
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 2747.5 is below the 20-day moving average (MA) of 4024.75, below the 50-day MA of 3733.22, and below the 200-day MA of 2833.67, indicating a neutral trend. The MACD of 39.85 indicates Positive momentum. The RSI at 47.72 is Neutral, neither overbought nor oversold. The STOCH value of 23.48 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | ¥13.88T | 32.22 | 11.19% | 2.17% | 0.50% | -6.23% | |
64 Neutral | ¥827.66B | 17.47 | 4.79% | 4.21% | -4.09% | -27.31% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
61 Neutral | ¥959.22B | 13.44 | 8.79% | 2.68% | -10.66% | 57.43% | |
61 Neutral | ¥301.95B | 20.24 | ― | 5.28% | -2.31% | -1.17% | |
59 Neutral | ¥333.33B | 7.49 | -4.00% | 3.71% | -4.00% | ― | |
53 Neutral | ¥1.36T | 104.16 | 1.09% | 3.50% | -15.96% | -74.31% |
* Basic Materials Sector Average
JP:4061
Denka Co
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Denka Co Corporate Events
Denka Books Large Extraordinary Items on U.S. Elastomer Exit and Toyo Styrene Deal
May 13, 2026
Denka Company Limited has booked significant extraordinary items for the fiscal year ended March 31, 2026, chiefly a ¥21.1 billion loss on liquidation of business tied to Denka Performance Elastomer LLC’s decision not to restart its U.S...
Denka Ramps Up SNECTON Capacities to Capture AI-Related Materials Demand
May 13, 2026
Denka is advancing its position in electronic materials for AI-related hardware by expanding its SNECTON product line, a low-dielectric organic insulation resin designed to reduce transmission loss while maintaining processability. The company rep...
Denka Swings Back to Profit as Earnings Surge Despite Lower Sales
May 13, 2026
Denka Co. reported fiscal 2026 consolidated net sales of ¥384.2 billion, down 4.0% year on year, but operating profit surged 82.0% to ¥26.2 billion and ordinary profit more than doubled, lifting profit attributable to owners of parent to...
Denka Secures Majority Stake in KAINOS Laboratories Through Tender Offer
Mar 26, 2026
Denka Company Limited and its wholly owned subsidiary Flowers Co., Ltd. have completed a tender offer to acquire common shares of KAINOS Laboratories, Inc., a diagnostics-related company listed on the Standard Market of the Tokyo Stock Exchange. T...
Denka Books ¥12.6 Billion Extraordinary Gain From Unwinding Cross-Shareholdings
Mar 26, 2026
Denka Company Limited has realized extraordinary gains from the sale of 13 issues of listed and unlisted investment securities held by the company and its subsidiaries. The disposals, conducted between April 1, 2025 and March 25, 2026, generated g...
Denka to Take Full Control of Toyo Styrene as Consolidated Subsidiary
Mar 9, 2026
Denka will acquire Daicel Corporation’s 15% stake in Toyo Styrene, turning the joint venture polystyrene producer into a consolidated, specified subsidiary as it exits the co-investment and shutters Toyo Styrene’s Hirohata Plant. For a...
Denka Amends KAINOS Tender Offer Filing After Antitrust Clearance
Mar 5, 2026
Denka and its wholly owned subsidiary Flowers have launched a tender offer for the common shares of KAINOS Laboratories, Inc., a company listed on the Standard Market of the Tokyo Stock Exchange. Following notifications from the Fair Trade Commiss...
Denka Weighs 2027 Spin-off of Styrene Business to Sharpen Portfolio
Feb 27, 2026
Denka has begun formally reviewing a potential spin-off of its styrene-related businesses within the Polymer Solutions Division, targeting completion around April 2027, as part of its Mission 2030 portfolio transformation. The move reflects mounti...
Denka Revamps Mission 2030 Plan to Rebuild Earnings and Enter New Growth Phase
Feb 27, 2026
Denka has updated its Mission 2030 management plan with a Phase 2 program covering fiscal years 2026 to 2028, following an expected recovery to ¥25 billion in operating income and at least 5% ROE in fiscal 2025. The revised plan targets rebui...
Denka pivots “Mission 2030” to earnings rebuild with Phase 2 plan
Feb 27, 2026
Denka has launched Phase 2 of its “Mission 2030” management plan for fiscal years 2026 to 2028, after Phase 1 was hit by slumping demand for electronic materials, weak U.S. chloroprene rubber performance and slower-than-expected paybac...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.