Shin-Etsu Chemical Co (4063) AI Stock Analysis

• Market Cap: $11.99T
• Dividend Yield: 2.17%
• Average Volume (3M): 5.66M
• Price to Earnings (P/E): 18.0
• Beta (1Y): 1.05
• Revenue Growth: 3.77%
• EPS Growth: 0.35%
• Country: JP
• Employees: 27,274
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals
• EPS (TTM): N/A
• Shares Outstanding: 1,984,995,800
• 10 Day Avg. Volume: 5,966,100
• 30 Day Avg. Volume: 5,664,786
• PEG Ratio: 4.03
• Price to Book (P/B): 1.80
• Price to Sales (P/S): 3.28
• P/FCF Ratio: 18.97
• Enterprise Value/Market Cap: 0.86
• Enterprise Value/Revenue: 4.01
• Enterprise Value/Gross Profit: 11.38
• Enterprise Value/Ebitda: 10.47
• 1Y Price Target: $6,029.01
• Price Target Upside: -0.72% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 84 Outperform
• Price Target: ¥7,489.00 ▲(23.32% Upside)
• Action: Reiterated Date: 03/13/26
• Date: Action: Reiterated 03/13/26

The score is driven primarily by strong financial performance (high margins, very low leverage, and solid cash flow generation), supported by a favorable technical uptrend with positive momentum indicators. Valuation is reasonable but not especially cheap, and the dividend yield is modest.

Positive Factors

High Profitability Margins

Sustained high net and EBIT margins reflect durable pricing power and operational efficiency across both specialty and commodity segments. These margins provide a buffer against input-cost swings and support reinvestment, enhancing long-term cash returns and competitive resilience.

Very Low Leverage

Extremely low debt and a high equity ratio give Shin-Etsu strong financial flexibility to fund capex, weather cyclical downturns, and pursue strategic investments without stressing cash flows. This balance-sheet strength reduces insolvency risk and supports long-term stability.

Robust Cash Generation

Consistent free cash flow growth and operating cash generation above reported earnings indicate high cash conversion. Reliable FCF supports capital expenditure for advanced materials and wafer capacity, funds shareholder returns, and enables resilient investment through cycles.

Negative Factors

EPS Contraction

A recent decline in EPS signals pressure on per-share profitability despite strong margins. Persistent EPS contraction can constrain retained earnings growth and may reflect mix shifts, cyclical demand impacts, or margin compression risks that could limit long-term capital allocation flexibility.

Exposure to Energy-Intensive PVC Chain

Significant exposure to chlor-alkali and PVC chains ties part of revenue and margins to volatile energy and raw-material prices. Structural energy cost sensitivity can erode returns over multi-month horizons and requires ongoing cost management or pricing pass-through to sustain profitability.

Semiconductor Cycle Sensitivity

A meaningful portion of revenue comes from silicon wafers and electronic materials, which are subject to semiconductor capex and utilization cycles. Structural demand volatility in semiconductors can cause multi-quarter swings in volumes and capital intensity, pressuring near-term revenue stability.

Shin-Etsu Chemical Co Business Overview & Revenue Model

Company Description

Shin-Etsu Chemical Co., Ltd. engages in the polyvinyl chloride (PVC)/chlor-alkali, semiconductor silicon, silicones, electronics and functional materials, specialty chemicals, processing, and trading and specialized businesses worldwide. The company operates through Infrastructure Materials; Electronics Materials; Functional Materials; and Processing and Specialized Services segments. It offers PVC- framed windows; electric, hybrid, and fuel cell vehicles; wind power generators, air conditioners, aircrafts, industrial motors, semiconductor silicon used in semiconductors for robots; and cellulose derivative products. The company also offers pipes for water supply and sewerage systems; caustic soda; polyvinyl alcohol; photoresists photomasks blanks; encapsulant materials; rare earth magnets; silicon wafers, LED packaging materials, and synthetic quartz; pellicles; SOLBIN, a copolymer resin; anode material of batteries; and input devices, wafer cases, and wrapping films. The company was formerly known as Shin-Etsu Nitrogen Fertilizer Co., Ltd. and changed its name to Shin-Etsu Chemical Co., Ltd. in 1940. The company was incorporated in 1926 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Shin-Etsu makes money primarily by manufacturing and selling specialty and commodity chemical products and electronic materials to industrial customers worldwide. Key revenue streams typically include: 1) PVC / chlor-alkali-related products: Revenue is generated from sales of PVC resin and related products used in construction materials (e.g., pipes, profiles) and other industrial applications. This business is influenced by demand in construction and infrastructure and by energy/raw-material costs (because chlor-alkali and vinyl chains are energy-intensive). 2) Silicone materials: The company sells silicone polymers and formulated silicone products used for sealants, adhesives, coatings, thermal interface materials, automotive components, electronics, and healthcare-related uses. Earnings are driven by volume and mix (higher-value specialty grades vs. more standard grades) and by demand in automotive and electronics. 3) Semiconductor silicon (silicon wafers): Shin-Etsu supplies silicon wafers used by semiconductor device manufacturers. Revenue depends on wafer demand (unit volumes), wafer specifications (diameter, process generation, and quality requirements), and industry utilization/capacity cycles. 4) Electronic materials (e.g., photoresists and related materials): The company sells materials used in semiconductor lithography and other advanced electronics manufacturing processes. Revenue is tied to semiconductor fabrication activity and to the company’s ability to supply high-performance, tightly specified materials. 5) Other functional materials: The company sells a range of other specialty materials used in industrial and consumer applications, contributing additional diversified revenue. Across these businesses, profitability is supported by (a) scale manufacturing and process know-how, (b) product mix skewed toward higher-value specialty materials in silicones and electronics-related segments, and (c) long-term supply relationships with major global manufacturers in semiconductors and industrial markets. Specific partnership details and customer names are not provided here (null) because they are not available in the prompt.

Shin-Etsu Chemical Co Financial Statement Overview

Summary

Strong overall financials supported by solid profitability (net margin 20.85%, EBIT margin 28.97%), very conservative leverage (debt-to-equity 0.004; equity ratio 82.72%), and healthy cash generation (operating cash flow to net income 1.65; free cash flow growth 17.15%).

Income Statement

Shin-Etsu Chemical Co demonstrates strong income statement performance with consistent revenue growth and high profitability margins. From 2024 to 2025, the company achieved a revenue growth rate of 6.07%, and its net profit margin increased to 20.85%, indicating robust profitability. The EBIT margin and EBITDA margin are also strong at 28.97% and 41.56% respectively, showcasing operational efficiency and effective cost management.

Balance Sheet

The balance sheet of Shin-Etsu Chemical Co reflects a solid financial position with a low debt-to-equity ratio of 0.004 and a high equity ratio of 82.72%. The company's return on equity stands at 11.45%, highlighting effective utilization of equity to generate profits. Overall, the company's low leverage and high equity provide financial stability and reduce risk exposure.

Cash Flow

Shin-Etsu Chemical Co's cash flow performance is commendable with a free cash flow growth rate of 17.15% from 2024 to 2025. The operating cash flow to net income ratio of 1.65 indicates strong cash generation relative to earnings, and the free cash flow to net income ratio of 0.83 reinforces the company's efficient cash management. Overall, the cash flow situation supports sustainability and future investment capabilities.

Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	2.57T	2.56T	2.41T	2.81T	2.07T	1.50T
Gross Profit	904.21B	984.12B	911.21B	1.21T	868.00B	543.70B
EBITDA	982.90B	1.06T	1.02T	1.21T	865.91B	547.34B
Net Income	485.80B	534.02B	520.14B	708.24B	500.12B	293.73B
Balance Sheet
Total Assets	5.45T	5.64T	5.15T	4.73T	4.05T	3.38T
Cash, Cash Equivalents and Short-Term Investments	1.50T	1.81T	1.72T	1.60T	1.44T	1.15T
Total Debt	243.43B	33.90B	41.19B	47.09B	38.95B	34.45B
Total Liabilities	961.58B	799.01B	723.90B	704.18B	624.20B	493.99B
Stockholders Equity	4.32T	4.66T	4.26T	3.87T	3.33T	2.82T
Cash Flow
Free Cash Flow	159.20B	442.46B	380.77B	492.50B	357.75B	164.98B
Operating Cash Flow	451.50B	881.93B	755.18B	788.01B	553.53B	401.18B
Investing Cash Flow	-402.60B	-142.55B	-1.10T	-186.49B	-253.72B	-250.72B
Financing Cash Flow	-409.00B	-454.90B	-369.47B	-423.56B	-122.50B	-91.12B

Shin-Etsu Chemical Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6073.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4063, the sentiment is Positive. The current price of 6073 is below the 20-day moving average (MA) of 6176.90, above the 50-day MA of 5709.24, and above the 200-day MA of 4916.57, indicating a bullish trend. The MACD of 249.11 indicates Negative momentum. The RSI at 57.72 is Neutral, neither overbought nor oversold. The STOCH value of 76.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4063.

Shin-Etsu Chemical Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4063	84 Outperform	$11.99T	18.04	11.19%	2.17%	3.77%	0.35%
3407	68 Neutral	¥2.00T	8.67	8.29%	2.89%	3.55%	95.65%
4005	62 Neutral	¥751.59B	3.83	8.79%	2.68%	-1.64%	―
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
4061	60 Neutral	¥274.90B	36.21	-4.00%	3.71%	0.24%	-234.36%
4004	58 Neutral	¥1.89T	40.66	4.42%	1.00%	-1.90%	-71.97%
4188	54 Neutral	¥1.15T	-66.09	1.09%	3.50%	-11.50%	25.86%