Sakai Chemical Industry Co., Ltd. (4078) AI Stock Analysis

• Market Cap: ¥65.80B
• Dividend Yield: 4.37%
• Average Volume (3M): 59.20K
• Price to Earnings (P/E): 15.8
• Beta (1Y): 0.91
• Revenue Growth: -1.09%
• EPS Growth: N/A
• Country: JP
• Employees: 1,999
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 0.23
• Shares Outstanding: 16,000,000
• 10 Day Avg. Volume: 59,470
• 30 Day Avg. Volume: 59,203
• PEG Ratio: -0.05
• Price to Book (P/B): 0.56
• Price to Sales (P/S): 0.52
• P/FCF Ratio: 8.69
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 340.8
• Revenue Forecast (FY): ¥80.30B

• Rating: 70 Outperform
• Price Target: ¥4,433.00 ▲(39.40% Upside)
• Action: Reiterated Date: 02/25/26
• Date: Action: Reiterated 02/25/26

The score is driven primarily by improved profitability and especially strong cash flow generation, supported by a solid, low-leverage balance sheet. Technicals show strong upside momentum, but overbought readings (high RSI/Stoch) raise near-term downside risk. Valuation is supportive with a moderate P/E and a healthy dividend yield.

Positive Factors

Cash Generation

Substantial free cash flow and strong operating cash conversion provide durable internal funding for capex, dividends and working capital. This reduces dependence on external financing, enhances resilience to cyclical downturns and supports strategic investments over the next several quarters.

Balance Sheet Strength

Low financial leverage and a conservative capital structure give the company flexibility to absorb shocks and pursue selective investments or M&A without stressing liquidity. This structural strength supports sustained operations and creditworthiness across cycles.

Improved Profitability

Recovery in margins and net income points to better pricing, cost control or product mix, improving earnings durability. Sustained mid-single-digit EBIT and double-digit EBITDA margins support reinvestment and shareholder distributions even if top-line growth remains modest.

Negative Factors

Modest Revenue Growth

Limited top-line expansion constrains the company’s ability to scale profits over time. In mature end-markets for TiO2 and inorganic pigments, slow organic growth increases reliance on margin improvement and operational efficiency to drive earnings, restricting long-term upside.

Profitability Volatility

Historical swings in net income suggest exposure to volatile raw material/energy costs or cyclical end-market demand. Such volatility undermines predictability for capital allocation, dividend policy and long-range planning, complicating sustainable growth initiatives.

Conservative Capital Use

A high equity ratio indicates a very conservative funding mix that may limit return on equity and signal underused borrowing capacity. Over time this could restrict faster capacity expansion or modernization versus peers who deploy modest leverage to accelerate growth.

Sakai Chemical Industry Co., Ltd. Business Overview & Revenue Model

Company Description

Sakai Chemical Industry Co., Ltd. provides various chemical products in Japan. It offers titanium dioxide used in a range of applications, including paints, printer inks, paper manufacturing, plastics, chemical fibers, rubbers, and porcelain enamel, as well as in optical glasses and capacitors; and barium and strontium products used in compound form in electronic materials, paints, inks, plastics, glasses, and cosmetics. The company also provides zinc products, including zinc oxide used in various applications, such as rubber and paints, plastics, electronic materials, and cosmetics, as well as zinc dust used in anticorrosive paints; and plastic additives, such as stabilizers, lubricants, light stabilizers, and flame retardants used in pipes, joints, electrical wires, atypical extrusions, industrial films, flexible plastic films, and wall papers. In addition, the company offers catalysts comprising De-NOx catalysts/De-DXN catalysts, hydrogenation catalysts, ozone decomposition catalysts, polyester polymerization catalysts, and photo catalysts; electronic materials consisting of dielectric ceramics and piezoelectric ceramics; and pharmaceuticals, including prescription and OTC drugs, health foods, active pharmaceutical ingredients, and pharmaceutical intermediates. Additionally, the company provides organic chemical products for use in electronics, resin materials, healthcare, lubricants, and water treatment materials sectors; and road marking materials used for various traffic restrictions, guides, information, warnings, and assistance. Sakai Chemical Industry Co., Ltd. was founded in 1918 and is headquartered in Sakai, Japan.

How the Company Makes Money

Sakai Chemical Industry Co., Ltd. generates revenue through the manufacturing and sale of its chemical products across multiple sectors. The company has key revenue streams from its industrial chemicals, which are utilized in manufacturing processes, and specialty chemicals used in electronics and automotive industries. Additionally, Sakai Chemical may engage in partnerships and collaborations with other firms to develop new products or improve existing ones, which can also contribute to its earnings. The company’s emphasis on research and development allows it to innovate and create value-added products that meet market demands, ultimately enhancing its profitability.

Sakai Chemical Industry Co., Ltd. Financial Statement Overview

Summary

Profitability rebounded (net income 5,014M yen; EBIT margin 7.22%; EBITDA margin 11.56%) and cash generation is strong (free cash flow 5,057M yen, +77.9%; operating cash flow to net income 2.39). Balance sheet leverage is low (debt-to-equity 0.28) but prior net income volatility and modest revenue growth (2.8%) temper the score.

Income Statement

Sakai Chemical Industry Co., Ltd. shows a strong recovery in profitability with a net income of 5,014 million yen and a gross profit margin of 24.02%. The revenue growth rate is modest at 2.8%, indicating stable sales. The EBIT margin has significantly improved from the previous year, rising to 7.22%, while the EBITDA margin stands at 11.56%. Despite the positive trends, the volatility in net income observed in prior years poses a potential risk.

Balance Sheet

The company's financial leverage is moderate with a debt-to-equity ratio of 0.28, which is a positive indicator of financial health. Return on Equity has improved significantly to 6.4%, reflecting better profitability for shareholders. However, the equity ratio remains relatively high at 63.5%, suggesting a conservative capital structure but potentially underutilized leverage in growth initiatives.

Cash Flow

The cash flow situation is robust, with a substantial increase in free cash flow to 5,057 million yen, representing a growth rate of 77.9%. The operating cash flow to net income ratio is strong at 2.39, indicating efficient cash generation from operations. While free cash flow to net income ratio at 1.01 suggests effective conversion of profits into cash, the company has significantly improved its cash flow management.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	82.68B	84.41B	82.11B	83.86B	80.14B	84.92B
Gross Profit	20.62B	20.28B	16.86B	18.48B	21.05B	17.22B
EBITDA	9.71B	9.76B	767.00M	9.61B	13.76B	2.43B
Net Income	4.87B	5.01B	-7.09B	2.34B	6.75B	-2.80B
Balance Sheet
Total Assets	123.36B	123.32B	125.44B	128.02B	123.92B	123.01B
Cash, Cash Equivalents and Short-Term Investments	16.39B	16.18B	16.59B	12.41B	10.80B	11.09B
Total Debt	22.98B	21.92B	27.04B	21.64B	16.96B	20.44B
Total Liabilities	45.67B	43.93B	49.98B	43.31B	41.21B	43.74B
Stockholders Equity	76.64B	78.29B	74.39B	80.49B	78.85B	75.80B
Cash Flow
Free Cash Flow	0.00	5.06B	2.84B	-1.89B	1.50B	-1.74B
Operating Cash Flow	0.00	12.01B	6.87B	773.00M	6.57B	7.83B
Investing Cash Flow	0.00	-5.71B	-3.96B	-2.62B	-1.65B	-7.42B
Financing Cash Flow	0.00	-6.88B	1.26B	3.28B	-5.65B	1.67B

Sakai Chemical Industry Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3180.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4078, the sentiment is Positive. The current price of 3180 is below the 20-day moving average (MA) of 3629.50, below the 50-day MA of 3407.00, and above the 200-day MA of 2942.40, indicating a bullish trend. The MACD of 168.39 indicates Negative momentum. The RSI at 82.86 is Negative, neither overbought nor oversold. The STOCH value of 94.37 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4078.

Sakai Chemical Industry Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4187	80 Outperform	¥104.79B	14.05	10.57%	1.74%	15.12%	40.72%
4362	75 Outperform	¥62.08B	13.67	―	2.92%	3.03%	28.27%
4109	73 Outperform	¥70.54B	25.81	6.31%	4.01%	6.38%	22.81%
4008	70 Outperform	¥98.75B	23.17	―	3.74%	-0.68%	-9.93%
4078	70 Outperform	¥65.80B	15.82	―	4.37%	-1.09%	―
4410	66 Neutral	¥26.45B	13.86	―	4.62%	7.19%	―
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%

Sakai Chemical Industry Co., Ltd. Corporate Events

Sakai Chemical Launches Special Career Transition Program as Part of Structural Reforms

Sakai Chemical Industry will introduce a Special Career Transition Support Program as part of its broader structural reforms to build a higher-profit business structure aligned with its BEYOND 2030 plan. The initiative is framed as support for employees’ career development while enabling the company to advance portfolio restructuring and financial performance goals.

The program targets up to 30 regular and rehired employees aged 50 or over with at least 20 years of service, offering special retirement allowances and optional outplacement services, with employment generally ending June 30, 2026. The company expects about ¥350 million in related costs, to be recorded as an extraordinary loss for the fiscal year ending March 31, 2026, with final financial impact to be disclosed once participation figures are confirmed.

The most recent analyst rating on (JP:4078) stock is a Buy with a Yen4183.00 price target. To see the full list of analyst forecasts on Sakai Chemical Industry Co., Ltd. stock, see the JP:4078 Stock Forecast page.

Sakai Chemical Books ¥2.4bn Impairment but Lifts Dividend Forecast

Sakai Chemical Industry will book an extraordinary impairment loss of ¥2.433 billion in the third quarter of the fiscal year ending March 31, 2026, mainly from cosmetic ingredient manufacturing facilities whose profitability has worsened amid a slowdown in the Chinese economy. This write-down in the Cosmetic Materials segment reduces the book value of certain assets and underscores heightened earnings pressure in that business line.

While net sales, operating profit and ordinary profit forecasts for the full year remain unchanged at ¥86 billion, ¥6.5 billion and ¥6.5 billion respectively, profit attributable to owners of parent has been cut by 45.5% to ¥3 billion, lowering projected earnings per share to ¥191.20. Despite the profit downgrade, the company, following its “Transformation: BEYOND 2030” policy of stable shareholder returns, has raised its year-end dividend forecast from ¥65 to ¥80 per share, signaling confidence in the stable performance of non-cosmetics segments and its commitment to a 3% DOE target.

The most recent analyst rating on (JP:4078) stock is a Buy with a Yen3973.00 price target. To see the full list of analyst forecasts on Sakai Chemical Industry Co., Ltd. stock, see the JP:4078 Stock Forecast page.

Sakai Chemical Lifts Dividend as Profit Falls Despite Stronger Margins

Sakai Chemical reported consolidated net sales of ¥61.37 billion for the quarter ended December 2025, down 3.5% year on year, while operating profit rose 14.7% to ¥5.37 billion and ordinary profit increased 10.2% to ¥5.48 billion. Profit attributable to owners of the parent fell 22.2% to ¥2.9 billion, but the company’s financial position remained solid with total assets of ¥117.4 billion, a capital adequacy ratio of 65.6%, higher net assets per share, and an increased interim dividend of ¥65 per share versus ¥62.5 a year earlier.

Despite the decline in sales and bottom-line profit, the improvement in profitability ratios and capital structure suggests Sakai Chemical is tightening operations and preserving balance sheet strength. The higher dividend signals management’s confidence in cash generation and a willingness to return value to shareholders, potentially supporting investor sentiment even as earnings per share decline.

The most recent analyst rating on (JP:4078) stock is a Buy with a Yen3973.00 price target. To see the full list of analyst forecasts on Sakai Chemical Industry Co., Ltd. stock, see the JP:4078 Stock Forecast page.

Sakai Chemical to Cancel 1 Million Treasury Shares, Shrinking Share Float by Nearly 6%

Sakai Chemical Industry Co., Ltd. has resolved at its board meeting on December 23, 2025 to cancel 1,000,000 of its common treasury shares, equivalent to 5.88% of its issued shares prior to cancellation, under Article 178 of the Companies Act. The cancellation, which includes shares repurchased via ToSTNeT-3 and on the Tokyo Stock Exchange between May 15 and November 30, 2025, is scheduled for January 30, 2026 and will reduce the company’s total shares outstanding to 16,000,000 and leave 688,751 treasury shares, effectively tightening its share float and potentially enhancing capital efficiency and shareholder value.

The most recent analyst rating on (JP:4078) stock is a Buy with a Yen3099.00 price target. To see the full list of analyst forecasts on Sakai Chemical Industry Co., Ltd. stock, see the JP:4078 Stock Forecast page.

Sakai Chemical Completes Share Buyback and Plans Cancellation

Sakai Chemical Industry Co., Ltd. has completed the acquisition of its own shares, purchasing a total of 914,000 shares at a cost of approximately 2.5 billion yen. This strategic move, resolved by the Board of Directors, aims to enhance shareholder value and involves plans to cancel all acquired treasury shares, potentially impacting the company’s stock market positioning and shareholder equity.

The most recent analyst rating on (JP:4078) stock is a Buy with a Yen3099.00 price target. To see the full list of analyst forecasts on Sakai Chemical Industry Co., Ltd. stock, see the JP:4078 Stock Forecast page.