Nihon Kagaku Sangyo Co., Ltd. (4094) AI Stock Analysis

• Market Cap: ¥53.38B
• Dividend Yield: 3.77%
• Average Volume (3M): 19.74K
• Price to Earnings (P/E): 21.1
• Beta (1Y): 0.51
• Revenue Growth: 8.54%
• EPS Growth: 6.93%
• Country: JP
• Employees: 448
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 40.35
• Shares Outstanding: 20,280,000
• 10 Day Avg. Volume: 14,430
• 30 Day Avg. Volume: 19,740
• PEG Ratio: 0.35
• Price to Book (P/B): 0.65
• Price to Sales (P/S): 1.18
• P/FCF Ratio: 17.70
• 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): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: ¥2,916.00 ▲(18.39% Upside)
• Action: Reiterated Date: 10/30/25
• Date: Action: Reiterated 10/30/25

Nihon Kagaku Sangyo Co., Ltd. demonstrates strong financial performance with robust revenue growth and profitability, supported by a solid balance sheet. The technical analysis indicates some bearish trends, but the valuation is fair with an attractive dividend yield. The absence of earnings call data and corporate events does not impact the overall assessment significantly.

Positive Factors

Very strong balance sheet / minimal leverage

Extremely low leverage and a high equity ratio provide durable financial resilience, lowering default and refinancing risk. This structural strength supports countercyclical capital allocation (capex, dividends, M&A) and preserves strategic optionality across 2-6 months and longer.

Sustained revenue growth and healthy margins

Double-digit top-line expansion coupled with mid-20s gross margins and near-10% net margins indicate persistent pricing power and efficient cost control versus peers. These structural profitability metrics support reinvestment capacity and margin resilience over the medium term.

Consistent operating cash generation

Operating cash conversion above 1.0 signals durable cash generation from core operations, funding operations and distributions without relying on debt. Even with slightly lower free cash flow, strong OCF sustains investment and shareholder returns across multi-month horizons.

Negative Factors

Free cash flow decline

A decline in free cash flow growth constrains discretionary spending on capex, R&D, or higher dividends. Over several months this can pressure reinvestment plans and limit flexibility for strategic initiatives if the trend persists despite solid operating cash flow.

Modest return on equity

While the balance sheet is strong, a mid-single-digit ROE points to modest returns on equity capital. Over time this can limit shareholder value creation relative to higher-return peers and suggests potential under-deployment of capital or slower profit leverage.

Limited scale within specialty chemicals

A relatively small workforce and focused specialty-chemicals footprint may restrict economies of scale, R&D depth and geographic diversification. Structurally, this can reduce bargaining power with large customers and limit ability to absorb input-cost shocks over the medium term.

Nihon Kagaku Sangyo Co., Ltd. Business Overview & Revenue Model

Company Description

Nihon Kagaku Sangyo Co., Ltd. produces and sells industrial chemicals and building materials in Japan and internationally. It offers various inorganic metal products, including copper, tin, nickel, cobalt, bismuth, chromium, manganese, antimony, zinc, iron, and lithium compounds, as well as other products; organic metal compounds, such as metal acetylacetonate complex, metallic soap, PUCAT, and PA series products; surface treatment agents, including anodized aluminum treatment, electro plating, electro plating brightener/additives, electroless plating, etchant agent, and rust prevention; and other compounds. The company's chemical products are used in various applications, such as plastics, textiles, paints and inks, and electronics, as well as in cutting-edge industries, including optical communications, and secondary and fuel cell batteries. It also develops fireproof, waterproof, and ventilation construction materials; and Cool Fin heat exchangers, as well as offers stainless-steel handrails and mailboxes; fabricated metal products for industrial use; and materials used in roof eaves. The company was incorporated in 1924 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Nihon Kagaku Sangyo generates revenue through the sale of its chemical products and solutions to various industries. The company has established key revenue streams by partnering with major players in sectors such as electronics and automotive, where their specialty chemicals are essential for production processes. Additionally, the company invests in research and development to innovate and improve its product offerings, which helps in maintaining a competitive edge and attracting new clients. Strategic collaborations and long-term contracts with customers further contribute to stable income, while the growing demand for advanced materials in emerging technologies supports ongoing revenue growth.

Nihon Kagaku Sangyo Co., Ltd. Financial Statement Overview

Summary

Nihon Kagaku Sangyo Co., Ltd. exhibits strong financial health with impressive revenue growth and profitability margins. The balance sheet is robust, characterized by minimal leverage and a strong equity position. Cash flow performance is solid, with effective cash generation, though there is slight room for improvement in free cash flow growth. Overall, the company is well-positioned within the specialty chemicals industry, demonstrating stability and growth potential.

Income Statement

The company has demonstrated robust revenue growth with a 13.35% increase in the latest period. Gross profit margin is strong at approximately 24.15%, indicating efficient cost management. The net profit margin is commendable at 9.26%, showing good profitability. EBIT and EBITDA margins are healthy, reflecting strong operational efficiency. Overall, the income statement suggests solid growth and profitability within the industry.

Balance Sheet

The balance sheet is exceptionally strong, with a very low debt-to-equity ratio of 0.006, indicating minimal leverage. The equity ratio is high at 85.58%, suggesting a strong equity base. Return on equity is impressive at 5.07%, reflecting good shareholder returns. Overall, the balance sheet highlights stability and a strong financial position with minimal risk.

Cash Flow

Operating cash flow is consistent, with a positive operating cash flow to net income ratio of 1.40, indicating effective cash generation from operations. However, free cash flow has decreased slightly, impacting the free cash flow growth rate. The free cash flow to net income ratio of 0.72 shows good cash conversion. Overall, the cash flow statement reflects solid cash generation capabilities, albeit with some room for improvement.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	25.78B	25.44B	22.44B	24.06B	23.72B	19.64B
Gross Profit	6.18B	6.15B	5.26B	5.88B	7.19B	5.03B
EBITDA	4.23B	4.37B	3.63B	4.17B	5.50B	3.58B
Net Income	2.37B	2.36B	1.74B	2.23B	3.24B	1.84B
Balance Sheet
Total Assets	54.55B	54.30B	52.93B	50.06B	49.49B	46.34B
Cash, Cash Equivalents and Short-Term Investments	20.20B	15.42B	19.69B	18.81B	16.99B	16.17B
Total Debt	140.00M	263.80M	373.80M	373.80M	373.80M	376.00M
Total Liabilities	8.12B	7.83B	7.27B	6.70B	7.51B	6.80B
Stockholders Equity	46.43B	46.48B	45.66B	43.36B	41.97B	39.54B
Cash Flow
Free Cash Flow	0.00	1.70B	1.93B	2.41B	1.44B	2.74B
Operating Cash Flow	0.00	3.30B	3.10B	3.06B	2.76B	3.49B
Investing Cash Flow	0.00	-11.45B	-1.32B	-655.42M	-954.77M	-749.24M
Financing Cash Flow	0.00	-1.27B	-999.52M	-633.05M	-981.63M	-595.78M

Nihon Kagaku Sangyo Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2463.00
• 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:4094, the sentiment is Neutral. The current price of 2463 is below the 20-day moving average (MA) of 2659.10, below the 50-day MA of 2578.10, and above the 200-day MA of 2264.69, indicating a neutral trend. The MACD of 19.45 indicates Positive momentum. The RSI at 53.08 is Neutral, neither overbought nor oversold. The STOCH value of 42.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4094.

Nihon Kagaku Sangyo Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4095	75 Outperform	¥187.96B	13.84	―	3.50%	3.85%	-1.53%
4619	75 Outperform	¥55.28B	9.57	―	5.04%	-3.21%	27.18%
4109	73 Outperform	¥70.54B	25.81	6.31%	4.01%	6.38%	22.81%
4094	70 Outperform	¥53.38B	21.15	―	3.77%	8.54%	6.93%
4078	70 Outperform	¥65.80B	15.82	―	4.37%	-1.09%	―
4112	67 Neutral	¥39.05B	16.63	―	2.37%	-11.70%	-54.82%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%

Nihon Kagaku Sangyo Co., Ltd. Corporate Events

Nihon Kagaku Sangyo Posts Higher Nine-Month Profit and Lifts Dividend Outlook

Nihon Kagaku Sangyo reported consolidated net sales of ¥20.6 billion for the nine months ended Dec. 31, 2025, up 6.8% year on year, with operating profit rising 5.5% to ¥2.48 billion and profit attributable to owners of parent increasing 9.1% to ¥2.04 billion. Comprehensive income surged 145.3% to ¥4.48 billion, while total assets climbed to ¥58.6 billion and the equity ratio remained high at 84%, underscoring robust financial health.

The company kept its full-year forecast unchanged, projecting modest 3.0% sales growth to ¥26.2 billion but slight declines in operating and ordinary profit, signaling a cautious outlook despite solid year-to-date performance. It also plans to raise the annual dividend for the year ending March 31, 2026 to ¥90 per share from ¥75 in the prior year, highlighting continued shareholder returns backed by strong earnings and balance sheet strength.

The most recent analyst rating on (JP:4094) stock is a Hold with a Yen2958.00 price target. To see the full list of analyst forecasts on Nihon Kagaku Sangyo Co., Ltd. stock, see the JP:4094 Stock Forecast page.