Nippon Shokubai Co., Ltd. (4114) AI Stock Analysis

• Market Cap: ¥331.69B
• Dividend Yield: 5.28%
• Average Volume (3M): 832.80K
• Price to Earnings (P/E): 20.9
• Beta (1Y): 0.65
• Revenue Growth: -0.47%
• EPS Growth: 25.41%
• Country: JP
• Employees: 4,607
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals
• EPS (TTM): 21.16
• Shares Outstanding: 150,000,000
• 10 Day Avg. Volume: 672,080
• 30 Day Avg. Volume: 832,803
• PEG Ratio: 0.25
• Price to Book (P/B): 0.69
• Price to Sales (P/S): 0.65
• P/FCF Ratio: 20.38
• 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: 71 Outperform
• Price Target: ¥2,459.00 ▲(29.35% Upside)

Nippon Shokubai Co., Ltd. receives a solid score due to its stable financial performance and positive technical indicators. The company's strong balance sheet and attractive dividend yield further enhance its appeal. While revenue growth is a challenge, the overall financial health and market momentum position the stock favorably.

Positive Factors

Strong balance sheet

A very low debt-to-equity (0.11) and high equity ratio (71%) provide durable financial flexibility. This conservative capital structure lowers refinancing stress, supports capital expenditure and maintenance of continuous chemical plants, and enables counter-cyclical investments or dividends.

Leading product franchises

Nippon Shokubai's core franchises—acrylic acid/esters and superabsorbent polymers—serve stable industrial and hygiene end markets. Scale, formulation know-how and long B2B supply relationships create durable demand and barriers to entry, supporting steady volumes and pricing over time.

Improving cash generation

Significant free cash flow growth (58% TTM) and positive operating cash generation point to improving operational cash efficiency. Sustained cash inflows strengthen the company's ability to fund plant upkeep, targeted capex and shareholder returns without materially increasing leverage.

Negative Factors

Declining revenues

A negative top-line trend (-0.70% TTM) signals persistent demand headwinds or market share pressure. Continued revenue decline reduces scale economies critical to continuous chemical production, stresses fixed-cost absorption, and requires successful product or market shifts to restore sustainable growth.

Modest profitability margins

Relatively low gross (17.4%) and net (4.24%) margins reflect limited pricing power or higher cost exposure in a commodity-linked chemical business. Modest margins constrain internal reinvestment, lower returns on capital, and make earnings more sensitive to feedstock, utility, or input-cost volatility over time.

Weak FCF conversion

A free cash flow to net income ratio of 0.09 indicates earnings translate poorly into spendable cash, likely due to capex intensity or working-capital demands. Low conversion limits the firm's ability to sustainably raise dividends, self-fund growth, or absorb shocks without external financing.

Nippon Shokubai Co., Ltd. Business Overview & Revenue Model

Company Description

Nippon Shokubai Co., Ltd. is a leading chemical manufacturer based in Japan, specializing in the production of a wide range of chemical products including superabsorbent polymers, catalysts, and specialty chemicals. The company operates primarily in sectors such as agriculture, automotive, and environmental solutions, providing innovative materials that enhance product performance and sustainability. Nippon Shokubai is recognized for its commitment to research and development, enabling the continuous improvement of its core offerings and the expansion into new markets.

How the Company Makes Money

Nippon Shokubai generates revenue through the sales of its chemical products across various industries, with significant revenue streams coming from superabsorbent polymers used in hygiene products, catalysts for the production of petrochemicals, and specialty chemicals for various applications. The company's revenue model is primarily based on direct sales to manufacturers and distributors, as well as long-term contracts with key clients in the automotive and agricultural sectors. Additionally, Nippon Shokubai benefits from strategic partnerships and collaborations with other firms and research institutions, which enhances its innovation capabilities and market reach, further contributing to its earnings.

Nippon Shokubai Co., Ltd. Financial Statement Overview

Summary

Nippon Shokubai Co., Ltd. demonstrates a stable financial position with strong balance sheet metrics and moderate profitability. While the company faces challenges in revenue growth, its operational efficiency and conservative leverage provide a solid foundation. Cash flow generation is robust, although the conversion of earnings to free cash flow could be improved.

Income Statement

Nippon Shokubai Co., Ltd. shows moderate profitability with a TTM gross profit margin of 17.40% and a net profit margin of 4.24%. However, the revenue growth rate is negative at -0.70% TTM, indicating a decline in sales. The EBIT and EBITDA margins are stable at 5.36% and 13.11% respectively, suggesting efficient operations despite the revenue drop.

Balance Sheet

The company maintains a strong balance sheet with a low debt-to-equity ratio of 0.11, indicating conservative leverage. The return on equity is modest at 4.51% TTM, reflecting moderate profitability. The equity ratio stands at 71.03%, showcasing a solid capital structure with a high proportion of equity financing.

Cash Flow

Nippon Shokubai's cash flow performance is stable, with a significant free cash flow growth rate of 58.10% TTM. The operating cash flow to net income ratio is 0.43, indicating adequate cash generation relative to net income. However, the free cash flow to net income ratio is lower at 0.09, suggesting limited free cash flow relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	402.67B	409.35B	392.01B	419.57B	369.29B	273.16B
Gross Profit	71.11B	70.45B	68.00B	80.39B	77.71B	48.05B
EBITDA	53.51B	53.14B	49.74B	54.70B	59.87B	15.45B
Net Income	16.08B	17.39B	11.01B	19.39B	23.72B	-10.90B
Balance Sheet
Total Assets	535.98B	543.66B	544.06B	523.32B	518.15B	471.62B
Cash, Cash Equivalents and Short-Term Investments	54.66B	54.56B	55.13B	39.03B	39.36B	36.34B
Total Debt	43.67B	41.39B	45.61B	57.61B	59.68B	61.57B
Total Liabilities	145.95B	151.13B	151.50B	153.32B	167.03B	147.89B
Stockholders Equity	380.65B	383.03B	383.45B	362.23B	343.88B	317.37B
Cash Flow
Free Cash Flow	6.58B	13.05B	37.31B	18.36B	12.80B	3.89B
Operating Cash Flow	49.53B	46.97B	57.88B	41.45B	35.06B	35.28B
Investing Cash Flow	-43.65B	-30.51B	-15.68B	-25.98B	-23.16B	-30.62B
Financing Cash Flow	-15.98B	-16.78B	-28.36B	-17.32B	-10.75B	-12.75B

Nippon Shokubai Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1901.00
• 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:4114, the sentiment is Positive. The current price of 1901 is below the 20-day moving average (MA) of 2178.42, below the 50-day MA of 2018.03, and above the 200-day MA of 1784.00, indicating a bullish trend. The MACD of 60.09 indicates Positive momentum. The RSI at 62.11 is Neutral, neither overbought nor oversold. The STOCH value of 51.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4114.

Nippon Shokubai Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4041	74 Outperform	¥205.76B	13.10	―	4.09%	1.69%	0.94%
4368	74 Outperform	¥262.21B	20.34	―	1.23%	8.80%	33.39%
4045	74 Outperform	¥186.95B	20.53	4.41%	3.80%	-1.50%	-32.46%
4272	73 Outperform	¥283.54B	12.98	8.79%	3.97%	6.60%	503.36%
4114	71 Outperform	¥331.69B	20.94	―	5.28%	-0.47%	25.41%
4061	64 Neutral	¥255.90B	-21.44	-4.00%	3.71%	0.24%	-234.36%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%

Nippon Shokubai Co., Ltd. Corporate Events

Nippon Shokubai Reports Decline in Q2 Financial Performance

Nippon Shokubai reported a decline in its financial performance for the second quarter of the fiscal year ending March 31, 2026, with revenue and profits showing a year-on-year decrease. The company has revised its financial forecasts for the full fiscal year, indicating a cautious outlook amidst challenging market conditions, which may impact its stakeholders and industry positioning.

The most recent analyst rating on (JP:4114) stock is a Hold with a Yen1900.00 price target. To see the full list of analyst forecasts on Nippon Shokubai Co., Ltd. stock, see the JP:4114 Stock Forecast page.