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

• Market Cap: ¥285.18B
• Dividend Yield: 5.36%
• Average Volume (3M): 832.80K
• Price to Earnings (P/E): 18.0
• Beta (1Y): 0.61
• 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: ¥2,101.00 ▲(10.52% 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 strong balance sheet with low leverage provides financial stability and flexibility, allowing the company to invest in growth opportunities and weather economic downturns.

Cash Flow Generation

Robust cash flow generation supports ongoing operations and strategic investments, enhancing the company's ability to sustain and grow its business over time.

Operational Efficiency

Stable margins indicate efficient operations, suggesting the company effectively manages costs and maintains profitability despite revenue challenges.

Negative Factors

Revenue Decline

Declining revenue growth may signal challenges in market demand or competitive pressures, potentially impacting long-term growth prospects if not addressed.

Limited Free Cash Flow

Limited free cash flow relative to earnings could constrain the company's ability to reinvest in the business or return capital to shareholders, affecting future growth.

Modest Profitability

Modest profitability may limit the company's ability to generate high returns on shareholder investments, potentially affecting investor confidence and stock performance.

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 strengths in profitability margins and low leverage. However, challenges in revenue growth and free cash flow generation are notable. The balance sheet is robust, but the income statement and cash flow statement highlight areas needing strategic focus for growth and liquidity.

Income Statement

Nippon Shokubai Co., Ltd. shows a mixed performance in its income statement. The TTM data indicates a slight decline in revenue growth, with a negative growth rate of -0.94%. However, the company maintains a stable gross profit margin of approximately 17.2% and a net profit margin of 4.2%. The EBIT and EBITDA margins are also stable, indicating operational efficiency. The revenue growth has been inconsistent, with fluctuations over the years, which could pose a risk to future profitability.

Balance Sheet

The balance sheet of Nippon Shokubai Co., Ltd. reflects a strong equity position with a debt-to-equity ratio of 0.11, indicating low leverage. The return on equity is modest at 4.5%, suggesting moderate profitability from shareholders' investments. The equity ratio is healthy, showing that a significant portion of the company's assets is financed by equity. Overall, the balance sheet indicates financial stability with manageable debt levels.

Cash Flow

The cash flow statement reveals challenges in free cash flow growth, with a significant decline of -68.1% in the TTM period. The operating cash flow to net income ratio is 0.44, indicating that operating cash flow adequately covers net income. However, the free cash flow to net income ratio is lower at 0.28, suggesting limited free cash flow generation relative to net income. The cash flow position requires attention to ensure sustainable liquidity.

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: Negative
• RSI: Neutral
• STOCH: Negative

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 above the 20-day moving average (MA) of 1879.30, above the 50-day MA of 1831.96, and above the 200-day MA of 1721.26, indicating a bullish trend. The MACD of 26.23 indicates Negative momentum. The RSI at 69.01 is Neutral, neither overbought nor oversold. The STOCH value of 82.23 is Negative, 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
4368	76 Outperform	¥224.15B	17.39	―	1.22%	8.80%	33.39%
4041	74 Outperform	¥200.18B	12.74	―	4.14%	1.69%	0.94%
4045	74 Outperform	¥181.30B	19.02	4.41%	3.81%	-1.50%	-32.46%
4272	73 Outperform	¥266.66B	11.54	8.79%	4.03%	6.60%	503.36%
4114	71 Outperform	¥285.18B	18.01	―	5.36%	-0.47%	25.41%
4061	64 Neutral	¥228.93B	-19.65	-4.00%	3.73%	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.

Nippon Shokubai Announces Treasury Stock Cancellation

Nippon Shokubai Co., Ltd. has announced the cancellation of 6,000,000 shares of its treasury stock, which constitutes 3.85% of its total issued shares before cancellation. This move, scheduled for completion on November 28, 2025, is expected to impact the company’s share structure, reducing the number of issued shares to 150,000,000 and potentially enhancing shareholder value by decreasing the supply of shares in the market.

Nippon Shokubai Completes Treasury Stock Purchase

Nippon Shokubai Co., Ltd. has completed the purchase of 983,600 shares of its own common stock, amounting to a total cost of 1,781,253,200 yen. This action is part of a broader resolution by the Board of Directors to acquire up to 5,000,000 shares, with a total budget of 7 billion yen, as a strategic move to enhance shareholder value and optimize capital structure.