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

• Market Cap: ¥376.27B
• Dividend Yield: 5.28%
• Average Volume (3M): 832.80K
• Price to Earnings (P/E): 21.5
• Beta (1Y): 0.68
• Revenue Growth: -0.47%
• EPS Growth: 25.41%
• Country: JP
• Employees: 4,607
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals
• EPS (TTM): 45.39
• 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): 105.8
• Revenue Forecast (FY): ¥405.00B

• Rating: 69 Neutral
• Price Target: ¥2,655.00 ▲(39.66% Upside)
• Action: Downgraded Date: 02/07/26
• Date: Action: Downgraded 02/07/26

The score is primarily supported by a conservative balance sheet and improving profitability versus 2024, but constrained by the sharp reported revenue decline and weak free cash flow conversion. Technicals are strong (price above major moving averages), though overbought signals add near-term risk, while valuation is helped by a high dividend yield but tempered by a mid-range P/E.

Positive Factors

Conservative balance sheet / low leverage

Low leverage and a large equity base give Nippon Shokubai durable financial flexibility. This conservatism supports funding for maintenance, cyclical downturns or selective capex without stressing liquidity, preserving strategic optionality over the next several quarters.

Leading product lines serving stable end-markets

Core exposure to superabsorbent polymers and acrylic intermediates links the company to structurally stable demand (hygiene products, coatings, adhesives). Diverse industrial and consumer B2B end-markets reduce single-market dependence and support steady long-term volumes.

Profitability improving versus prior year

Reported earnings recovery demonstrates operational resilience and margin restoration after a weaker period. Stable gross and net margins imply the business can retain profitability through cost management and product mix improvements, supporting cash generation durability.

Negative Factors

Sharp reported revenue decline

A large year-over-year revenue reset creates lasting uncertainty about demand, customer contracts and plant utilization. Lower top-line levels worsen fixed-cost absorption, can pressure margins and investment returns, and complicate medium-term planning and capacity decisions.

Weak free cash flow conversion

Low free cash flow relative to operating cash flow and income suggests high capex, working-capital drag, or one-offs. Weak FCF conversion constrains the company's ability to self-fund growth, sustain dividends, or accelerate debt reduction over multiple quarters without altering spend.

Margin sensitivity to feedstock/utility spreads

As a petrochemical-derived producer, margins depend on feedstock and utility cost spreads versus selling prices. Volatile input costs can compress margins cyclically; without structural hedges or pass-through contracts, earnings remain exposed to commodity price swings over the medium term.

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

Balance sheet strength and low leverage (TTM debt-to-equity ~0.14) support stability, and profitability has improved versus 2024 (TTM net income ¥17.7B vs ¥11.0B). Offsetting this, the latest period shows a sharp TTM revenue decline (reported growth -64.8%) and weaker cash-flow quality with low free cash flow conversion (TTM FCF ¥7.7B vs operating cash flow ¥47.9B).

Income Statement

Profitability is solid but not exceptional in the latest period. TTM (Trailing-Twelve-Months) revenue is ¥400.1B with gross margin ~18.4% and net margin ~4.4%, broadly in line with the last two annual periods but below the stronger 2022 levels (higher margins and profitability). Earnings have improved versus 2024 (net income ¥17.7B TTM vs ¥11.0B in 2024), showing recovery. The main concern is the sharp TTM revenue decline (reported growth rate -64.8%), which signals a meaningful top-line reset and adds uncertainty despite stable operating margins.

Balance Sheet

The balance sheet looks conservative and provides flexibility. TTM debt-to-equity is low at ~0.14, supported by a large equity base (¥387.7B) versus total debt of ¥53.0B. Returns are positive but modest, with TTM return on equity around ~4.2% (down from ~6.9% in 2022), indicating the company is not currently generating high returns on its capital base. Overall strength comes from low leverage and stable capitalization; the trade-off is only average capital efficiency.

Cash Flow

Cash generation is positive, but free cash flow conversion is weaker in the latest period. TTM operating cash flow is ¥47.9B, yet free cash flow is only ¥7.7B, implying higher spending needs and/or working-capital drag. Free cash flow is a relatively small share of net income in TTM (~16%), down from stronger conversion in 2024 (~64%). A positive offset is the strong reported TTM free cash flow growth, but the absolute level and conversion quality remain the key weaknesses.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	400.06B	409.35B	392.01B	419.57B	369.29B	273.16B
Gross Profit	73.80B	70.45B	68.00B	80.39B	77.71B	48.05B
EBITDA	54.65B	53.14B	49.74B	54.70B	59.87B	15.45B
Net Income	17.74B	17.39B	11.01B	19.39B	23.72B	-10.90B
Balance Sheet
Total Assets	564.71B	543.66B	544.06B	523.32B	518.15B	471.62B
Cash, Cash Equivalents and Short-Term Investments	50.71B	54.56B	55.13B	39.03B	39.36B	36.34B
Total Debt	52.97B	41.39B	45.61B	57.61B	59.68B	61.57B
Total Liabilities	167.50B	151.13B	151.50B	153.32B	167.03B	147.89B
Stockholders Equity	387.73B	383.03B	383.45B	362.23B	343.88B	317.37B
Cash Flow
Free Cash Flow	7.75B	13.05B	37.31B	18.36B	12.80B	3.89B
Operating Cash Flow	47.86B	46.97B	57.88B	41.45B	35.06B	35.28B
Investing Cash Flow	-38.51B	-30.51B	-15.68B	-25.98B	-23.16B	-30.62B
Financing Cash Flow	-20.14B	-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: Negative
• 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 below the 20-day moving average (MA) of 2430.82, below the 50-day MA of 2240.97, and above the 200-day MA of 1864.18, indicating a bullish trend. The MACD of 80.14 indicates Positive momentum. The RSI at 75.25 is Negative, neither overbought nor oversold. The STOCH value of 86.39 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
4063	75 Outperform	¥12.48T	24.10	10.87%	2.17%	3.77%	0.35%
4114	69 Neutral	¥376.27B	21.49	―	5.28%	-0.47%	25.41%
4042	68 Neutral	¥865.05B	25.35	4.79%	4.21%	-1.21%	-27.21%
4188	66 Neutral	¥1.53T	17.55	1.09%	3.50%	-11.50%	25.86%
4005	65 Neutral	¥910.58B	9.58	8.79%	2.68%	-1.64%	―
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
3405	60 Neutral	¥575.10B	78.15	1.08%	3.37%	-1.94%	-84.08%

Nippon Shokubai Co., Ltd. Corporate Events

Nippon Shokubai Holds Profit Amid Lower Sales, Keeps FY2025 Outlook Unchanged

For the nine months ended December 31, 2025, Nippon Shokubai reported revenue of ¥299.3 billion, down 3.0% year on year, while operating profit was essentially flat at ¥15.2 billion and profit attributable to owners of the parent rose 2.5% to ¥14.4 billion, helped by higher earnings per share driven in part by a reduced share count. Total assets increased to ¥564.7 billion and equity attributable to owners of the parent rose to ¥387.7 billion, though the equity ratio edged down, and the company maintained its dividend stance with a forecast annual dividend of ¥100 per share for FY2025, lower than the prior year. Full-year guidance was left unchanged, with the company expecting modest revenue contraction and declines in operating profit and net profit compared with the previous fiscal year, indicating a cautious outlook amid a challenging operating environment even as it strengthens its business base through moves such as consolidating Emulsion Technology Co., Ltd. Title: Nippon Shokubai Holds Profit Amid Lower Sales, Keeps FY2025 Outlook Unchanged

The most recent analyst rating on (JP:4114) stock is a Buy with a Yen2475.00 price target. To see the full list of analyst forecasts on Nippon Shokubai Co., Ltd. stock, see the JP:4114 Stock Forecast page.