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

• Market Cap: ¥257.04B
• Dividend Yield: 6.84%
• Average Volume (3M): 666.56K
• Price to Earnings (P/E): 14.6
• Beta (1Y): 0.65
• Revenue Growth: 5.66%
• EPS Growth: 77.87%
• Country: JP
• Employees: 4,607
• Sector: Basic Materials
• Sector Strength: 63
• Industry: Chemicals
• EPS (TTM): 22.28
• Shares Outstanding: 156,000,000
• 10 Day Avg. Volume: 770,790
• 30 Day Avg. Volume: 666,563
• PEG Ratio: 0.98
• Price to Book (P/B): 0.67
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 12.79
• 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: ¥1,700.00
• Price Target Upside: 1.95% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 66 Neutral
• Price Target: ―

Nippon Shokubai shows strong financial performance with robust profitability margins and a stable balance sheet, though the recent decline in free cash flow warrants attention. Technical indicators suggest moderate momentum with potential downward pressure. The stock's fair valuation and high dividend yield make it attractive for income-focused investors. Overall, the company has a solid foundation, but maintaining revenue growth is essential for future stock performance.

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

Company Description

Nippon Shokubai Co., Ltd. provides various chemical products in Japan. It operates through three segments: Basic Chemicals, Functional Chemicals, and Environment and Catalysts. The Basic Chemicals segment offers acrylic acids, acrylates, ethylene oxides, ethylene glycols, ethanolamine, secondary alcohol ethoxylates, and glycol ether. The Functional Chemicals segment provides superabsorbent polymers, special acrylates, pharmaceutical intermediates, polymer for concrete admixture, electronic and information materials, iodine, maleic anhydride, resins for adhesives and paints, and adhesive products. The Environment and Catalysts segment offers automotive, De-NOx, dioxin decomposition, waste gas treatment, and process catalysts; and fuel cell materials. The company also provides agro chemicals, flame retardants, photo/electro chemicals, adhesive- processed and fine sphere particles, surfactant and other chemicals, stabilizer of vinyl chloride resin, antiseptic, antifouling agents, anti-freeze, polycyclic aromatic hydrocarbons, acrylic acid derivatives, unsaturated polyester resins, plastic molded materials, malonates, plant control systems, and water soluble polymers, as well as MAA, MMA, and PMMA products. In addition, it designs, constructs, repairs, and maintains production facilities; and provides logistics for chemicals. The company was formerly known as Nippon Shokubai Kagaku Kogyo Co., Ltd. and changed its name to Nippon Shokubai Co., Ltd. in 1991. Nippon Shokubai Co., Ltd. was incorporated in 1941 and is headquartered in Osaka, Japan.

How the Company Makes Money

Nippon Shokubai Co., Ltd. generates revenue primarily through the manufacture and sale of chemical products. Its key revenue streams include superabsorbent polymers, which are extensively used in diapers and personal hygiene products, and acrylic acids, which serve as essential materials in the production of paints and adhesives. The company also benefits from its investments in research and development, which help to maintain its competitive edge and foster innovation in functional chemicals. Strategic partnerships and collaborations with other companies in the chemical industry enhance its market position and contribute to its earnings.

Nippon Shokubai Co., Ltd. Financial Statement Overview

Summary

Nippon Shokubai demonstrates solid financial health with strong profitability margins and a stable balance sheet. While there is efficient cash flow management, the recent decrease in free cash flow could pose challenges if not addressed. The company should focus on consistent revenue growth to enhance its financial position further.

Income Statement

The company demonstrates a strong gross profit margin of 17.5% for the TTM, indicating effective cost management. The net profit margin improved to 3.73% in the TTM from 2.81% in the previous year, showcasing enhanced profitability. However, revenue growth has been inconsistent with a decline in the latest TTM period. EBIT and EBITDA margins are stable, reflecting operational efficiency.

Balance Sheet

Nippon Shokubai has a robust equity base, with an equity ratio of 69.06%, indicating financial stability. The debt-to-equity ratio is low at 0.12, suggesting conservative leverage. Return on equity has improved to 3.96% in the TTM, indicating better utilization of equity despite past fluctuations.

Cash Flow

The operating cash flow to net income ratio is strong at 3.38, showing efficient cash generation from operations. However, free cash flow has decreased significantly in the TTM period, which could impact future investments. The free cash flow to net income ratio remains healthy but shows a downward trend.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
408.27B	392.01B	419.57B	369.29B	273.16B	302.15B
	Gross Profit
71.42B	68.00B	80.39B	77.71B	48.05B	53.48B
	EBIT
17.77B	16.56B	23.53B	29.06B	-15.92B	13.18B
	EBITDA
49.84B	49.74B	53.26B	57.27B	15.45B	40.20B
	Net Income Common Stockholders
15.23B	11.01B	19.39B	23.72B	-10.90B	11.09B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
61.49B	55.13B	53.19B	51.79B	46.00B	53.76B
	Total Assets
557.21B	544.06B	523.32B	518.15B	471.62B	475.64B
	Total Debt
47.33B	45.61B	50.91B	52.19B	52.87B	56.03B
	Net Debt
-14.16B	-9.52B	11.88B	12.83B	16.53B	12.16B
	Total Liabilities
163.31B	151.50B	153.32B	167.03B	147.89B	149.53B
	Stockholders Equity
385.03B	383.45B	362.23B	343.88B	317.37B	319.70B
Cash Flow		Free Cash Flow
20.17B	37.31B	18.36B	12.80B	3.89B	3.47B
	Operating Cash Flow
51.41B	57.88B	41.45B	35.06B	35.28B	37.50B
	Investing Cash Flow
-24.80B	-15.68B	-25.98B	-23.16B	-30.62B	-32.81B
	Financing Cash Flow
-13.93B	-28.36B	-17.32B	-10.75B	-12.75B	-7.86B

Nippon Shokubai Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1667.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 Negative. The current price of 1667.5 is below the 20-day moving average (MA) of 1671.62, below the 50-day MA of 1697.40, and below the 200-day MA of 1711.96, indicating a bearish trend. The MACD of -9.79 indicates Negative momentum. The RSI at 46.17 is Neutral, neither overbought nor oversold. The STOCH value of 35.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
4114	66 Neutral	¥257.04B	14.55		6.84%	5.66%	77.87%
Sector *	50 Neutral	$1.98B	-1.07	-21.34%	3.71%	2.03%	-30.65%
DIK		€1.03B	14.99	-4.17%	5.18%	―	―
NP7		€1.28B	11.68	6.49%	4.85%	―	―
TOAGF		$1.07B	14.66	5.27%	4.10%	―	―
4368	78 Outperform	¥126.35B	10.87		2.03%	15.77%	23.59%
4041	69 Neutral	¥156.79B	10.30		4.99%	1.60%	15.50%

Nippon Shokubai Co., Ltd. Corporate Events

Nippon Shokubai Unveils Mid-Term Management Plan 2027

Nippon Shokubai Co., Ltd. has announced its Mid-Term Management Plan 2027, which will guide the company from April 2025 to March 2028. This strategic plan is expected to impact the company’s operations and industry positioning, although specific implications for stakeholders were not detailed in the release.

Nippon Shokubai Completes Acquisition of Emulsion Technology

Nippon Shokubai Co., Ltd. has completed the acquisition of Emulsion Technology Co., Ltd., making it a subsidiary. This strategic move is expected to have a negligible impact on the company’s financial results for the fiscal year ending March 31, 2025, but it positions Nippon Shokubai to enhance its market presence in the industrial materials sector.

Nippon Shokubai Completes Treasury Stock Disposal with Adjustments

Nippon Shokubai Co., Ltd. has completed the payment procedures for the disposal of treasury stock through its Employee Stockholding Association, following a resolution from November 2024. The number of shares and total value of the disposal were adjusted due to partial forfeiture, reflecting the finalized membership of the Employee Stockholding Association.

Nippon Shokubai to Build New Plant for Lithium-Ion Battery Electrolyte

Nippon Shokubai Co., Ltd. has announced the decision to construct a new plant for its IONEL™ product, an electrolyte used in lithium-ion batteries. This development is part of the company’s strategy to strengthen its domestic supply system for LiFSI, indicating a commitment to enhancing its market position in the battery materials sector. The company does not anticipate any significant impact on its financial earnings for the fiscal year ending March 31, 2025, but will provide updates if necessary.

Nippon Shokubai Reports Robust Q3 Financial Growth Amid Market Expansion

Nippon Shokubai Co., Ltd. reported a positive financial performance for the third quarter of fiscal year 2024, with significant increases in revenue and profits compared to the previous year. The company has seen growth in operating profit and profit before tax, attributed to strategic operational improvements and market conditions. Despite a dip in total comprehensive income, the company’s year-on-year growth indicates strengthened financial resilience and an optimistic outlook for stakeholders.