Dainichiseika Color & Chemicals Mfg.Co., Ltd. (4116) AI Stock Analysis

• Market Cap: ¥77.31B
• Dividend Yield: 3.04%
• Average Volume (3M): 35.30K
• Price to Earnings (P/E): 12.2
• Beta (1Y): 0.89
• Revenue Growth: 1.57%
• EPS Growth: -33.97%
• Country: JP
• Employees: 3,634
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 73.84
• Shares Outstanding: 18,113,110
• 10 Day Avg. Volume: 27,040
• 30 Day Avg. Volume: 35,296
• PEG Ratio: 0.03
• Price to Book (P/B): 0.40
• Price to Sales (P/S): 0.41
• P/FCF Ratio: -40.54
• 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: 76 Outperform
• Price Target: ¥4,437.00 ▲(6.28% Upside)

Dainichiseika's strong financial performance, characterized by stable revenue growth and a robust balance sheet, is the primary driver of its stock score. The attractive valuation with a low P/E ratio and high dividend yield further enhances its appeal. Technical indicators support a positive outlook, although recent cash flow challenges need attention for sustained growth.

Positive Factors

Revenue Growth

Consistent revenue growth indicates robust demand for Dainichiseika's products, reflecting strong market position and effective sales strategies.

Balance Sheet Health

A strong balance sheet with low leverage enhances financial stability, providing flexibility for strategic investments and growth opportunities.

Profitability Improvement

Significant improvement in profitability suggests effective cost management and operational efficiency, supporting long-term earnings growth.

Negative Factors

Cash Flow Challenges

Negative free cash flow indicates potential liquidity issues, which could constrain the company's ability to fund operations and investments without external financing.

Operational Efficiency Volatility

Volatility in operational efficiency can lead to unpredictable earnings, affecting investor confidence and potentially impacting long-term growth prospects.

Cash Conversion Weakness

Weak cash conversion indicates challenges in turning profits into cash, which may affect the company's ability to reinvest in growth or return capital to shareholders.

Dainichiseika Color & Chemicals Mfg.Co., Ltd. Business Overview & Revenue Model

Company Description

Dainichiseika Color & Chemicals Mfg. Co., Ltd. manufactures and sells a range of pigments and colorants. It provides inorganic, organic, and processed pigments for applications, including paints, printing inks, and information display and recording materials; colorants for industries comprising mass colorants for synthetic fibers, pigmented printing agents, and colorants for paper and construction materials; and functional materials for polyvinyl chloride, high-performance fluororesin, and various thermoplastic and thermosetting resins, as well as for electronics and information materials, automotive, and interior construction materials fields. The company also offers UV and EB curable coating materials, decorative, and functional coating materials; and polyurethane and colorants used in synthetic leather and molded products, coating agents, and adhesives, as well as imide-based resins. In addition, it provides Chitosan, a polymer product made from crab shells, as well as its derivatives; functional inks and offset printing inks used in paper media, such as flyers, books, and packaging materials; gravure inks; and coating agents and flexographic printing inks. The company was founded in 1931 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Dainichiseika generates revenue primarily through the sale of its wide range of chemical products, including pigments and specialty chemicals, to various industries such as paints, coatings, and plastics. The company leverages its expertise in color and chemical technology to develop high-performance products that command premium pricing in the market. Key revenue streams include direct sales to manufacturers, long-term contracts with large clients, and partnerships with distributors. Additionally, the company may benefit from research and development collaborations that lead to the commercialization of new products, further enhancing its earnings potential.

Dainichiseika Color & Chemicals Mfg.Co., Ltd. Financial Statement Overview

Summary

Dainichiseika exhibits a strong financial position with stable revenue growth and improving profitability. The balance sheet remains robust with decreasing leverage, enhancing the company's financial resilience. However, recent cash flow issues need to be addressed to ensure long-term sustainability.

Income Statement

The company exhibits strong revenue growth of 4.12% in the latest year, with an impressive jump in net income from 3.66 billion to 10.29 billion. The gross profit margin improved slightly, indicating efficient cost management. However, past fluctuations in EBIT margin suggest some volatility in operational efficiency.

Balance Sheet

The balance sheet is solid with a healthy equity ratio of 65.03% and a decreasing debt-to-equity ratio, indicating reduced financial leverage and increased financial stability over the years. The company's strong equity base supports a favorable return on equity of 8.04%.

Cash Flow

Cash flow stability is a concern, with free cash flow turning negative in the latest year. The operating cash flow to net income ratio has weakened, suggesting challenges in converting earnings into cash. However, the company has historically maintained positive operating cash flow, indicating potential for recovery.

Breakdown	TTM	Dec 2025	Dec 2023	Dec 2023	Dec 2021	Dec 2021
Income Statement
Total Revenue	125.12B	124.76B	122.00B	119.82B	138.49B	121.93B
Gross Profit	25.98B	25.22B	21.31B	22.36B	22.22B	25.66B
EBITDA	14.04B	19.54B	8.87B	10.80B	13.52B	14.18B
Net Income	11.26B	10.29B	2.01B	3.66B	6.34B	6.17B
Balance Sheet
Total Assets	196.87B	196.78B	192.76B	194.85B	197.72B	196.71B
Cash, Cash Equivalents and Short-Term Investments	22.45B	24.25B	24.76B	23.58B	36.65B	26.35B
Total Debt	20.83B	21.04B	31.00B	25.28B	42.70B	32.91B
Total Liabilities	67.55B	66.28B	78.47B	75.69B	94.06B	86.22B
Stockholders Equity	127.00B	128.01B	112.06B	116.75B	101.90B	108.45B
Cash Flow
Free Cash Flow	0.00	-1.27B	-2.24B	4.48B	4.26B	-252.00M
Operating Cash Flow	0.00	4.17B	3.00B	9.02B	11.52B	7.58B
Investing Cash Flow	0.00	1.42B	-2.19B	-1.45B	-3.77B	-6.64B
Financing Cash Flow	0.00	-7.00B	-3.84B	-10.21B	-358.00M	-11.42B

Dainichiseika Color & Chemicals Mfg.Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4175.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4116, the sentiment is Positive. The current price of 4175 is above the 20-day moving average (MA) of 4104.00, above the 50-day MA of 3969.60, and above the 200-day MA of 3483.62, indicating a bullish trend. The MACD of 94.71 indicates Negative momentum. The RSI at 71.98 is Negative, neither overbought nor oversold. The STOCH value of 76.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4116.

Dainichiseika Color & Chemicals Mfg.Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4365	80 Outperform	¥64.07B	8.01	―	2.03%	-4.42%	10.23%
4362	77 Outperform	¥63.55B	13.90	―	2.92%	3.03%	28.27%
4116	76 Outperform	¥77.31B	12.23	―	3.04%	1.57%	-33.97%
4028	74 Outperform	¥111.27B	7.99	―	4.15%	1.16%	167.89%
4078	70 Outperform	¥55.03B	8.46	―	4.37%	-1.09%	―
4008	68 Neutral	¥73.89B	11.94	―	3.74%	-0.68%	-9.93%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%