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

• Market Cap: ¥78.21B
• Dividend Yield: 3.04%
• Average Volume (3M): 35.30K
• Price to Earnings (P/E): 12.4
• Beta (1Y): 0.92
• 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: ¥4,975.00 ▲(19.16% 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

Balance Sheet Strength

A high equity ratio and falling leverage give the company durable financial resilience: they reduce refinancing risk, support steady capex and R&D funding, and improve ability to weather cyclical demand in specialty chemicals without compromising strategic investments.

Improving Profitability

Sustained revenue growth accompanied by a large net income increase and modest gross margin gains point to improving operational leverage and cost control. This supports reinvestment, dividend capacity and longer-term earnings stability if maintained across business cycles.

Specialty Chemical Market Position

Focus on specialty pigments and functional chemicals creates durable customer stickiness and higher technical barriers to entry versus commodity chemicals. Serving industrial customers (plastics, manufacturing) yields recurring B2B demand and long-term contractual relationships.

Negative Factors

Weakening Cash Conversion

Negative free cash flow and a decline in operating-cash-to-income conversion threaten the firm's ability to fund capex, dividends and deleveraging from internally generated cash. Persistent cash conversion weakness can force external financing or cutbacks in strategic spending.

Margin Volatility

Variable EBIT margins imply sensitivity to input costs, product mix or pricing power; such volatility undermines predictable cash generation and long-term return on invested capital, complicating capital allocation and strategic planning for the specialty chemicals business.

Recent EPS Contraction

A significant negative EPS growth rate signals prior earnings pressure which can erode investor confidence and weaken the company's ability to sustain dividends or self-fund growth. If EPS recovery stalls, strategic flexibility and attractiveness to long-term investors may suffer.

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: Positive
• RSI: Neutral
• 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 below the 20-day moving average (MA) of 4365.00, above the 50-day MA of 4133.10, and above the 200-day MA of 3597.61, indicating a neutral trend. The MACD of 65.33 indicates Positive momentum. The RSI at 55.42 is Neutral, neither overbought nor oversold. The STOCH value of 23.32 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	¥65.04B	8.14	―	2.03%	-4.42%	10.23%
4116	76 Outperform	¥78.21B	12.37	―	3.04%	1.57%	-33.97%
4362	75 Outperform	¥58.20B	12.82	―	2.92%	3.03%	28.27%
4028	74 Outperform	¥117.11B	8.41	―	4.15%	1.16%	167.89%
4078	70 Outperform	¥52.64B	8.60	―	4.37%	-1.09%	―
4008	68 Neutral	¥74.03B	11.96	―	3.74%	-0.68%	-9.93%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%