Kaneka (4118) AI Stock Analysis

• Market Cap: $275.72B
• Dividend Yield: 3.44%
• Average Volume (3M): 189.42K
• Price to Earnings (P/E): 10.4
• Beta (1Y): 0.81
• Revenue Growth: 2.60%
• EPS Growth: 9.50%
• Country: JP
• Employees: 11,544
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 108.77
• Shares Outstanding: 66,000,000
• 10 Day Avg. Volume: 277,740
• 30 Day Avg. Volume: 189,416
• PEG Ratio: 0.77
• Price to Book (P/B): 0.51
• Price to Sales (P/S): 0.30
• P/FCF Ratio: -24.21
• Enterprise Value/Market Cap: 1.63
• Enterprise Value/Revenue: 0.56
• Enterprise Value/Gross Profit: 2.01
• Enterprise Value/Ebitda: 6.08
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: ¥4,769.00 ▲(9.38% Upside)

Kaneka's stock is supported by strong valuation metrics and stable technical indicators. Financial performance shows robust revenue growth and operational efficiency, though profitability and cash flow challenges need addressing. The absence of earnings call and corporate events data limits further insights.

Positive Factors

Revenue Growth

Consistent revenue growth underscores Kaneka's ability to expand its market presence and product adoption, supporting long-term business sustainability.

Operational Efficiency

Improved operational efficiency through better EBIT and EBITDA margins suggests effective cost management and resource utilization, enhancing profitability.

Strong Cash Generation

Robust operating cash flow reflects Kaneka's strong cash generation ability, crucial for funding operations and strategic investments.

Negative Factors

Declining Net Profit Margins

Declining net profit margins could indicate rising costs or inefficiencies, potentially impacting long-term profitability and shareholder returns.

Negative Free Cash Flow

Negative free cash flow suggests capital management challenges, which may constrain liquidity and limit investment flexibility.

Rising Debt Levels

Increased debt levels can strain financial stability and reduce flexibility, posing risks if not managed carefully over the long term.

Kaneka Business Overview & Revenue Model

Company Description

Kaneka Corporation manufactures and sells polyvinyl chloride (PVC), crosslinked PVC, PVC-PVAc polymers, paste PVC, acryl grafted-vinyl chloride copolymer, and chlorinated PVC in Japan and internationally. It provides impact modifiers, processing aids, specialty additives, toughener for thermosetting resins, silyl-terminated polyether, acrylic silicon, terminally reactive liquid acrylic, and biodegradable polymer, engineering resin for injection molding, zero birefringence, acrylic film, and isobutylene-based thermoplastic elastomer products. The company also offers polypropylene and kanelite foams, extruded polystyrene foam insulation, polyimide film, transparent film for optical use, high thermal conductive graphite sheets, multi-layer insulation, transparent conductive film, and thermo-resistant, and light-resistant transparent resin products. In addition, it provides photovoltaic power generation systems for residences, public, and industrial installations; eco fur, flame-retardant, hair accessory, and new materials; organic EL lighting panels; and biosurfactant. Further, the company offers intervention, blood purification, gastroenterology intervention, testing equipment, regenerative medicine and cell therapy, and genetic diagnostic products; and low molecular pharmaceutical materials, affinity chromatography resin for purification of a monoclonal antibody, biopharmaceuticals, transdermal medicine, and innerwear with shock-absorbing pad. It also provides dairy products, margarine, fat and oils, whipping cream, filling, baker's yeast/ dough improver, processed fruits, butter, shortening, cacao butter alternatives, cream for kneading and other uses, frozen dough, spices, antifreeze materials; and pharma and supplemental nutrition solutions, including coenzyme, lactic-acid bacteria, and functional foodstuffs, as well as fertilizers. Kaneka Corporation was incorporated in 1949 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Kaneka generates revenue through multiple key streams, primarily from the sale of its specialty chemicals, which are used in a wide range of industries, including electronics, automotive, and construction. The company's pharmaceutical division contributes significantly to its earnings through the development and commercialization of prescription drugs and medical products. Additionally, Kaneka has established partnerships with various firms and research institutions to enhance its product offerings and expand its market reach, which further supports its revenue growth. The company also invests in biotechnology and health-related sectors, generating income through the sale of health supplements and functional foods.

Kaneka Financial Statement Overview

Summary

Kaneka demonstrates solid revenue growth and operational efficiency, supported by stable equity and robust operating cash flows. However, challenges persist in the form of declining net profit margins and negative free cash flow, largely driven by significant capital expenditures. The increase in debt levels requires careful monitoring to ensure financial stability.

Income Statement

Kaneka's income statement shows strong revenue growth with a compound annual growth rate (CAGR) of approximately 6.4% over the past five years. The gross profit margin has been relatively stable, with a slight improvement to 27.8% in 2025. However, the net profit margin shows a slight decline from previous periods, standing at 3.1% for 2025. EBIT and EBITDA margins have improved, indicating operational efficiency, but the declining net profit margin signals pressure on the bottom line, possibly due to increased expenses or cost of goods sold.

Balance Sheet

Kaneka's balance sheet indicates a stable equity position, with stockholders' equity rising to 471,937 million yen in 2025. The debt-to-equity ratio increased to 0.47, showing a moderate leverage level. The equity ratio improved slightly to 51.3%, suggesting a robust financial position. However, the rise in total debt over the years could pose potential risks if not managed carefully. Overall, the company maintains a balanced approach to leveraging debt while sustaining equity growth.

Cash Flow

The cash flow statement reveals challenges in free cash flow, which turned negative in 2025 at -9,931 million yen, due to high capital expenditures. Operating cash flow remains strong at 41,252 million yen, indicating good cash generation from core operations. The free cash flow to net income ratio is negative due to the capital intensity, but the operating cash flow to net income ratio stands favorably. While cash from operations is solid, the negative free cash flow suggests a need for careful capital management to avoid liquidity issues.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	807.50B	807.20B	762.30B	755.82B	691.53B	577.43B
Gross Profit	223.41B	224.63B	204.22B	198.93B	196.65B	166.94B
EBITDA	73.88B	84.74B	81.62B	74.44B	75.98B	60.27B
Net Income	22.54B	25.31B	23.22B	23.01B	26.49B	15.83B
Balance Sheet
Total Assets	920.22B	920.14B	870.21B	782.64B	726.96B	667.43B
Cash, Cash Equivalents and Short-Term Investments	44.35B	45.64B	43.97B	41.87B	41.95B	47.92B
Total Debt	212.31B	223.06B	195.09B	175.94B	132.83B	119.34B
Total Liabilities	428.71B	427.72B	395.82B	346.22B	314.76B	286.39B
Stockholders Equity	470.63B	471.94B	454.11B	417.99B	387.77B	357.61B
Cash Flow
Free Cash Flow	0.00	-9.93B	-3.35B	-13.28B	-5.82B	31.64B
Operating Cash Flow	0.00	41.25B	61.91B	28.71B	34.11B	74.04B
Investing Cash Flow	0.00	-55.04B	-58.77B	-41.97B	-39.59B	-43.23B
Financing Cash Flow	0.00	14.45B	-1.52B	12.35B	-1.10B	-21.90B

Kaneka Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4360.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4118, the sentiment is Positive. The current price of 4360 is above the 20-day moving average (MA) of 4304.10, above the 50-day MA of 4270.58, and above the 200-day MA of 3980.66, indicating a bullish trend. The MACD of 18.27 indicates Negative momentum. The RSI at 55.30 is Neutral, neither overbought nor oversold. The STOCH value of 53.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4118.

Kaneka Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4205	79 Outperform	¥352.66B	9.79	9.65%	3.97%	0.87%	16.71%
4118	74 Outperform	$275.72B	10.45	5.47%	3.44%	2.60%	9.50%
4631	71 Outperform	¥358.18B	11.05	8.14%	2.64%	-1.45%	―
4088	69 Neutral	¥500.84B	10.05	10.06%	3.14%	4.35%	7.88%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
4208	57 Neutral	¥246.13B	42.61	1.47%	4.36%	-7.45%	-71.68%
4182	55 Neutral	¥548.61B	-74.39	-1.15%	3.54%	-6.83%	-123.67%

Kaneka Corporate Events

Kaneka Corporation Updates on Share Repurchase Program

Kaneka Corporation announced the status of its share repurchase program, initially resolved in May 2025. The company repurchased 1,913,900 shares for approximately 8.16 billion yen by November 30, 2025, as part of its ongoing strategy to enhance shareholder value through market purchases on the Tokyo Stock Exchange.

Kaneka Corporation Reports Mixed Financial Results for First Half of 2025

Kaneka Corporation reported its consolidated financial results for the six months ending September 30, 2025, showing a slight increase in net sales by 0.4% compared to the previous year. However, the company experienced a decline in operating and ordinary income by 21.7% and 18.3% respectively. Despite these challenges, the net income attributable to owners of the parent increased by 8.7%, indicating some resilience in its financial performance. The company also announced an increase in its annual dividend forecast, reflecting a positive outlook for shareholder returns despite the mixed financial results.

Kaneka Corporation Updates on Share Repurchase Program

Kaneka Corporation announced the status of its share repurchase program, initially resolved in May 2025. The company repurchased 1,702,400 shares worth approximately 7.27 billion yen by October 31, 2025, as part of a broader plan to buy back up to 3 million shares. This move is likely aimed at enhancing shareholder value and optimizing capital structure.