KH Neochem Co.,Ltd. (4189) AI Stock Analysis

• Market Cap: ¥94.31B
• Dividend Yield: 3.88%
• Average Volume (3M): 110.95K
• Price to Earnings (P/E): 10.2
• Beta (1Y): 0.69
• Revenue Growth: 2.61%
• EPS Growth: 30.29%
• Country: JP
• Employees: 829
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals
• EPS (TTM): 48.18
• Shares Outstanding: 37,149,400
• 10 Day Avg. Volume: 104,350
• 30 Day Avg. Volume: 110,953
• PEG Ratio: 0.40
• Price to Book (P/B): 1.09
• Price to Sales (P/S): 0.63
• P/FCF Ratio: -52.01
• 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: 64 Neutral
• Price Target: ¥2,798.00 ▲(12.96% Upside)

KH Neochem Co.,Ltd. has a robust financial foundation with strong valuation metrics. However, technical indicators suggest bearish momentum, which could pose short-term risks. The absence of earnings call data and corporate events limits further insights.

Positive Factors

Conservative leverage

A low debt-to-equity ratio (0.28) and a strong equity base give KH Neochem durable financial flexibility to fund maintenance and selective capex, absorb cyclical downturns in chemicals, and limit refinancing pressure—supporting multi-period operational resilience.

Healthy margins and ROE

Sustained gross and net margins (21.09% and 6.98%) alongside a 12.10% ROE indicate the business converts sales to profit efficiently and generates solid returns on equity. This supports reinvestment, dividend capacity, and competitive positioning in specialty chemical niches over time.

Consistent revenue growth

Modest but consistent revenue growth (3.95% y/y) reflects stable demand across higher alcohols, plasticizers and intermediates. Diverse end-market exposure (construction, automotive, packaging) and volume-based sales underpin recurring revenue streams and reduce reliance on any single cyclical sector.

Negative Factors

Negative free cash flow

Negative free cash flow in 2024 signals a cash-generation shortfall despite accounting profits. Over a multi-month horizon this can constrain capex, dividend policy or debt repayment, force external financing, and limit the company’s ability to invest in efficiency or growth initiatives without improving cash conversion.

Weak cash conversion

An OCF-to-net-income ratio of 0.84 shows earnings are not fully converting to cash, possibly due to working capital builds, receivables or inventory. Persisting gaps reduce earnings quality and increase reliance on external funding for working capital and capex, weakening structural liquidity.

Eroding margins and equity ratio

A trend of declining margins and a falling equity ratio point to cost pressures and a shrinking financial cushion. Sustained margin erosion lowers profitability resilience vs input cost volatility, while a reduced equity ratio raises sensitivity to downturns and may limit strategic investment without higher leverage.

KH Neochem Co.,Ltd. Business Overview & Revenue Model

Company Description

KH Neochem Co., Ltd. researches, manufactures, and sells petrochemical products in Japan and internationally. It offers a range of chemical products, such as alcohols, esters, ketones, glycol ethers, synthetic fatty acids, aldehydes, diols, hydrocarbons, and functional monomers. The company provides basic chemicals, including butyl alcohol and acetate, 2-ethyl hexyl alcohol, and isononyl alcohol for use in paints, inks, thinners, detergents, plasticizer raw materials, and resin raw materials. It also offers performance materials, such as 2-ethyl hexanoic and isononanoic acid, diacetone acrylamide, and 1,3-butylene glycol for use in lubricants, water-borne paints, and cosmetics. In addition, the company provides electronic materials comprising propylene glycol monomethyl ether acetate–P, and propylene glycol monomethyl ether-P for LCD panels and semiconductors. KH Neochem Co., Ltd. was founded in 1966 and is headquartered in Tokyo, Japan.

How the Company Makes Money

KH Neochem generates revenue through the production and sale of its specialty chemical products. Its primary revenue streams include the sale of fine chemicals, which are utilized in various applications across multiple industries. The company maintains strong partnerships with key players in the pharmaceutical and electronics sectors, which contribute significantly to its earnings. Additionally, KH Neochem invests in research and development to innovate and expand its product offerings, thereby enhancing its market position and driving sales growth. The company's focus on high-quality products and customer service further solidifies its revenue generation capabilities.

KH Neochem Co.,Ltd. Financial Statement Overview

Summary

KH Neochem Co.,Ltd. demonstrates strong revenue growth and profitability with a solid balance sheet. However, declining margins and negative free cash flow in 2024 highlight potential financial challenges.

Income Statement

KH Neochem Co.,Ltd. demonstrated solid revenue growth with a 3.95% increase in 2024 over 2023. The company maintained a strong gross profit margin of 21.09% and a net profit margin of 6.98% in 2024, indicating consistent profitability. However, there is a slight decline in margins from previous years, pointing to potential cost pressures.

Balance Sheet

The company's debt-to-equity ratio is 0.28, reflecting a conservative leverage position. Return on Equity (ROE) stands at 12.10%, showcasing effective use of equity to generate profits. The equity ratio of 52.55% highlights a strong equity base, but the decreasing trend in equity ratio from previous years may signal increasing liabilities.

Cash Flow

Free cash flow turned negative in 2024, indicating cash flow challenges. The operating cash flow to net income ratio is 0.84, suggesting operational cash generation is trailing net income. The free cash flow to net income ratio is negative, which calls for attention to cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	122.59B	119.76B	115.22B	114.88B	117.11B	77.33B
Gross Profit	26.90B	25.25B	21.94B	24.45B	32.23B	16.14B
EBITDA	18.72B	17.00B	14.46B	16.01B	24.19B	9.48B
Net Income	8.99B	8.36B	6.83B	8.07B	13.69B	4.05B
Balance Sheet
Total Assets	125.88B	131.46B	124.50B	131.25B	122.07B	95.51B
Cash, Cash Equivalents and Short-Term Investments	5.40B	7.16B	9.68B	10.93B	16.93B	9.07B
Total Debt	20.63B	19.20B	16.39B	22.52B	20.16B	21.46B
Total Liabilities	55.23B	59.54B	58.01B	69.18B	64.57B	49.63B
Stockholders Equity	67.80B	69.09B	63.74B	59.35B	54.92B	43.38B
Cash Flow
Free Cash Flow	0.00	-1.45B	7.94B	-5.36B	13.00B	-4.20B
Operating Cash Flow	0.00	6.98B	13.20B	5.13B	17.40B	6.93B
Investing Cash Flow	0.00	-8.90B	-4.94B	-10.08B	-4.39B	-11.18B
Financing Cash Flow	0.00	-645.00M	-9.50B	-1.08B	-5.17B	-4.53B

KH Neochem Co.,Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2477.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4189, the sentiment is Negative. The current price of 2477 is below the 20-day moving average (MA) of 2527.35, above the 50-day MA of 2468.17, and below the 200-day MA of 2530.16, indicating a neutral trend. The MACD of 20.67 indicates Positive momentum. The RSI at 47.65 is Neutral, neither overbought nor oversold. The STOCH value of 22.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4189.

KH Neochem Co.,Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4220	83 Outperform	¥83.62B	10.47	―	3.06%	2.02%	30.10%
4097	79 Outperform	¥61.88B	12.69	―	2.88%	3.42%	13.37%
5013	78 Outperform	¥41.24B	8.56	―	3.53%	-3.45%	30.52%
4041	74 Outperform	¥205.76B	13.10	―	4.09%	1.69%	0.94%
4368	74 Outperform	¥262.21B	20.34	―	1.23%	8.80%	33.39%
4189	64 Neutral	¥94.31B	10.20	―	3.88%	2.61%	30.29%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%

KH Neochem Co.,Ltd. Corporate Events

KH Neochem Reports Strong Earnings Growth Despite Slight Sales Decline

KH Neochem Co., Ltd. reported its consolidated financial results for the nine months ending September 30, 2025, showing a slight decrease in net sales by 0.2% compared to the previous year. However, the company experienced significant growth in operating income, ordinary income, and net income attributable to owners of the parent, with increases of 16.2%, 15.0%, and 14.3% respectively. The company’s comprehensive income also rose by 17.2%. These results indicate a strong operational performance despite a slight dip in sales, suggesting an effective cost management strategy and operational efficiency.

The most recent analyst rating on (JP:4189) stock is a Buy with a Yen3031.00 price target. To see the full list of analyst forecasts on KH Neochem Co.,Ltd. stock, see the JP:4189 Stock Forecast page.