Sumitomo Bakelite Co., Ltd. (4203) AI Stock Analysis

• Market Cap: ¥527.48B
• Dividend Yield: 1.82%
• Average Volume (3M): 219.79K
• Price to Earnings (P/E): 20.4
• Beta (1Y): 0.99
• Revenue Growth: 3.25%
• EPS Growth: -11.31%
• Country: JP
• Employees: 7,953
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 73.06
• Shares Outstanding: 93,757,960
• 10 Day Avg. Volume: 194,370
• 30 Day Avg. Volume: 219,793
• PEG Ratio: -1.51
• Price to Book (P/B): 1.06
• Price to Sales (P/S): 1.01
• P/FCF Ratio: 10.95
• 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): 292.57
• Revenue Forecast (FY): ¥315.08B

• Rating: 76 Outperform
• Price Target: ¥6,180.00 ▲(19.95% Upside)
• Action: Reiterated Date: 02/04/26
• Date: Action: Reiterated 02/04/26

The score is driven primarily by solid financial performance (strong margins and low leverage) and supportive technical momentum (price above major moving averages with positive MACD). The main offset is weaker recent cash-flow conversion and only moderate valuation support (P/E ~18.4, ~1.74% yield).

Positive Factors

Healthy margins and improving profitability

Sustained gross, operating and net margins indicate durable pricing power and cost control in specialty polymers. Higher margins support reinvestment in R&D and customer qualification cycles, making profitability less sensitive to short-term volume swings and enhancing long-term cash generation potential.

Conservative balance sheet / low leverage

Very low leverage provides financial flexibility to fund capex, R&D, or weather industry downturns without forcing asset sales. This reduces solvency risk, supports multi-year customer qualification investments, and preserves strategic optionality for capital allocation over the medium term.

Specialized semiconductor and engineered-materials focus

A specialization in semiconductor packaging and engineered polymers creates high technical barriers and long qualification cycles. These traits foster sticky B2B relationships and premium product mix, aligning the company with structural electronics and semiconductor trends that support multi-quarter to multi-year demand durability.

Negative Factors

Weaker cash conversion / falling FCF

A notable drop in FCF and a FCF-to-net-income ratio near 57% reduce internal funding capacity for capex, dividends, and strategic projects. If persistent, weaker cash conversion can constrain reinvestment and make the company more vulnerable to working-capital swings or commodity-cost pressures over the medium term.

Cyclical and uneven revenue growth

Revenue volatility tied to semiconductor and industrial cycles complicates capacity planning and margin predictability. Uneven top-line trends can lead to periodic margin pressure and make multi-year forecasting and covenant-free investment decisions more challenging for management and investors.

Modest return on equity

A mid-single-digit ROE points to limited capital efficiency versus higher-return industrial peers. Over time this can constrain value creation from reinvested earnings and limit the pace at which shareholder returns can compound, especially if growth requires significant incremental capital.

Sumitomo Bakelite Co., Ltd. Business Overview & Revenue Model

Company Description

Sumitomo Bakelite Co., Ltd. (4203) is a leading Japanese manufacturer specializing in the production of high-performance plastics and resins. The company operates primarily in sectors such as automotive, electronics, and industrial materials, providing a diverse range of products including phenolic resins, epoxy resins, and thermoplastic materials. With a commitment to innovation and sustainability, Sumitomo Bakelite focuses on developing advanced materials that meet the evolving needs of its global customer base.

How the Company Makes Money

Sumitomo Bakelite generates revenue through the sale of its specialty resins and plastics, which are utilized in various industries, including automotive, electronics, and consumer goods. The company's revenue model is heavily based on the production and distribution of high-performance materials, which are often sold under long-term contracts to major manufacturers. Key revenue streams include the sale of phenolic and epoxy resins, as well as thermoplastic compounds. Additionally, Sumitomo Bakelite benefits from strategic partnerships with leading companies in the automotive and electronics sectors, which enhance its market reach and ensure a steady demand for its products. The company's focus on research and development also allows it to innovate and expand its product offerings, thus increasing its potential revenue sources.

Sumitomo Bakelite Co., Ltd. Financial Statement Overview

Summary

Strong overall fundamentals: TTM revenue up ~8.6% with healthy profitability (gross ~31%, operating ~11%, net ~8.4%) and improving margins. Balance sheet is conservatively levered (debt/equity ~0.11) with steady but modest ROE (mid‑6%). Main drag is cash flow quality—TTM free cash flow fell ~16.5% and cash conversion is weaker (FCF ~57% of net income).

Income Statement

TTM (Trailing-Twelve-Months) revenue is up ~8.6% versus the prior annual period, with healthy profitability (gross margin ~31%, operating margin ~11%, net margin ~8.4%). Margins have generally improved versus the last few annual periods, and net income in TTM is meaningfully higher than the latest annual figure. The main offset is that growth has been uneven across years (very strong in FY2022, slower in FY2024), indicating a more cyclical/variable demand backdrop despite solid current profitability.

Balance Sheet

The balance sheet is conservatively levered, with low debt relative to equity in TTM (~0.11) and a clear improvement from earlier years when leverage was higher. Equity has expanded over time alongside asset growth, supporting financial flexibility. Returns on equity are steady but modest (mid‑6% range in TTM/most recent annual), which suggests solid stability but not exceptional capital efficiency.

Cash Flow

Cash generation is positive, with TTM operating cash flow and free cash flow both solid in absolute terms; however, free cash flow declined sharply in TTM (about -16.5% growth) versus the prior annual period. Free cash flow is also only ~57% of TTM net income, pointing to weaker cash conversion recently. The positives are that cash conversion has been better in some prior years and the business remains consistently free-cash-flow positive, but the latest TTM softness lowers confidence in near-term cash flow momentum.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	311.51B	304.77B	287.27B	284.94B	263.11B	209.00B
Gross Profit	97.22B	93.55B	85.71B	81.35B	80.41B	63.36B
EBITDA	49.31B	42.91B	41.08B	40.84B	39.50B	28.97B
Net Income	26.12B	19.28B	21.83B	20.29B	18.30B	13.20B
Balance Sheet
Total Assets	470.87B	417.78B	441.16B	378.46B	370.84B	345.76B
Cash, Cash Equivalents and Short-Term Investments	120.46B	103.53B	121.64B	99.62B	109.26B	103.22B
Total Debt	37.65B	30.68B	48.53B	43.23B	58.62B	71.86B
Total Liabilities	139.29B	124.21B	137.44B	120.77B	138.70B	143.62B
Stockholders Equity	328.25B	290.67B	301.16B	255.36B	229.78B	200.21B
Cash Flow
Free Cash Flow	19.59B	28.07B	18.27B	8.65B	15.51B	18.45B
Operating Cash Flow	34.48B	43.71B	40.22B	23.62B	27.92B	27.41B
Investing Cash Flow	-9.45B	-15.60B	-21.12B	-15.65B	-10.47B	-14.99B
Financing Cash Flow	-29.22B	-44.88B	-6.28B	-22.95B	-19.31B	21.77B

Sumitomo Bakelite Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5152.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4203, the sentiment is Positive. The current price of 5152 is below the 20-day moving average (MA) of 5705.40, below the 50-day MA of 5427.40, and above the 200-day MA of 4811.01, indicating a bullish trend. The MACD of 161.69 indicates Negative momentum. The RSI at 68.66 is Neutral, neither overbought nor oversold. The STOCH value of 86.01 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4203.

Sumitomo Bakelite Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4202	80 Outperform	¥435.63B	10.54	9.34%	4.27%	-0.48%	-35.29%
4203	76 Outperform	¥527.48B	20.36	6.52%	1.82%	3.25%	-11.31%
4118	74 Outperform	¥333.84B	12.62	5.47%	3.41%	2.60%	9.50%
4631	65 Neutral	¥419.23B	12.96	8.14%	2.61%	-1.45%	―
4208	65 Neutral	¥281.95B	7.93	1.47%	4.29%	-7.45%	-71.68%
4182	64 Neutral	¥846.59B	-52.21	-1.15%	3.49%	-6.83%	-123.67%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%

Sumitomo Bakelite Co., Ltd. Corporate Events

Sumitomo Bakelite Lifts Full-Year Forecast on Strong Semiconductor Materials Demand

Sumitomo Bakelite Co., Ltd. has raised its consolidated financial forecast for the fiscal year ending March 31, 2026, citing stronger-than-expected demand for its semiconductor materials, especially in China and AI-related applications. The company now expects revenue of ¥316.5 billion, business profit of ¥34.0 billion, operating profit of ¥32.5 billion, and profit attributable to owners of parent of ¥25.5 billion, all above both its previous forecast and the prior year’s actual results, underscoring the positive impact of robust semiconductor demand on its earnings outlook and reinforcing its positioning in the semiconductor materials market.

The most recent analyst rating on (JP:4203) stock is a Buy with a Yen5951.00 price target. To see the full list of analyst forecasts on Sumitomo Bakelite Co., Ltd. stock, see the JP:4203 Stock Forecast page.

Sumitomo Bakelite Lifts Full-Year Profit Outlook on Strong Nine-Month Results

Sumitomo Bakelite reported consolidated revenue of ¥237.8 billion for the nine months ended December 31, 2025, with strong year-on-year growth in profit attributable to owners of the parent to ¥19.7 billion, despite a decline in business profit and operating profit versus the prior-year period. The company maintained a solid financial position with an equity ratio just under 70%, confirmed its year-end dividend plan including a commemorative component, and revised its full-year FY2025 forecast upward to ¥316.5 billion in revenue and ¥25.5 billion in profit attributable to owners of the parent, signaling confidence in earnings momentum and continued shareholder returns.

The most recent analyst rating on (JP:4203) stock is a Buy with a Yen5951.00 price target. To see the full list of analyst forecasts on Sumitomo Bakelite Co., Ltd. stock, see the JP:4203 Stock Forecast page.

Sumitomo Bakelite to Acquire Kyocera Chemical Unit Spinoff to Bolster Semiconductor Materials Business

Sumitomo Bakelite has resolved to acquire all shares of a new company to be established by Kyocera Corporation that will assume part of Kyocera’s chemical business, including epoxy resin molding compounds for semiconductor encapsulation, bonding pastes for semiconductor devices, and industrial-use resins. The acquisition, which will make the new entity a wholly owned subsidiary, is intended to strengthen Sumitomo Bakelite’s technological capabilities, bolster its presence in the ICT domain, and enhance its position in fast-growing markets such as AI data center applications, while contributing to the execution of its Medium-Term Business Plan 2024–26 and long-term Vision 2030; the transferred business generated ¥23.2 billion in sales revenue in the fiscal year ended March 31, 2025, highlighting the deal’s potential to meaningfully scale the company’s operations.

The most recent analyst rating on (JP:4203) stock is a Buy with a Yen5951.00 price target. To see the full list of analyst forecasts on Sumitomo Bakelite Co., Ltd. stock, see the JP:4203 Stock Forecast page.

Sumitomo Bakelite Completes Treasury Stock Disposal to Employee Shareholding Association

Sumitomo Bakelite Co., Ltd. has completed the payment procedures for the disposal of treasury stock to its Employee Shareholding Association, a move initially resolved by the Board of Directors in May 2025. The company announced changes in the number of shares and total disposal value due to partial forfeiture of rights, reflecting the finalized number of members in the shareholding association, which impacts the company’s employee engagement and ownership structure.

The most recent analyst rating on (JP:4203) stock is a Hold with a Yen5496.00 price target. To see the full list of analyst forecasts on Sumitomo Bakelite Co., Ltd. stock, see the JP:4203 Stock Forecast page.