Gun Ei Chemical Industry Co., Ltd. (4229) AI Stock Analysis

• Market Cap: ¥32.41B
• Dividend Yield: 2.47%
• Average Volume (3M): 9.58K
• Price to Earnings (P/E): 14.6
• Beta (1Y): 0.68
• Revenue Growth: 3.53%
• EPS Growth: 8.36%
• Country: JP
• Employees: 543
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 108.69
• Shares Outstanding: 8,998,308
• 10 Day Avg. Volume: 9,850
• 30 Day Avg. Volume: 9,580
• PEG Ratio: -1.74
• Price to Book (P/B): 0.40
• Price to Sales (P/S): 0.65
• P/FCF Ratio: 14.35
• 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: 81 Outperform
• Price Target: ¥5,648.00 ▲(41.91% Upside)

The score is driven primarily by strong financial health (notably a robust, low-debt balance sheet and solid profitability/cash generation). Technicals support an ongoing uptrend, but overbought signals temper the outlook. Valuation is reasonable with a modest dividend yield, providing additional support.

Positive Factors

Balance sheet strength

A strong equity base and low debt provide durable financial flexibility: supports capital spending, weathering cyclical downturns, and sustaining dividends. Low leverage reduces refinancing risk and preserves strategic optionality over the next several quarters.

Consistent profitability

Sustained revenue and net income expansion with healthy margins indicates a resilient specialty-chemicals business model. Margin durability supports reinvestment and cash returns, and suggests competitive pricing or cost position that should remain relevant over months.

Cash generation and conversion

Strong operating cash flow and historically positive free cash flow demonstrate the company’s ability to convert earnings into cash, enabling capex, dividends, and debt repayment. This cash conversion underpins long-term financial resilience despite near-term FCF variability.

Negative Factors

Free cash flow decline

A reduction in free cash flow in 2025 weakens near-term internal funding for investment and shareholder returns. If the decline reflects structural working-capital or margin pressures, it could limit reinvestment and slow strategic initiatives over the coming quarters.

2025 revenue and profit dip

A downturn in revenue and profitability during 2025 signals potential demand softness or pricing/margin pressure in key end markets. If persistent, this could slow long-term growth and reduce margin sustainability, requiring either cost actions or product mix shifts.

Modest growth and limited scale

Modest ~3.5% revenue growth and a relatively small employee base suggest limited scale and slower organic expansion versus larger specialty-chemical peers. Smaller scale can constrain R&D, pricing leverage, and ability to absorb input-cost inflation over multiple quarters.

Gun Ei Chemical Industry Co., Ltd. Business Overview & Revenue Model

Company Description

Gun Ei Chemical Industry Co., Ltd., together with its subsidiaries, manufactures and sells synthetic resins and fibers in Japan and internationally. It offers RESITOP for photoresist, reactive polyimide, phenolic resins, and high purity bisphenol F, which are used in electronic materials; Resitop for shell molding; NFURAN, which is applied for curing of furan resin by acids as catalyst; a-system, a self-curing mold production system; and AR SAND that offers sand filling efficiency and mold strength. The company also provides functional phenolic resin, kynol novoloid fibers, spherical phenolic resins, s-RP nano sand, high purity bisphenol F, and Milex special phenolic resin that are used in industrial materials. In addition, it provides foods, such as starches and sugars; and business outsourcing and staffing services. Further, the company is involved in real estate activities; and the manufacture and sale of resin coated sand. Gun Ei Chemical Industry Co., Ltd. was founded in 1946 and is headquartered in Takasaki, Japan.

How the Company Makes Money

Gun Ei Chemical Industry Co., Ltd. generates revenue primarily through the sale of its chemical products to manufacturers in diverse industries such as textiles, automotive, and electronics. The company's revenue model is based on producing and supplying specialty chemicals, which are often customized to meet specific client requirements. Key revenue streams include bulk sales of dyes and pigments, as well as contract manufacturing services for specific chemical formulations. Additionally, strategic partnerships with major industrial players enhance its distribution capabilities and market reach, contributing to consistent earnings. The company may also benefit from long-term contracts and agreements with significant clients, ensuring a stable cash flow.

Gun Ei Chemical Industry Co., Ltd. Financial Statement Overview

Summary

Strong underlying fundamentals: solid income statement performance (85) with generally consistent revenue/profit growth despite a slight 2025 dip; a very robust balance sheet (90) with low leverage and high equity ratio; and stable cash generation (80) with positive free cash flow, though FCF declined in 2025.

Income Statement

Gun Ei Chemical Industry Co., Ltd. shows strong performance in its income statement with consistent revenue and net income growth over the years. The gross profit margin and net profit margin indicate healthy profitability. Despite a slight dip in revenue and profitability in 2025, the overall trajectory remains positive.

Balance Sheet

The company maintains a robust balance sheet, characterized by a strong equity base and low debt levels. The debt-to-equity ratio is particularly favorable, reflecting financial stability. The equity ratio is high, indicating a solid capital structure and low financial risk.

Cash Flow

Cash flow analysis reveals a stable operating cash flow with positive free cash flow generation, although there was a decline in free cash flow in 2025. The operating cash flow to net income ratio remains strong, highlighting the company's ability to convert profits into cash effectively.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	30.64B	30.55B	30.31B	31.39B	29.41B	25.19B
Gross Profit	6.55B	6.53B	6.88B	5.91B	6.70B	6.03B
EBITDA	4.44B	4.42B	4.62B	3.41B	4.35B	4.01B
Net Income	1.85B	1.92B	2.04B	1.20B	1.93B	1.61B
Balance Sheet
Total Assets	63.24B	63.02B	61.01B	54.60B	54.68B	51.98B
Cash, Cash Equivalents and Short-Term Investments	11.17B	10.95B	9.55B	9.26B	10.69B	11.14B
Total Debt	657.00M	735.00M	690.00M	662.00M	633.00M	91.00M
Total Liabilities	11.35B	11.28B	10.73B	8.49B	9.78B	8.23B
Stockholders Equity	50.05B	49.75B	48.53B	44.56B	43.42B	42.20B
Cash Flow
Free Cash Flow	0.00	1.38B	1.82B	-533.00M	1.28B	2.29B
Operating Cash Flow	0.00	4.33B	3.64B	1.20B	2.45B	3.57B
Investing Cash Flow	0.00	-2.81B	-2.16B	-2.46B	-942.00M	-806.00M
Financing Cash Flow	0.00	-875.00M	-774.00M	-687.00M	-746.00M	-1.31B

Gun Ei Chemical Industry Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3980.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4229, the sentiment is Positive. The current price of 3980 is below the 20-day moving average (MA) of 4197.00, above the 50-day MA of 3927.40, and above the 200-day MA of 3300.92, indicating a bullish trend. The MACD of 210.92 indicates Negative momentum. The RSI at 75.83 is Negative, neither overbought nor oversold. The STOCH value of 85.08 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4229.

Gun Ei Chemical Industry Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4229	81 Outperform	¥32.41B	14.61	―	2.47%	3.53%	8.36%
4973	77 Outperform	¥27.49B	16.86	―	3.63%	18.02%	18.04%
4113	69 Neutral	¥16.22B	9.47	―	3.23%	13.09%	89.45%
4092	66 Neutral	¥28.74B	12.65	―	3.84%	-3.41%	-12.83%
4410	66 Neutral	¥24.76B	12.97	―	4.62%	7.19%	―
4968	64 Neutral	¥26.09B	15.04	―	4.27%	5.72%	28.92%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%