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

• Market Cap: ¥37.18B
• Dividend Yield: 2.47%
• Average Volume (3M): 9.58K
• Price to Earnings (P/E): 16.6
• Beta (1Y): 0.67
• 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: 80 Outperform
• Price Target: ¥6,449.00 ▲(62.04% Upside)
• Action: Reiterated Date: 01/31/26
• Date: Action: Reiterated 01/31/26

The score is driven primarily by strong financial health (especially a robust balance sheet and solid profitability/cash conversion). Technicals are supportive due to a strong uptrend, but overbought momentum readings temper the outlook. Valuation is reasonable with a moderate P/E and a ~2.0% dividend yield.

Positive Factors

Robust Balance Sheet

Low leverage and a high equity ratio give the company durable financial flexibility. This capital structure reduces refinancing risk, supports steady dividend and capex funding, and provides a cushion through cyclical downturns, enabling long-term strategic investments.

Consistent Profitability & Margins

Sustained gross and net margins indicate underlying operating strength and potential pricing or cost advantages in specialty chemicals. Stable profitability supports reinvestment, R&D, and customer retention, improving resilience across business cycles and maintaining shareholder returns.

Strong Cash Conversion

Reliable conversion of earnings into cash underpins the company's ability to fund operations, capex, and distributions without heavy reliance on external financing. This supports medium-term sustainability of operations and strategic initiatives despite occasional FCF variability.

Negative Factors

Decline in Free Cash Flow (2025)

A drop in free cash flow in 2025 reduces available internal funds for expansion, debt reduction, or higher dividends. If the decline reflects working-capital swings or margin pressure, it could constrain strategic flexibility and slow reinvestment until cash generation stabilizes.

Modest Revenue Growth & 2025 Dip

Historical revenue growth is moderate, and the recent 2025 dip signals vulnerability to end-market fluctuations. Limited top-line momentum can constrain scale economies and reduce ability to invest aggressively, making long-term earnings expansion more dependent on efficiency gains.

Limited Segment/Strategic Disclosure

Absence of segment, customer concentration, or recent strategic disclosures reduces visibility into growth drivers and concentration risks. This opacity makes it harder to assess sustainability of margins and exposure to specific end-markets over the medium term.

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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
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 5106.75, below the 50-day MA of 4498.30, and above the 200-day MA of 3494.35, indicating a bullish trend. The MACD of 278.40 indicates Negative momentum. The RSI at 75.47 is Negative, neither overbought nor oversold. The STOCH value of 91.00 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	80 Outperform	¥37.18B	16.59	―	2.47%	3.53%	8.36%
4462	78 Outperform	¥40.59B	15.65	―	1.90%	2.15%	16.14%
4973	77 Outperform	¥29.14B	18.32	―	3.63%	18.02%	18.04%
4027	74 Outperform	¥39.50B	26.79	―	3.24%	1.83%	-8.54%
4112	67 Neutral	¥38.66B	16.63	―	2.37%	-11.70%	-54.82%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
4968	61 Neutral	¥30.20B	18.07	―	4.27%	5.72%	28.92%