Nippon Kayaku Co (4272) AI Stock Analysis

• Market Cap: ¥266.66B
• Dividend Yield: 4.03%
• Average Volume (3M): 383.85K
• Price to Earnings (P/E): 11.5
• Beta (1Y): 0.39
• Revenue Growth: 6.60%
• EPS Growth: 503.36%
• Country: JP
• Employees: 5,902
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals
• EPS (TTM): 47.78
• Shares Outstanding: 160,000,000
• 10 Day Avg. Volume: 382,940
• 30 Day Avg. Volume: 383,850
• PEG Ratio: 0.04
• Price to Book (P/B): 0.86
• Price to Sales (P/S): 1.04
• P/FCF Ratio: -61.86
• 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: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: ¥1,788.00 ▲(6.81% Upside)

Nippon Kayaku Co's stock is supported by strong financial performance and attractive valuation, with a reasonable P/E ratio and high dividend yield. However, technical indicators suggest the stock is currently overbought, which could lead to short-term volatility. The absence of earnings call data and corporate events does not impact the score significantly.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong demand for the company's products and effective market strategies, supporting long-term business expansion.

Profitability Margins

Improved profitability margins reflect effective cost management and pricing strategies, enhancing the company's ability to generate sustainable profits.

Financial Stability

A high equity ratio suggests financial resilience, providing a buffer against economic fluctuations and supporting long-term operational stability.

Negative Factors

Negative Free Cash Flow

Negative free cash flow indicates potential difficulties in managing capital expenditures, which could impact the company's ability to invest in growth opportunities.

Stockholders' Equity Decrease

A decrease in stockholders' equity may signal challenges in maintaining shareholder value, potentially affecting investor confidence and future capital raising.

Operational Efficiency Pressure

A decrease in EBITDA margin suggests potential pressure on operational efficiency, which may affect profitability if not addressed.

Nippon Kayaku Co Business Overview & Revenue Model

Company Description

Nippon Kayaku Co., Ltd. (4272) is a Japanese company primarily engaged in the manufacturing and sale of specialty chemicals and pharmaceuticals. Established in 1916, it operates through various segments, including the Pharmaceuticals segment, which focuses on the development of innovative drugs, and the Chemicals segment, which produces a range of chemical products for diverse applications, such as food additives, agricultural chemicals, and resin materials. The company is recognized for its commitment to research and development, driving advancements in medical and chemical technologies.

How the Company Makes Money

Nippon Kayaku generates revenue through multiple streams, with its primary sources being the sale of pharmaceuticals and specialty chemicals. The Pharmaceuticals segment contributes significantly to the company's earnings through the commercialization of proprietary drugs and licensed products, often supported by research collaborations and partnerships with other pharmaceutical firms. Additionally, the Chemicals segment profits from the production and sale of chemical products used in various industries, including agriculture and food production. Strategic partnerships with research institutions and other companies enhance its product offerings and market reach, further driving revenue growth. The company also invests in R&D to innovate and expand its product lines, which helps maintain its competitive edge and ensures a steady flow of income.

Nippon Kayaku Co Financial Statement Overview

Summary

Nippon Kayaku Co exhibits strong financial performance with consistent revenue growth and improved profitability margins. The balance sheet reflects financial stability with a strong equity base and manageable debt levels. However, the negative free cash flow in 2025 highlights potential challenges in cash management and capital expenditure optimization.

Income Statement

Nippon Kayaku Co has shown consistent revenue growth, with a 10.3% increase in revenue from 2024 to 2025. The gross profit margin for 2025 is robust at 32.1%, and the net profit margin improved significantly from 2.0% in 2024 to 7.9% in 2025. The EBIT margin is strong at 9.2%, demonstrating effective cost management. However, the EBITDA margin decreased slightly from 10.8% in 2024 to 16.3% in 2025, indicating slight pressure on operational efficiency.

Balance Sheet

The company maintains a strong equity position with an equity ratio of 71.6% in 2025, indicating financial stability. The debt-to-equity ratio is moderate at 0.16, showcasing prudent leverage management. The return on equity improved to 6.5% in 2025 from 1.5% in 2024, indicating enhanced shareholder value creation. Despite these strengths, the decrease in stockholders' equity from 2024 to 2025 warrants attention.

Cash Flow

Nippon Kayaku Co's operating cash flow to net income ratio is healthy at 1.46 in 2025, reflecting strong cash generation relative to earnings. However, the free cash flow turned negative in 2025, raising concerns about capital expenditure management. The free cash flow to net income ratio is also negative at -0.21, suggesting challenges in converting profits into free cash flows.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	223.70B	222.58B	201.79B	198.38B	184.81B	173.38B
Gross Profit	70.83B	71.48B	61.30B	66.75B	63.97B	56.32B
EBITDA	34.30B	36.31B	21.73B	35.32B	37.88B	31.10B
Net Income	18.23B	17.51B	4.11B	14.98B	17.18B	12.57B
Balance Sheet
Total Assets	375.50B	373.71B	363.17B	322.86B	315.46B	294.54B
Cash, Cash Equivalents and Short-Term Investments	60.36B	59.76B	66.18B	54.35B	53.65B	48.12B
Total Debt	47.09B	42.10B	31.45B	19.58B	16.65B	19.40B
Total Liabilities	113.50B	105.19B	92.63B	67.83B	69.03B	66.26B
Stockholders Equity	261.06B	267.53B	269.56B	254.02B	245.48B	227.50B
Cash Flow
Free Cash Flow	0.00	-3.73B	7.41B	7.05B	13.67B	10.88B
Operating Cash Flow	0.00	25.53B	23.24B	20.04B	23.14B	24.41B
Investing Cash Flow	0.00	-27.31B	-19.41B	-15.16B	-10.64B	-17.61B
Financing Cash Flow	0.00	-4.76B	3.82B	-7.95B	-11.09B	-8.40B

Nippon Kayaku Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1674.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4272, the sentiment is Positive. The current price of 1674 is above the 20-day moving average (MA) of 1645.57, above the 50-day MA of 1516.52, and above the 200-day MA of 1372.38, indicating a bullish trend. The MACD of 47.32 indicates Positive momentum. The RSI at 67.66 is Neutral, neither overbought nor oversold. The STOCH value of 70.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4272.

Nippon Kayaku Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4368	76 Outperform	¥224.15B	17.39	―	1.22%	8.80%	33.39%
4041	74 Outperform	¥200.18B	12.74	―	4.14%	1.69%	0.94%
4045	74 Outperform	¥181.30B	19.02	4.41%	3.81%	-1.50%	-32.46%
4272	73 Outperform	¥266.66B	11.54	8.79%	4.03%	6.60%	503.36%
4114	71 Outperform	¥285.18B	18.01	―	5.36%	-0.47%	25.41%
4061	64 Neutral	¥228.93B	-19.65	-4.00%	3.73%	0.24%	-234.36%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%

Nippon Kayaku Co Corporate Events

Nippon Kayaku Reports Strong Profit Growth in Semiannual Results

Nippon Kayaku Co., Ltd. reported its semiannual consolidated financial results for the second quarter of the fiscal year ending March 31, 2026, showing a 4.1% increase in net sales compared to the previous year. Despite a decrease in operating and ordinary income, the profit attributable to owners of the parent surged by 95.7%, reflecting a strong performance in profitability. The company also announced a dividend increase, with a scheduled payment of 30 yen per share at the end of the second quarter, indicating a stable return for shareholders.

Nippon Kayaku Revises Business Forecasts Upward Amid Strong Market Performance

Nippon Kayaku Co., Ltd. has revised its business results forecasts for the fiscal year ending March 31, 2026, citing better-than-expected performance in the semiconductor and automotive markets. The company anticipates increased net sales, operating income, and ordinary income due to optimized selling prices and reduced costs, with a significant rise in profit attributable to owners of the parent driven by gains on sales of investment securities.

Nippon Kayaku Reports Increased Sales but Decline in Income for First Half of Fiscal Year

Nippon Kayaku Co., Ltd. reported a 4.1% increase in net sales for the first half of the fiscal year ending March 31, 2026, compared to the same period last year. Despite the rise in sales, the company experienced a decline in operating and ordinary income, while profit attributable to owners of the parent surged by 95.7%. The company’s financial position remains stable with a slight increase in total assets and net assets. Dividend payments are scheduled to start on December 1, 2025, with no changes to the most recent dividend forecast.

Nippon Kayaku Co. Announces Treasury Stock Acquisition

Nippon Kayaku Co., Ltd. announced the acquisition of 1,374,600 of its common shares from the open market on the Tokyo Stock Exchange, with a total acquisition cost of 1,917,072,800 yen. This move is part of a broader strategy authorized by the Board of Directors to acquire up to 14 million shares, representing 8.76% of the total issued shares, to enhance shareholder value and optimize capital structure.

Nippon Kayaku Completes Treasury Share Disposal for Employee Compensation

Nippon Kayaku Co., Ltd. has completed the payment procedures for the disposal of treasury shares as restricted stock compensation for its Employee Shareholding Association. The number of shares to be disposed of has been adjusted due to partial forfeiture, resulting in a slight decrease in the total value of shares disposed. This adjustment reflects the completion of consent confirmation for the employee stock incentive program, impacting the company’s financial operations and aligning with its strategic employee engagement initiatives.

Nippon Kayaku Announces Treasury Stock Acquisition

Nippon Kayaku Co., Ltd. has announced the acquisition of its own shares in the market, following the provisions of the Companies Act. The company acquired 853,100 common shares at a total cost of 1,233,077,100 yen through open market transactions on the Tokyo Stock Exchange from September 1 to September 30, 2025. This move is part of a broader resolution made by the Board of Directors to acquire up to 14 million shares, representing 8.76% of total issued shares, with a budget of up to 17 billion yen, during the period from April 14, 2025, to March 31, 2026.

Nippon Kayaku Announces Executive Role Change

Nippon Kayaku Co., Ltd. announced a change in executive duties effective November 1, 2025. Shinji Inoue, currently a Member of the Board and Managing Director, will continue in his role with a revised focus, excluding the Purchasing Division from his responsibilities. This change may streamline operations and enhance focus on core divisions, potentially impacting the company’s strategic planning and stakeholder engagement.