Kawaguchi Chemical Industry Co., Ltd. (4361) AI Stock Analysis

• Market Cap: ¥1.72B
• Dividend Yield: 4.2%
• Average Volume (3M): 1.80K
• Price to Earnings (P/E): 7.2
• Beta (1Y): 0.67
• Revenue Growth: -0.77%
• EPS Growth: -29.54%
• Country: JP
• Employees: 171
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 9.79
• Shares Outstanding: 1,220,000
• 10 Day Avg. Volume: 3,060
• 30 Day Avg. Volume: 1,800
• PEG Ratio: 0.16
• Price to Book (P/B): 0.59
• Price to Sales (P/S): 0.19
• P/FCF Ratio: -7.93
• 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: 79 Outperform
• Price Target: ¥1,812.00 ▲(28.42% Upside)

The overall stock score is driven by strong technical indicators and attractive valuation metrics. The stock's bullish trend and low P/E ratio suggest potential for price appreciation. However, financial performance is moderated by high leverage and declining cash flow, which are areas for improvement.

Positive Factors

Revenue Growth

Consistent revenue growth indicates the company's ability to expand its market presence and adapt to industry demands, supporting long-term stability.

Return on Equity

A strong ROE reflects efficient management and the company's capacity to generate profits from shareholders' investments, enhancing investor confidence.

Operational Stability

Stable operational performance with consistent revenue and income growth suggests effective cost management and strategic market positioning.

Negative Factors

High Leverage

High leverage can increase financial risk, potentially impacting the company's ability to invest in growth opportunities and manage economic downturns.

Declining Free Cash Flow

Declining free cash flow may constrain the company's ability to fund operations and investments, posing a risk to long-term financial health.

Moderate Net Profit Margin

A moderate net profit margin indicates potential inefficiencies or cost pressures, which could limit the company's profitability and competitive edge.

Kawaguchi Chemical Industry Co., Ltd. Business Overview & Revenue Model

Company Description

Kawaguchi Chemical Industry Co., Ltd manufactures and sells fine chemicals in Japan. The company offers organic rubber chemicals, such as vulcanization accelerators, antioxidants, curing agents, and other rubber chemicals; and plastic chemicals, including antioxidants and polymerization inhibitors. It also provides dye pigment, pharmaceutical, and agrochemical intermediates; photo chemicals; and lubricant additives and corrosion inhibitors. Kawaguchi Chemical Industry Co., Ltd was founded in 1935 and is headquartered in Chiyoda, Japan.

How the Company Makes Money

Kawaguchi Chemical Industry Co., Ltd. generates revenue through the sale of its chemical products, which include specialty resins, adhesives, and coatings that serve various industrial applications. The company has established key revenue streams through long-term contracts with major manufacturers in sectors such as automotive and electronics, where reliable and high-performance materials are crucial. Additionally, Kawaguchi Chemical invests in research and development to create innovative products that meet specific customer demands, thereby enhancing its market competitiveness. Strategic partnerships with other chemical manufacturers and suppliers further bolster its revenue by expanding its distribution channels and product offerings. Overall, the company’s ability to adapt to market trends and customer needs plays a significant role in driving its earnings.

Kawaguchi Chemical Industry Co., Ltd. Financial Statement Overview

Summary

Kawaguchi Chemical Industry Co., Ltd. exhibits strong revenue growth and operational stability with a solid return on equity. However, the company faces challenges with high leverage and declining free cash flow, which could impact its liquidity position. The overall financial health is solid, but attention should be given to improving cash flow metrics and managing debt levels.

Income Statement

The company has demonstrated consistent revenue growth over the years, with a robust increase in net income and gross profit margin. The revenue growth from 2023 to 2024 is approximately 3.6%, showcasing positive momentum. The gross profit margin stands at about 18.1%, indicating efficient cost management. However, the net profit margin is moderate at 3.8%, suggesting room for profitability improvement. The EBIT margin of 4.2% and EBITDA margin of 9.6% reflect stable operational performance.

Balance Sheet

The balance sheet shows a stable equity base with stockholders' equity at 33.8% of total assets, indicating a healthy equity ratio. The debt-to-equity ratio is relatively high at 1.07, indicating significant leverage. Return on Equity is strong at 11.7%, demonstrating effective use of equity to generate profits. While the equity ratio is healthy, the high leverage could pose risks if not managed properly.

Cash Flow

The cash flow analysis reveals a decline in free cash flow, with negative free cash flow growth compared to the previous year. The operating cash flow to net income ratio is 0.43, indicating moderate cash generation relative to net income. The company needs to focus on improving its free cash flow to net income ratio, which is currently negative, highlighting potential liquidity challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.82B	8.92B	8.61B	8.37B	7.94B	6.63B
Gross Profit	1.59B	1.61B	1.51B	1.50B	1.57B	1.17B
EBITDA	762.65M	858.26M	765.47M	697.01M	789.17M	491.74M
Net Income	239.77M	336.27M	255.53M	218.86M	281.27M	59.35M
Balance Sheet
Total Assets	9.01B	8.53B	8.34B	8.32B	7.89B	7.19B
Cash, Cash Equivalents and Short-Term Investments	1.38B	744.64M	1.04B	910.92M	1.32B	882.86M
Total Debt	3.64B	3.09B	3.26B	3.17B	3.20B	3.26B
Total Liabilities	6.05B	5.65B	5.70B	5.91B	5.64B	5.22B
Stockholders Equity	2.96B	2.88B	2.64B	2.41B	2.25B	1.97B
Cash Flow
Free Cash Flow	0.00	-214.14M	91.86M	-271.47M	520.95M	296.74M
Operating Cash Flow	0.00	143.37M	469.93M	-20.80M	785.46M	654.23M
Investing Cash Flow	0.00	-305.08M	-370.24M	-242.94M	-245.70M	-392.09M
Financing Cash Flow	0.00	-138.97M	20.86M	-162.17M	-119.43M	222.50M

Kawaguchi Chemical Industry Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1411.00
• 50DMA: Negative
• 100DMA: Negative
• 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:4361, the sentiment is Negative. The current price of 1411 is below the 20-day moving average (MA) of 1461.70, below the 50-day MA of 1500.07, and above the 200-day MA of 1360.85, indicating a neutral trend. The MACD of -27.75 indicates Positive momentum. The RSI at 36.41 is Neutral, neither overbought nor oversold. The STOCH value of 54.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4361.

Kawaguchi Chemical Industry Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4361	79 Outperform	¥1.72B	7.16	―	4.20%	-0.77%	-29.54%
4625	78 Outperform	¥3.85B	10.69	―	2.37%	1.79%	31.63%
4623	72 Outperform	¥6.48B	10.39	―	3.50%	-8.27%	-3.23%
4624	66 Neutral	¥5.47B	11.12	―	1.35%	2.67%	37.55%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
4616	59 Neutral	¥1.90B	15.85	―	2.34%	-2.27%	-12.76%
4615	44 Neutral	¥4.15B	-21.23	―	―	8.66%	-239.07%