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

• Market Cap: ¥1.67B
• Dividend Yield: 3.65%
• Average Volume (3M): 7.06K
• Price to Earnings (P/E): 4.9
• Beta (1Y): 0.72
• Revenue Growth: 4.12%
• EPS Growth: 30.08%
• Country: JP
• Employees: 171
• Sector: Basic Materials
• Sector Strength: 68
• Industry: Chemicals - Specialty
• EPS (TTM): 282.14
• Shares Outstanding: 1,220,000
• 10 Day Avg. Volume: 1,440
• 30 Day Avg. Volume: 7,063
• PEG Ratio: 0.41
• Price to Book (P/B): 0.66
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 18.95
• 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

• Rating: 76 Outperform
• Price Target: ¥1,610.00 ▲(17.60%Upside)

Kawaguchi Chemical Industry Co., Ltd. maintains a strong valuation with an attractive P/E ratio and high dividend yield, making it appealing for value and income investors. Technical analysis shows bullish momentum, though the high RSI suggests caution for potential overbought conditions. While financial performance is generally solid, liquidity concerns due to high leverage and declining cash flows need attention.

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

Company Description

Kawaguchi Chemical Industry Co., Ltd. (4361) is a Japanese company engaged in the manufacturing and sale of chemical products. The company operates in various sectors, including industrial chemicals, specialty chemicals, and pharmaceuticals. Its core products include a range of chemical compounds and materials that are used in various applications such as adhesives, resins, and polymer additives. Kawaguchi Chemical Industry is known for its innovation in chemical solutions, targeting a diverse clientele in industries like automotive, electronics, and construction.

How the Company Makes Money

Kawaguchi Chemical Industry Co., Ltd. generates revenue primarily through the sale of its chemical products to a wide array of industries. The company's revenue streams include direct sales of industrial and specialty chemicals, which are essential in manufacturing processes across different sectors. Additionally, the company may engage in partnerships or collaborations with other firms to enhance its product offerings and market reach. Significant factors contributing to its earnings include its ability to innovate and create high-performance chemical solutions that meet the evolving needs of its customers. The company may also benefit from long-term supply agreements with key clients, ensuring a steady flow of income.

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
8.65B	8.92B	8.61B	8.37B	7.94B	6.63B
	Gross Profit
1.57B	1.61B	1.51B	1.50B	1.57B	1.17B
	EBIT
400.04M	378.14M	353.91M	293.87M	380.79M	80.88M
	EBITDA
556.11M	858.26M	765.47M	697.01M	789.17M	491.74M
	Net Income Common Stockholders
327.62M	336.27M	255.53M	218.86M	281.27M	59.35M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
910.00M	744.64M	1.04B	910.92M	1.32B	882.86M
	Total Assets
8.32B	8.53B	8.34B	8.32B	7.89B	7.19B
	Total Debt
3.17B	3.09B	3.26B	3.17B	3.20B	3.26B
	Net Debt
2.26B	2.35B	2.21B	2.26B	1.89B	2.38B
	Total Liabilities
5.91B	5.65B	5.70B	5.91B	5.64B	5.22B
	Stockholders Equity
2.41B	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: Neutral
• Last Price: 1369.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• 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 Neutral. The current price of 1369 is above the 20-day moving average (MA) of 1340.95, above the 50-day MA of 1264.88, and above the 200-day MA of 1368.61, indicating a neutral trend. The MACD of 26.37 indicates Positive momentum. The RSI at 52.83 is Neutral, neither overbought nor oversold. The STOCH value of 40.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
4625	78 Outperform	¥3.32B	14.56		2.71%	1.87%	-4.33%
4361	76 Outperform	¥1.67B	4.85		3.65%	4.12%	30.08%
4624	75 Outperform	¥4.96B	11.44		1.53%	2.02%	5.55%
4616	66 Neutral	¥1.68B	13.81		1.81%	-5.33%	-40.81%
4623	66 Neutral	¥6.47B	8.97		3.51%	0.26%	80.37%
Sector *	51 Neutral	$2.03B	-1.27	-21.09%	4.14%	2.90%	-30.49%
4615	42 Neutral	¥4.53B	20.50		―	9.52%	88.23%