Tri Chemical Laboratories Inc. (4369) AI Stock Analysis

• Market Cap: ¥123.33B
• Dividend Yield: 1.3%
• Average Volume (3M): 842.32K
• Price to Earnings (P/E): 21.4
• Beta (1Y): 1.16
• Revenue Growth: 47.56%
• EPS Growth: 49.58%
• Country: JP
• Employees: 274
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 38.31
• Shares Outstanding: 32,498,640
• 10 Day Avg. Volume: 589,290
• 30 Day Avg. Volume: 842,316
• PEG Ratio: 0.21
• Price to Book (P/B): 3.35
• Price to Sales (P/S): 5.60
• P/FCF Ratio: 174.89
• 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): 183.26
• Revenue Forecast (FY): ¥27.00B

• Rating: 74 Outperform
• Price Target: ¥4,228.00 ▲(56.01% Upside)
• Action: Reiterated Date: 02/27/26
• Date: Action: Reiterated 02/27/26

The score is driven primarily by strong financial performance (high margins and low leverage) and bullish technical trends (price above key moving averages with positive momentum). These positives are tempered by negative free cash flow in TTM and only moderate valuation support (P/E ~19.9 with a sub-1% dividend yield).

Positive Factors

High Profitability Margins

Consistently high gross and net margins reflect durable operating efficiency and pricing power in specialty-chemicals. These margins provide a structural earnings buffer versus input cost swings, support reinvestment and ROE over multiple quarters, and underpin long-term cash generation potential.

Very Low Financial Leverage

Extremely low debt levels leave the company financially flexible, lowering interest burden and increasing resilience to cyclical downturns. Strong ROE alongside low leverage suggests profitable capital deployment and capacity to fund capex, M&A or dividends without stressing the balance sheet.

Positive Revenue and EPS Trajectory

Stable revenue growth with materially stronger EPS expansion indicates operating leverage: modest sales gains are translating into outsized earnings improvement. This dynamic supports sustainable profitability and provides management room to prioritize investment or shareholder returns over the next several quarters.

Negative Factors

Negative Free Cash Flow

Negative free cash flow despite accounting profits indicates that cash available after operations and capex is constrained. Persisting negative FCF can limit capacity to fund growth, repay stakeholders or build reserves, forcing reliance on external financing or asset sales to support strategy.

Weak Cash Conversion

Low conversion of net income into operating cash suggests earnings are partly driven by noncash items or working-capital build. This reduces the reliability of reported profits as a source of funding, heightening liquidity and execution risk if receivables or inventories remain elevated.

Margin Erosion Risk

A downward shift in gross margin signals exposure to rising input costs or limited pricing power. If that trend continues, it could compress durable profitability and magnify the impact of negative FCF and weaker cash conversion, constraining investment capacity and long-term margin sustainability.

Tri Chemical Laboratories Inc. Business Overview & Revenue Model

Company Description

Tri Chemical Laboratories Inc. provides precursors for semiconductors, optical fibers, solar cells, and compound semiconductors. It also offers catalysts, special reagents, etc. In addition, the company provides containers, such as stainless-steel containers with valves, seamless cylinders for high pressure gas, glass ampoules, polyethylene bottles, glass bottles, and glass vial bottles. Tri Chemical Laboratories Inc. was incorporated in 1978 and is headquartered in Uenohara, Japan.

How the Company Makes Money

Tri Chemical Laboratories generates revenue through multiple streams, including the sale of specialty chemical products, analytical testing services, and consulting on regulatory compliance. The primary revenue comes from direct sales of its custom chemical formulations to agricultural businesses and industrial clients. Additionally, the company earns income from its laboratory services, which provide essential testing and analysis for clients in various sectors. Strategic partnerships with agricultural and industrial firms enhance its market reach, while ongoing investments in research and development allow Tri Chemical to innovate and introduce new products, further driving revenue growth.

Tri Chemical Laboratories Inc. Financial Statement Overview

Summary

Strong profitability (gross margin ~41–42%, net margin ~24% TTM) and a solid balance sheet with very low leverage (debt-to-equity 0.047) support the score. The main drag is cash generation: free cash flow is negative in TTM and cash conversion is only moderate (operating cash flow to net income 0.36).

Income Statement

Tri Chemical Laboratories Inc. shows strong profitability with a consistent gross profit margin around 41-42% and a net profit margin of 24% in TTM. Revenue growth is positive at 2.17% TTM, indicating stable demand. EBIT and EBITDA margins are healthy, reflecting efficient operations. However, the slight decline in gross profit margin from the previous year suggests potential cost pressures.

Balance Sheet

The company's balance sheet is robust with a low debt-to-equity ratio of 0.047, indicating low leverage and financial stability. Return on equity is strong at 17.64%, showcasing effective use of equity to generate profits. The equity ratio is solid, reflecting a strong capital structure. However, the slight increase in debt from the previous year warrants monitoring.

Cash Flow

Operating cash flow is positive, but free cash flow is negative in TTM, indicating potential cash management issues. The operating cash flow to net income ratio is moderate at 0.36, suggesting some conversion efficiency. The significant negative free cash flow to net income ratio highlights challenges in generating free cash flow, which could impact future investments.

Breakdown	TTM	Jan 2025	Jan 2024	Jan 2023	Jan 2022	Jan 2021
Income Statement
Total Revenue	23.81B	18.91B	11.25B	13.80B	11.57B	9.80B
Gross Profit	9.40B	8.01B	4.09B	5.58B	4.84B	4.38B
EBITDA	8.33B	6.63B	4.61B	7.42B	6.35B	5.17B
Net Income	5.76B	4.96B	2.47B	4.83B	4.10B	3.38B
Balance Sheet
Total Assets	42.19B	36.94B	31.86B	32.12B	28.29B	19.87B
Cash, Cash Equivalents and Short-Term Investments	5.42B	9.44B	10.50B	11.14B	8.03B	1.70B
Total Debt	4.24B	1.78B	2.40B	3.24B	4.28B	5.05B
Total Liabilities	7.67B	5.36B	4.29B	6.24B	6.97B	7.27B
Stockholders Equity	34.52B	31.59B	27.57B	25.88B	21.32B	12.60B
Cash Flow
Free Cash Flow	-5.86B	605.75M	1.19B	4.84B	2.71B	-872.24M
Operating Cash Flow	1.07B	3.68B	2.97B	6.39B	3.64B	2.09B
Investing Cash Flow	-7.69B	-3.12B	-1.78B	-1.56B	-932.88M	-2.96B
Financing Cash Flow	1.09B	-1.62B	-1.86B	-1.70B	3.59B	948.34M

Tri Chemical Laboratories Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2710.00
• 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:4369, the sentiment is Positive. The current price of 2710 is below the 20-day moving average (MA) of 3465.25, below the 50-day MA of 3185.30, and below the 200-day MA of 3012.77, indicating a bullish trend. The MACD of 137.59 indicates Negative momentum. The RSI at 71.76 is Negative, neither overbought nor oversold. The STOCH value of 84.86 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4369.

Tri Chemical Laboratories Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4187	80 Outperform	¥104.79B	14.05	10.57%	1.74%	15.12%	40.72%
4471	77 Outperform	¥131.48B	9.90	9.50%	3.33%	-17.97%	―
4116	76 Outperform	¥90.80B	12.64	―	3.04%	1.57%	-33.97%
4956	76 Outperform	¥90.44B	11.01	―	3.02%	1.66%	11.28%
4369	74 Outperform	¥123.33B	21.42	―	1.30%	47.56%	49.58%
4008	70 Outperform	¥98.75B	23.17	―	3.74%	-0.68%	-9.93%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%