Nippon Chemiphar Co., Ltd. (4539) AI Stock Analysis

• Market Cap: ¥6.33B
• Dividend Yield: 3.21%
• Average Volume (3M): 2.30K
• Price to Earnings (P/E): 11.6
• Beta (1Y): 0.30
• Revenue Growth: 4.25%
• EPS Growth: N/A
• Country: JP
• Employees: 887
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 34.21
• Shares Outstanding: 4,261,420
• 10 Day Avg. Volume: 1,680
• 30 Day Avg. Volume: 2,300
• PEG Ratio: -0.07
• Price to Book (P/B): 0.28
• Price to Sales (P/S): 0.16
• P/FCF Ratio: -2.87
• 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: 64 Neutral
• Price Target: ¥1,878.00 ▲(18.49% Upside)
• Action: Reiterated Date: 11/05/25
• Date: Action: Reiterated 11/05/25

Nippon Chemiphar's overall stock score reflects a balanced view of its financial performance and valuation. While the company shows potential with improved profitability and a stable balance sheet, ongoing cash flow challenges and weak technical indicators weigh on the score. The reasonable valuation and attractive dividend yield are positive factors.

Positive Factors

Balanced leverage / capital structure

A debt-to-equity near 0.94 and a 38.5% equity ratio signal a balanced leverage profile that supports resilience through industry cycles. This durable capital structure preserves financial flexibility for R&D, manufacturing investments, and regulatory compliance in the long-lived pharma business.

Profitability turnaround

The shift from loss to a positive net margin and a recovering EBITDA margin indicate operational improvements and cost control. Sustained margin recovery strengthens ability to fund ongoing drug development and commercialization over the next several quarters, improving long-term viability.

Solid gross margin

A 26.8% gross margin provides structural product-level profitability that helps absorb SG&A and R&D spend. For a specialty/generic drug manufacturer, this margin level underpins sustainability of operations and supports reinvestment into manufacturing and pipeline activities over time.

Negative Factors

Negative free cash flow

Persistent negative free cash flow and operating cash flow conversion problems constrain the firm's ability to self-fund R&D, capex and commercialization. Over months, this pressure can force reliance on external financing or limit strategic investments critical for long-cycle pharma projects.

Inconsistent revenue growth

Volatile top-line trends reduce predictability for product lifecycle planning and commercial investments. In a regulated domestic market like Japan, inconsistent revenues complicate forecasting for launches and capacity utilization, raising execution risk over the medium term.

Low operating and net margins

Subdued EBIT and net margins limit the company's ability to generate surplus cash and earn attractive returns on invested capital. Low profitability reduces capacity to fund higher-risk R&D or absorb pricing pressure, constraining durable growth prospects in the competitive pharma sector.

Nippon Chemiphar Co., Ltd. Business Overview & Revenue Model

Company Description

Nippon Chemiphar Co., Ltd., together with its subsidiaries, manufactures, markets, imports, exports, and sells, ethical pharmaceuticals and diagnostic agents in Japan and internationally. It offers diagnostic products, such as IgE NC, a diagnostic kit that provides results and reveals total IgE levels, as well as 57 individual allergen reagents; and DP3000, a device for allergen-specific IgE measurements. The company also develops NC-2400, a PPAR-delta agonist; NC-2500, a novel advanced xanthine oxidoreductase inhibitor for the treatment of hyperuricemia/gout; and NC-2600, a P2X4 receptor antagonist for the treatment of neuropathic pain. In addition, it develops NC-2700, a novel urate transporter 1 inhibitor that enhance excretion urate to urine; NC-2800, a delta opioid receptor agonist for the treatment of depression/anxiety; Uralyt-U, an alkalization therapeutic drug; Soleton, an analgesic and anti-inflammatory drug; and Calvan, a hypertension therapeutic drug. Further, the company provides quasi-drugs, nutrients, health foods, cosmetics, and various type of creams. It distributes its generic pharmaceuticals through wholesalers to hospitals and pharmacies. The company was formerly known as Hitachi Chemical Co., Ltd. and changed its name to Nippon Chemiphar Co., Ltd. in 1970. Nippon Chemiphar Co., Ltd. was founded in 1950 and is headquartered in Tokyo, Japan.

How the Company Makes Money

The company makes money primarily by selling pharmaceutical products in Japan. Its core revenue stream is sales of prescription drugs, where revenue is generated when products are shipped to wholesalers and/or medical-market channels and ultimately used by hospitals, clinics, and pharmacies. A secondary revenue stream can come from licensing and collaboration arrangements (e.g., out-licensing developed products, receiving milestone payments or royalties) and/or contract-related manufacturing/supply activities tied to its production capabilities; however, specific material partnerships, named counterparties, and product-by-product revenue breakdowns are null. Overall earnings are driven by the breadth and competitiveness of its product portfolio, the ability to maintain stable demand within Japan’s regulated pharmaceutical market, and cost control across manufacturing and commercialization.

Nippon Chemiphar Co., Ltd. Financial Statement Overview

Summary

Nippon Chemiphar shows mixed financial performance. The income statement indicates recovery with improved margins, but revenue growth is inconsistent. The balance sheet is stable with manageable leverage and a strong equity base. Cash flow issues persist with negative free cash flow, indicating liquidity challenges.

Income Statement

Nippon Chemiphar has shown inconsistent revenue growth with a 5.9% increase in the latest year after a decline in the previous year. The gross profit margin stands at 26.8%, which is moderate. However, the net profit margin has improved to 0.9% from a loss last year, indicating a positive turnaround in profitability. The EBITDA margin improved to 5.6%, showing healthier operational efficiency, but the EBIT margin remains low at 1.9%.

Balance Sheet

The company's debt-to-equity ratio of 0.94 indicates a balanced leverage profile. The return on equity is 1.5%, reflecting modest profitability relative to shareholder equity. The equity ratio of 38.5% suggests a solid capital structure, providing stability despite the modest ROE.

Cash Flow

The company faced a free cash flow deficit, although the negative growth rate has slightly improved from the previous year. The operating cash flow to net income ratio is negative due to operating cash flow being negative, indicating potential liquidity challenges. The free cash flow to net income ratio is also negative, signaling difficulties in converting profits into cash.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	32.82B	32.57B	30.75B	31.56B	32.51B	31.54B
Gross Profit	8.93B	8.75B	7.74B	8.19B	9.07B	11.44B
EBITDA	2.01B	1.83B	1.40B	2.10B	2.68B	2.23B
Net Income	395.00M	294.00M	-180.00M	339.00M	700.00M	495.00M
Balance Sheet
Total Assets	52.68B	49.85B	49.55B	48.57B	49.45B	47.12B
Cash, Cash Equivalents and Short-Term Investments	9.69B	7.02B	9.20B	10.53B	11.64B	10.58B
Total Debt	19.02B	18.06B	16.98B	15.23B	14.79B	15.37B
Total Liabilities	33.76B	30.68B	31.08B	30.03B	30.95B	29.11B
Stockholders Equity	18.92B	19.17B	18.46B	18.53B	18.50B	18.01B
Cash Flow
Free Cash Flow	0.00	-1.86B	-2.34B	-1.93B	1.07B	-85.00M
Operating Cash Flow	0.00	-265.00M	296.00M	-916.00M	1.80B	1.50B
Investing Cash Flow	0.00	-1.66B	-3.14B	-394.00M	35.00M	-1.02B
Financing Cash Flow	0.00	-305.00M	1.45B	144.00M	-793.00M	29.00M

Nippon Chemiphar Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1585.00
• 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:4539, the sentiment is Positive. The current price of 1585 is below the 20-day moving average (MA) of 1758.00, below the 50-day MA of 1726.38, and below the 200-day MA of 1597.64, indicating a neutral trend. The MACD of 1.93 indicates Positive momentum. The RSI at 51.34 is Neutral, neither overbought nor oversold. The STOCH value of 54.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4539.

Nippon Chemiphar Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4574	66 Neutral	¥14.72B	16.22	―	―	-5.41%	―
4524	65 Neutral	¥9.38B	15.24	―	2.55%	3.23%	42.87%
4539	64 Neutral	¥6.33B	11.64	―	3.21%	4.25%	―
4577	63 Neutral	¥44.63B	18.30	―	2.75%	7.56%	-48.91%
4538	60 Neutral	¥20.96B	5.79	―	3.71%	7.50%	-281.41%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
4512	48 Neutral	¥12.11B	7.11	―	1.06%	5.42%	-62.03%