MUROMACHI CHEMICALS INC. (4885) AI Stock Analysis

• Market Cap: ¥2.76B
• Dividend Yield: 3.35%
• Average Volume (3M): 5.16K
• Price to Earnings (P/E): 12.4
• Beta (1Y): 0.60
• Revenue Growth: 4.46%
• EPS Growth: -27.46%
• Country: JP
• Employees: 205
• Sector: Basic Materials
• Sector Strength: 61
• Industry: Chemicals
• EPS (TTM): -1.97
• Shares Outstanding: 4,095,500
• 10 Day Avg. Volume: 5,750
• 30 Day Avg. Volume: 5,163
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥804.00
• Price Target Upside: 7.63% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 65 Neutral
• Price Target: ¥804.00 ▲(7.63% Upside)

Muromachi Chemicals Inc. has a solid valuation with a reasonable P/E ratio and a good dividend yield, which are the most significant strengths. However, the company faces challenges with profitability and cash flow, and the technical indicators suggest a bearish trend. These factors collectively result in a moderate overall stock score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective sales strategies, supporting long-term business expansion and stability.

Operational Efficiency

Stable gross profit margins reflect effective cost control, which is crucial for maintaining profitability and competitive pricing over time.

Leverage Management

Improved leverage management enhances financial stability and reduces risk, providing a stronger foundation for future growth and investment.

Negative Factors

Profitability Challenges

Decreasing net profit margins can impact long-term profitability, indicating potential issues with cost control or pricing power.

Cash Flow Issues

Reduced operating cash flow limits the company's ability to reinvest in growth opportunities and meet financial obligations, posing a risk to sustainability.

Free Cash Flow Concerns

Negative free cash flow suggests liquidity challenges, which can hinder the company's capacity to fund operations and strategic initiatives.

MUROMACHI CHEMICALS INC. Business Overview & Revenue Model

Company Description

MUROMACHI CHEMICALS INC. (4885) is a leading Japanese chemical manufacturer specializing in the production of high-performance materials and specialty chemicals. The company operates primarily in the sectors of pharmaceuticals, electronics, and advanced materials, offering a diverse range of products including fine chemicals, intermediates, and custom synthesis solutions tailored to meet the needs of various industries. MUROMACHI CHEMICALS is committed to innovation and sustainability, positioning itself as a crucial player in the global chemical market.

How the Company Makes Money

MUROMACHI CHEMICALS INC. generates revenue through multiple key streams, primarily by manufacturing and selling its specialty chemicals and high-performance materials to various industries, including pharmaceuticals, electronics, and automotive. The company leverages its expertise in research and development to create innovative products that meet specific customer demands, which allows it to command premium pricing. Additionally, MUROMACHI CHEMICALS benefits from long-term contracts and partnerships with major corporations in its target sectors, providing stability and predictability in its revenue. The company may also engage in joint ventures or collaborations that expand its market reach and enhance its product offerings, further contributing to its overall earnings.

MUROMACHI CHEMICALS INC. Financial Statement Overview

Summary

Muromachi Chemicals Inc. demonstrates strong revenue growth and operational efficiency, but faces challenges in profitability and cash flow management. While leverage is improving, high debt levels and declining cash flow metrics pose potential risks. Continued focus on cost control and cash generation will be crucial for future stability.

Income Statement

Muromachi Chemicals Inc. has shown consistent revenue growth over the years, with a notable increase from 2024 to 2025. The gross profit margin remains stable, indicating efficient cost management. However, the net profit margin has decreased, suggesting rising expenses or other financial pressures. EBIT and EBITDA margins are healthy, reflecting strong operational performance.

Balance Sheet

The company's debt-to-equity ratio has improved over time, indicating better leverage management, but it remains relatively high compared to industry standards. Return on equity has decreased, which may concern investors. The equity ratio is stable, suggesting a balanced asset structure.

Cash Flow

Operating cash flow has decreased significantly, impacting the company's ability to generate cash from operations. Free cash flow has turned negative, indicating potential liquidity issues. The free cash flow to net income ratio is concerning, suggesting challenges in converting profits into cash.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.65B	6.37B	6.29B	5.68B	4.94B
Gross Profit	1.91B	1.82B	1.75B	1.73B	1.63B
EBITDA	540.83M	623.23M	493.14M	543.84M	351.62M
Net Income	241.28M	330.20M	256.30M	456.27M	180.71M
Balance Sheet
Total Assets	5.26B	5.06B	4.95B	4.80B	4.61B
Cash, Cash Equivalents and Short-Term Investments	1.06B	1.05B	852.61M	865.36M	1.00B
Total Debt	1.65B	1.44B	1.57B	1.69B	2.04B
Total Liabilities	2.81B	2.79B	3.03B	3.12B	3.28B
Stockholders Equity	2.45B	2.27B	1.92B	1.68B	1.33B
Cash Flow
Free Cash Flow	-112.86M	398.53M	206.91M	354.57M	431.82M
Operating Cash Flow	215.95M	637.70M	317.19M	524.90M	487.67M
Investing Cash Flow	-340.50M	-232.23M	-162.41M	-176.28M	-57.73M
Financing Cash Flow	123.20M	-209.95M	-172.39M	-483.63M	-310.51M

MUROMACHI CHEMICALS INC. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 747.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4885, the sentiment is Negative. The current price of 747 is below the 20-day moving average (MA) of 747.85, below the 50-day MA of 759.00, and below the 200-day MA of 822.44, indicating a bearish trend. The MACD of -3.11 indicates Negative momentum. The RSI at 43.81 is Neutral, neither overbought nor oversold. The STOCH value of 28.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4885.

MUROMACHI CHEMICALS INC. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4531	73 Outperform	¥6.07B	8.46		3.26%	19.66%	-13.42%
4102	68 Neutral	¥3.09B	33.77		2.17%	-4.02%	-60.20%
4960	68 Neutral	¥4.85B	33.82		1.19%	-5.30%	-6.24%
4885	65 Neutral	¥2.76B	12.38		3.35%	4.46%	-27.46%
Sector *	61 Neutral	$10.29B	7.21	-0.06%	2.89%	2.87%	-36.73%
4124	56 Neutral	¥3.26B	129.05		1.12%	19.50%	―
4360	46 Neutral	¥5.03B	521.41		2.57%	1.73%	-914.83%