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Arakawa Chemical Industries,Ltd. (JP:4968)
:4968
Japanese Market
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Arakawa Chemical Industries,Ltd. (4968) AI Stock Analysis

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JP:4968

Arakawa Chemical Industries,Ltd.

(4968)

Rating:62Neutral
Price Target:
¥1,096.00
▲(1.67%Upside)
Arakawa Chemical Industries scores 62, driven primarily by its strong valuation and improving financial performance. Despite some bearish technical indicators, the stock's low P/E ratio and attractive dividend yield suggest potential undervaluation. Continued improvement in cash flow conversion could further enhance its financial outlook.

Arakawa Chemical Industries,Ltd. (4968) vs. iShares MSCI Japan ETF (EWJ)

Arakawa Chemical Industries,Ltd. Business Overview & Revenue Model

Company DescriptionArakawa Chemical Industries, Ltd. is a Japanese company engaged in the production and sale of chemical products, primarily focusing on the manufacturing of resins and chemicals for various industrial applications. The company operates in sectors such as paper chemicals, printing inks, adhesives, and electronic materials, providing specialized solutions to enhance performance and efficiency in these industries.
How the Company Makes MoneyArakawa Chemical Industries, Ltd. generates revenue through the sale of its chemical products, which are utilized in various industrial applications. The company's key revenue streams include the sale of resins and chemicals to manufacturers in the paper, printing ink, adhesive, and electronics industries. Arakawa Chemical Industries benefits from longstanding partnerships and customer relationships within these sectors, contributing to stable demand for their specialized chemical solutions. Additionally, the company's focus on research and development supports the creation of innovative products, allowing them to maintain a competitive edge and potentially capture new market opportunities.

Arakawa Chemical Industries,Ltd. Financial Statement Overview

Summary
Arakawa Chemical Industries has shown notable improvements in profitability and cash flow metrics. Revenue growth and margin recovery are positive, with significant improvements in EBIT and EBITDA margins. While balance sheet health is stable, the cash flow has improved but has potential for further enhancement in free cash flow conversion.
Income Statement
68
Positive
Arakawa Chemical Industries has shown a recovery in profitability. Current gross profit margin stands at 20.05%, and the net profit margin is 3.29%, indicating efficient cost management. Revenue has grown by 11.10% from the previous year, showcasing positive growth momentum. EBIT and EBITDA margins have significantly improved from negative to 1.32% and 11.22%, respectively, reflecting better operational efficiency and profitability.
Balance Sheet
60
Neutral
The company's financial leverage is moderate with a debt-to-equity ratio of 0.67, indicating a balanced approach to financing. Return on equity is modest at 4.52%, reflecting moderate efficiency in generating profits from shareholders' equity. The equity ratio is 47.81%, suggesting a healthy capital structure with substantial equity funding relative to total assets. The balance sheet shows improvement in equity and asset management.
Cash Flow
55
Neutral
The cash flow statement highlights a dramatic improvement in free cash flow, moving from a negative position in previous years to a free cash flow of ¥712 million. The operating cash flow to net income ratio is 1.94, indicating strong cash generation relative to reported earnings. However, the free cash flow to net income ratio remains low at 0.27, signaling some room for improvement in cash profitability.
BreakdownMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income Statement
Total Revenue80.24B72.22B79.43B80.52B70.57B
Gross Profit16.09B11.68B11.57B17.97B16.69B
EBITDA9.00B4.76B51.00M6.50B6.42B
Net Income2.64B-1.04B-4.94B1.50B2.17B
Balance Sheet
Total Assets122.30B125.42B119.03B117.74B105.76B
Cash, Cash Equivalents and Short-Term Investments9.43B11.58B11.14B10.37B8.46B
Total Debt39.38B42.68B35.27B26.76B21.99B
Total Liabilities65.06B68.50B62.53B55.16B47.17B
Stockholders Equity58.47B56.13B54.08B59.18B57.23B
Cash Flow
Free Cash Flow712.00M-5.70B-6.69B-2.43B-2.34B
Operating Cash Flow5.12B1.16B-575.00M3.99B3.69B
Investing Cash Flow-3.24B-7.14B-6.05B-7.40B-7.30B
Financing Cash Flow-4.70B5.48B6.67B4.93B1.35B

Arakawa Chemical Industries,Ltd. Technical Analysis

Technical Analysis Sentiment
Positive
Last Price1078.00
Price Trends
50DMA
1060.78
Positive
100DMA
1072.95
Positive
200DMA
1105.92
Positive
Market Momentum
MACD
10.51
Negative
RSI
67.47
Neutral
STOCH
90.63
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4968, the sentiment is Positive. The current price of 1078 is above the 20-day moving average (MA) of 1038.80, above the 50-day MA of 1060.78, and below the 200-day MA of 1105.92, indicating a bullish trend. The MACD of 10.51 indicates Negative momentum. The RSI at 67.47 is Neutral, neither overbought nor oversold. The STOCH value of 90.63 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4968.

Arakawa Chemical Industries,Ltd. Peers Comparison

Overall Rating
UnderperformOutperform
Sector (44)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
¥18.83B9.81
3.50%0.78%-5.93%
74
Outperform
¥29.02B10.99
2.95%0.92%-0.79%
74
Outperform
¥24.79B7.59
4.40%9.75%28.00%
71
Outperform
¥18.88B7.22
3.78%0.79%60.97%
68
Neutral
¥20.86B26.07
5.07%9.40%
62
Neutral
¥22.26B8.34
4.37%11.10%
44
Neutral
AU$1.51B-6.04-41.37%3.88%-3.45%-43.04%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:4968
Arakawa Chemical Industries,Ltd.
1,122.00
-10.94
-0.97%
JP:4092
Nippon Chemical Industrial Co., Ltd.
2,145.00
-260.35
-10.82%
JP:4112
Hodogaya Chemical Co., Ltd.
1,535.00
-927.14
-37.66%
JP:4229
Gun Ei Chemical Industry Co., Ltd.
2,857.00
-182.11
-5.99%
JP:4275
Carlit Holdings Co., Ltd.
1,221.00
-167.11
-12.04%
JP:4410
Harima Chemicals Group, Inc.
833.00
-86.64
-9.42%

Arakawa Chemical Industries,Ltd. Corporate Events

Arakawa Chemical Announces Director Retirement
May 14, 2025

Arakawa Chemical Industries, Ltd. has announced a management change with the retirement of Director Takashi Une, effective June 25, 2025, following the expiration of his term. This change is part of the company’s ongoing efforts to adapt its leadership structure, potentially impacting its strategic direction and stakeholder relations.

Arakawa Chemical Industries Increases Year-End Dividend for FY2025
May 14, 2025

Arakawa Chemical Industries, Ltd. announced an increase in its year-end dividend for the fiscal year ended March 31, 2025, raising it by 1 yen per share to 25 yen. This decision aligns with the company’s policy of actively returning value to shareholders and reflects its strong consolidated performance for FY2025.

Arakawa Chemical Reports Extraordinary Gains from Securities Sale
May 14, 2025

Arakawa Chemical Industries, Ltd. has reported extraordinary gains of 1,268 million yen from the sale of investment securities for the fiscal year ending March 31, 2025. These gains have been incorporated into the company’s consolidated financial results, potentially impacting its financial standing and market perception.

Arakawa Chemical Industries Reports Strong Financial Recovery in FY2025
May 14, 2025

Arakawa Chemical Industries, Ltd. reported a significant turnaround in its financial performance for the fiscal year ended March 31, 2025, with net sales increasing by 11.1% to 80,236 million yen and a return to profitability with a profit attributable to owners of the parent at 2,644 million yen. The company also improved its equity ratio to 47.8% and maintained a steady dividend payout, indicating a stable financial position and positive outlook for stakeholders.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 18, 2025