Arakawa Chemical Industries,Ltd. (4968) AI Stock Analysis

• Market Cap: ¥22.26B
• Dividend Yield: 4.37%
• Average Volume (3M): 40.08K
• Price to Earnings (P/E): 8.3
• Beta (1Y): 0.87
• Revenue Growth: 11.10%
• EPS Growth: N/A
• Country: JP
• Employees: 1,668
• Sector: Basic Materials
• Sector Strength: 73
• Industry: Chemicals - Specialty
• EPS (TTM): 18.99
• Shares Outstanding: 20,652,400
• 10 Day Avg. Volume: 53,030
• 30 Day Avg. Volume: 40,083
• PEG Ratio: 0.17
• Price to Book (P/B): 0.36
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 29.40
• 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: ¥1,203.00
• Price Target Upside: 11.60% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 62 Neutral
• 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. Business Overview & Revenue Model

Company Description

Arakawa 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 Money

Arakawa 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

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

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

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.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	80.24B	72.22B	79.43B	80.52B	70.57B
Gross Profit	16.09B	11.68B	11.57B	17.97B	16.69B
EBITDA	9.00B	4.76B	51.00M	6.50B	6.42B
Net Income	2.64B	-1.04B	-4.94B	1.50B	2.17B
Balance Sheet
Total Assets	122.30B	125.42B	119.03B	117.74B	105.76B
Cash, Cash Equivalents and Short-Term Investments	9.43B	11.58B	11.14B	10.37B	8.46B
Total Debt	39.38B	42.68B	35.27B	26.76B	21.99B
Total Liabilities	65.06B	68.50B	62.53B	55.16B	47.17B
Stockholders Equity	58.47B	56.13B	54.08B	59.18B	57.23B
Cash Flow
Free Cash Flow	712.00M	-5.70B	-6.69B	-2.43B	-2.34B
Operating Cash Flow	5.12B	1.16B	-575.00M	3.99B	3.69B
Investing Cash Flow	-3.24B	-7.14B	-6.05B	-7.40B	-7.30B
Financing Cash Flow	-4.70B	5.48B	6.67B	4.93B	1.35B

Arakawa Chemical Industries,Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1078.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4229	75 Outperform	¥18.83B	9.81		3.50%	0.78%	-5.93%
4275	74 Outperform	¥29.02B	10.99		2.95%	0.92%	-0.79%
4112	74 Outperform	¥24.79B	7.59		4.40%	9.75%	28.00%
4092	71 Outperform	¥18.88B	7.22		3.78%	0.79%	60.97%
4410	68 Neutral	¥20.86B	26.07		5.07%	9.40%	―
4968	62 Neutral	¥22.26B	8.34		4.37%	11.10%	―
Sector *	44 Neutral	AU$1.51B	-6.04	-41.37%	3.88%	-3.45%	-43.04%

Arakawa Chemical Industries,Ltd. Corporate Events

Arakawa Chemical Announces Director Retirement

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

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

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

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.