Japan Pure Chemical Co., Ltd. (4973) AI Stock Analysis

• Market Cap: ¥27.49B
• Dividend Yield: 3.63%
• Average Volume (3M): 12.29K
• Price to Earnings (P/E): 16.9
• Beta (1Y): 0.55
• Revenue Growth: 18.02%
• EPS Growth: 18.04%
• Country: JP
• Employees: 49
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 140.06
• Shares Outstanding: 6,067,200
• 10 Day Avg. Volume: 9,200
• 30 Day Avg. Volume: 12,293
• PEG Ratio: 0.06
• Price to Book (P/B): 1.32
• Price to Sales (P/S): 1.43
• P/FCF Ratio: 35.90
• 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: 77 Outperform
• Price Target: ¥5,516.00 ▲(58.51% Upside)

The score is primarily supported by strong financial health (notably the debt-free balance sheet) and improved profitability. Technicals also support the stock, though overbought momentum signals elevate near-term pullback risk. Valuation is reasonable with a moderate P/E and a ~3% dividend yield.

Positive Factors

Debt-free balance sheet

Zero debt materially reduces financial risk and interest-rate sensitivity, giving management durable flexibility to fund capex, weather cyclicality, or return cash to shareholders without refinancing pressure. This strengthens long-term resilience versus leveraged peers.

Profitability rebound

A meaningful margin and ROE improvement indicates better product mix, pricing or cost control, boosting sustainable earnings power. If durable, higher margins support reinvestment and shareholder returns, improving the company’s competitive position in specialty chemicals.

Positive free cash flow conversion

Strong FCF conversion in 2025 shows the business can turn profit into cash to fund operations, dividends and selective reinvestment. Continued positive FCF supports capital allocation choices and reduces dependence on external funding over the medium term.

Negative Factors

Declining revenue trend

A multi-year top-line decline weakens the sustainability of recent profit gains, signalling potential demand erosion or lost share. Persistent revenue contraction limits scale economies and constrains long-term growth unless new markets, products, or contracts are secured.

Volatile operating cash flow

Inconsistent operating cash flow and OCF covering earnings by under 1x point to working-capital or timing stress. This volatility reduces predictability of cash available for capex, debt repayment or dividends, raising execution risk for strategic investments.

Modest gross margins

Relatively low gross margins in specialty chemicals provide limited buffer against raw-material inflation or price pressure. Margin sensitivity reduces ability to absorb cost shocks and may force trade-offs between margin protection and volume retention over the medium term.

Japan Pure Chemical Co., Ltd. Business Overview & Revenue Model

Company Description

Japan Pure Chemical Co., Ltd. develops, manufactures, and sells metal plating chemicals for electronic devices in Japan. The company provides gold electroplating formulation for semiconductor applications; gold electroplating formulation for PWB, connector, contact, and soldering uses; strike gold plating formulation that enhances the adherence of plated coatings; flash gold plating formulation for leadframe uses; and palladium electroplating formulation for connector, leadframe, and decorative uses. It also offers gold coating for soldering and wire bonding; electroless palladium plating formulation for wire bonding and soldering uses; and silver-plating formulations. In addition, the company provides non-cyanide immersion silver plating formulations on Cu surfaces; anti-microbial agents for plating tanks and drag-out tanks; impurity removal resin that removes Cu ions dissolved in Au and Pd bath solutions; and carbon filter that is applied to JPC plating chemicals. Additionally, it offers other surface treatment chemicals and stripping agents. Japan Pure Chemical Co., Ltd. was founded in 1971 and is based in Tokyo, Japan.

How the Company Makes Money

Japan Pure Chemical Co., Ltd. generates revenue primarily through the sale of its high-purity chemical products. The company's key revenue streams include supplying chemicals for electronic materials, which are crucial in the production of semiconductors and other electronic components. Additionally, the company serves the automotive industry by providing chemicals that are used in various manufacturing processes. The pharmaceutical sector also contributes to the company's earnings, as its high-purity chemicals are essential for the development and production of medical compounds. Significant partnerships with major industrial players and a focus on innovation and quality assurance further enhance its market position and revenue generation capabilities.

Japan Pure Chemical Co., Ltd. Financial Statement Overview

Summary

Strong overall financial quality driven by a debt-free, conservative balance sheet and a meaningful 2025 profitability rebound. Offsetting factors are inconsistent revenue (declining over 2023–2025) and volatile cash flow conversion in the last two years, which raises questions about the durability of the earnings improvement.

Income Statement

Profitability improved meaningfully in the latest year, with net margin rising to ~12.5% (2025) from ~4.8% (2024) and returns strengthening, suggesting better mix, pricing, or cost control. However, the top line has been inconsistent: revenue declined in 2023–2025 (including ~-1.2% in 2025) after growth in 2021–2022, which tempers the quality of the earnings rebound. Gross margin remains modest (~9.7%–16.3% range over the period), indicating limited cushion if demand softens or input costs rise.

Balance Sheet

The balance sheet is very conservative with zero debt across all periods provided, which materially reduces financial risk and interest-rate sensitivity. Equity is substantial relative to total assets, and profitability on equity improved to ~11.6% in 2025 versus mid-single digits in prior years, indicating better earnings power on the capital base. The main drawback is that equity and assets have not shown clear, steady expansion over time, which may signal slower reinvestment or a more mature growth profile.

Cash Flow

Free cash flow is consistently positive in most years and was ~¥0.50B in 2025, but cash generation has been volatile: operating cash flow swung from very strong (2023) to much lower levels (2024–2025). Cash flow quality versus earnings is mixed—free cash flow was ~86% of net income in 2025 (reasonable), but operating cash flow covered net income by less than 1x in 2025, implying working-capital or timing headwinds. Overall, cash conversion is adequate but not consistently reliable year to year.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	12.94B	12.61B	11.42B	16.25B	18.71B	16.62B
Gross Profit	1.60B	1.63B	1.37B	1.58B	2.19B	1.96B
EBITDA	2.08B	2.26B	402.00M	651.98M	1.32B	1.06B
Net Income	1.44B	1.58B	548.26M	569.98M	974.20M	790.52M
Balance Sheet
Total Assets	15.98B	15.86B	17.14B	15.61B	16.87B	16.15B
Cash, Cash Equivalents and Short-Term Investments	7.00B	7.59B	6.16B	5.77B	4.03B	4.37B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	2.09B	2.26B	2.60B	2.11B	2.62B	2.90B
Stockholders Equity	13.89B	13.59B	14.54B	13.51B	14.24B	13.25B
Cash Flow
Free Cash Flow	0.00	500.71M	551.90M	2.52B	94.59M	332.71M
Operating Cash Flow	0.00	579.79M	684.68M	2.54B	180.01M	363.91M
Investing Cash Flow	0.00	1.52B	166.77M	19.76M	-93.61M	-40.68M
Financing Cash Flow	0.00	-676.56M	-457.99M	-824.05M	-425.58M	-447.16M

Japan Pure Chemical Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3480.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4973, the sentiment is Positive. The current price of 3480 is below the 20-day moving average (MA) of 4132.75, below the 50-day MA of 3662.50, and above the 200-day MA of 3202.18, indicating a bullish trend. The MACD of 342.68 indicates Negative momentum. The RSI at 75.82 is Negative, neither overbought nor oversold. The STOCH value of 72.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4973.

Japan Pure Chemical Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4229	81 Outperform	¥32.41B	14.61	―	2.47%	3.53%	8.36%
4064	80 Outperform	¥25.53B	8.73	―	3.21%	9.61%	173.72%
4973	77 Outperform	¥27.49B	16.86	―	3.63%	18.02%	18.04%
4113	69 Neutral	¥16.22B	9.47	―	3.23%	13.09%	89.45%
4092	66 Neutral	¥28.74B	12.65	―	3.84%	-3.41%	-12.83%
4409	66 Neutral	¥16.10B	13.14	―	2.78%	1.30%	-5.03%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%

Japan Pure Chemical Co., Ltd. Corporate Events

Japan Pure Chemical Highlights Revenue Sensitivity to Noble Metal Price Swings

In its financial results for the third quarter ended December 31, 2025, Japan Pure Chemical Co., Ltd. highlighted that its sales are heavily influenced by the mix between transactions involving noble metals with chemicals and those involving chemicals alone. Because noble metals are expensive and subject to substantial price fluctuations, their inclusion in the company’s product mix can cause large swings in reported sales, underscoring a revenue structure that is sensitive to commodity price volatility and product composition.

The most recent analyst rating on (JP:4973) stock is a Buy with a Yen4682.00 price target. To see the full list of analyst forecasts on Japan Pure Chemical Co., Ltd. stock, see the JP:4973 Stock Forecast page.

Japan Pure Chemical to Book ¥300 Million Extraordinary Gain from Sale of Investment Securities

Japan Pure Chemical Co., Ltd. has resolved to sell a portion of its holdings in listed equity securities, in line with its FY2025–2027 medium-term management plan to reduce specified investment shares to below 20% of net assets. The transaction is expected to generate an extraordinary gain of approximately ¥300 million in the fourth quarter of the fiscal year ending March 31, 2026, based on current market prices, and this impact has already been incorporated into the company’s full-year earnings forecast, signaling a planned and measured adjustment of its investment portfolio rather than a change in operating performance.

The most recent analyst rating on (JP:4973) stock is a Buy with a Yen4682.00 price target. To see the full list of analyst forecasts on Japan Pure Chemical Co., Ltd. stock, see the JP:4973 Stock Forecast page.