Showa Chemical Industry Co., Ltd. (4990) AI Stock Analysis

• Market Cap: ¥5.77B
• Dividend Yield: 1.22%
• Average Volume (3M): 4.78K
• Price to Earnings (P/E): 6.0
• Beta (1Y): 0.31
• Revenue Growth: 0.80%
• EPS Growth: 63.33%
• Country: JP
• Employees: 220
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 20.98
• Shares Outstanding: 11,979,000
• 10 Day Avg. Volume: 5,100
• 30 Day Avg. Volume: 4,780
• PEG Ratio: -0.38
• Price to Book (P/B): 0.58
• Price to Sales (P/S): 0.51
• P/FCF Ratio: 11.60
• 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: 68 Neutral
• Price Target: ¥594.00 ▲(23.75% Upside)
• Action: Reiterated Date: 10/30/25
• Date: Action: Reiterated 10/30/25

Showa Chemical Industry Co., Ltd. maintains a solid financial foundation with stable profitability and a strong equity position, which is the most significant factor in the overall score. Technical indicators suggest some short-term weakness, and valuation metrics indicate the stock is reasonably priced. The absence of earnings call data and corporate events does not affect the score.

Positive Factors

Strong balance sheet

A strong equity base and favorable debt metrics provide lasting financial flexibility. This reduces solvency risk, lowers funding costs, and allows the company to fund capex, acquisitions, or sustain dividends through cycles, supporting long-term resilience and strategic optionality.

Consistent revenue growth

A multi-year revenue growth trend reflects underlying demand for products and steady market adoption. Sustained top-line expansion supports reinvestment in R&D and capacity, helps dilute fixed costs, and underpins long-term cash generation even if near-term margin pressure emerges.

Stable cash generation

Consistent operating cash conversion supports enduring financial health: it funds maintenance capex, services debt, and enables shareholder returns without relying on external financing. Even with some growth slowdown, stable cash flow is a durable support for operations and investments.

Negative Factors

Declining EBIT margin

A falling EBIT margin signals pressure on core operating efficiency or rising input costs. Sustained margin compression would reduce reinvestment capacity and cash available for strategic initiatives, making profitability more sensitive to cyclical swings and competitive pricing pressures.

Free cash flow volatility

Variable free cash flow can constrain planning for capex, dividends, and debt reduction. Structural volatility increases financing uncertainty, forces more conservative capital allocation, and can limit the company's ability to pursue longer-term growth projects or absorb prolonged market stress.

Modest scale of operations

A relatively small workforce suggests limited operational scale versus larger specialty chemical peers. This may restrict R&D throughput, global commercial reach, and operational redundancy, potentially hindering the company’s ability to scale quickly or compete on costs in capital-intensive markets.

Showa Chemical Industry Co., Ltd. Business Overview & Revenue Model

Company Description

Showa Chemical Industry Co., Ltd. (4990) is a leading manufacturer in the chemical industry, specializing in the production of a wide range of chemical products including synthetic resins, fine chemicals, and specialty chemicals. The company operates in various sectors such as automotive, electronics, pharmaceuticals, and agriculture, providing innovative solutions that cater to diverse industrial needs. With a strong commitment to research and development, Showa Chemical Industry focuses on sustainability and high-quality product offerings to meet the evolving demands of its global clientele.

How the Company Makes Money

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Showa Chemical Industry Co., Ltd. Financial Statement Overview

Summary

Showa Chemical Industry Co., Ltd. demonstrates financial robustness with stable profitability and a strong equity base. Despite some recent challenges in revenue and profit margins, the overall financial health remains solid, supported by effective cash flow management and prudent financial structuring.

Income Statement

Showa Chemical Industry Co., Ltd. displayed consistent revenue growth over the years, with a slight dip in revenue and profit margins in the most recent period. The Gross Profit Margin and Net Profit Margin have been relatively stable, reflecting solid profitability. However, the declining EBIT margin indicates potential operational challenges.

Balance Sheet

The company maintains a strong equity position with a favorable Debt-to-Equity ratio, showcasing financial stability. The Return on Equity has been generally positive, indicating effective management of shareholder funds. The Equity Ratio suggests a healthy balance between debt and equity financing, minimizing financial risk.

Cash Flow

Cash flow analysis reveals stable Free Cash Flow, albeit with a recent decline in growth. The Operating Cash Flow to Net Income ratio indicates efficient cash generation relative to earnings. However, fluctuations in Free Cash Flow may suggest potential volatility in cash management.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	9.31B	9.24B	9.20B	9.23B	7.78B	7.68B
Gross Profit	2.88B	2.81B	2.91B	2.95B	2.46B	2.47B
EBITDA	858.58M	877.73M	1.07B	1.13B	799.10M	773.49M
Net Income	465.13M	411.84M	584.40M	616.53M	345.02M	292.11M
Balance Sheet
Total Assets	13.82B	13.66B	13.53B	13.04B	12.61B	12.32B
Cash, Cash Equivalents and Short-Term Investments	2.85B	3.17B	3.15B	2.99B	3.25B	3.11B
Total Debt	2.66B	2.88B	3.21B	3.64B	4.17B	4.34B
Total Liabilities	5.58B	5.54B	5.93B	6.28B	6.49B	6.55B
Stockholders Equity	8.25B	8.12B	7.60B	6.76B	6.12B	5.77B
Cash Flow
Free Cash Flow	0.00	404.05M	521.71M	371.53M	368.35M	612.49M
Operating Cash Flow	0.00	766.55M	825.52M	625.07M	518.79M	816.53M
Investing Cash Flow	0.00	-135.97M	-160.60M	-281.75M	-185.86M	-240.13M
Financing Cash Flow	0.00	-435.69M	-514.30M	-581.75M	-211.43M	239.24M

Showa Chemical Industry Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 480.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4990, the sentiment is Positive. The current price of 480 is below the 20-day moving average (MA) of 540.85, below the 50-day MA of 527.54, and below the 200-day MA of 493.64, indicating a bullish trend. The MACD of 5.76 indicates Positive momentum. The RSI at 54.28 is Neutral, neither overbought nor oversold. The STOCH value of 84.84 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4990.

Showa Chemical Industry Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4619	75 Outperform	¥49.76B	8.18	―	5.04%	-3.21%	27.18%
4623	72 Outperform	¥6.59B	7.93	―	3.50%	-8.27%	-3.23%
4990	68 Neutral	¥5.77B	5.98	―	1.22%	0.80%	63.33%
4624	66 Neutral	¥5.75B	6.39	―	1.39%	2.67%	37.55%
4119	66 Neutral	¥8.27B	2.66	―	2.84%	37.67%	-117.29%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
4615	44 Neutral	¥4.25B	-15.17	―	―	8.66%	-239.07%