Tokai Carbon Co (5301) AI Stock Analysis

• Market Cap: $210.14B
• Dividend Yield: 3.06%
• Average Volume (3M): 1.36M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.97
• Revenue Growth: -7.36%
• EPS Growth: -574.56%
• Country: JP
• Employees: 4,625
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 36.61
• Shares Outstanding: 225,171,140
• 10 Day Avg. Volume: 1,199,100
• 30 Day Avg. Volume: 1,362,263
• PEG Ratio: 0.01
• Price to Book (P/B): 0.68
• Price to Sales (P/S): 0.56
• P/FCF Ratio: 20.89
• Enterprise Value/Market Cap: 1.83
• Enterprise Value/Revenue: 1.14
• Enterprise Value/Gross Profit: 4.74
• Enterprise Value/Ebitda: -67.59
• 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: 54 Neutral
• Price Target: ¥1,047.00 ▲(5.97% Upside)

The overall stock score is primarily influenced by financial performance challenges, particularly in profitability, and a concerning valuation due to a negative P/E ratio. Technical analysis offers some hope with potential upward momentum, but the stock remains under pressure in the short term.

Positive Factors

Market Position

Tokai Carbon's leadership in the carbon industry provides a strong competitive advantage, ensuring sustained demand across diverse sectors.

Product Diversification

A diversified product portfolio allows Tokai Carbon to mitigate risks associated with dependency on a single product line, supporting long-term stability.

Cash Flow Stability

Strong operating cash flow indicates Tokai Carbon's ability to maintain operations and invest in growth, despite profitability challenges.

Negative Factors

Profitability Challenges

Declining revenue and net income highlight ongoing profitability issues, which could hinder Tokai Carbon's ability to invest in future growth.

Rising Debt Levels

Increased debt levels may strain financial flexibility and increase risk, potentially affecting Tokai Carbon's long-term financial health.

Negative Revenue Growth

Negative revenue growth indicates challenges in maintaining sales momentum, which could impact Tokai Carbon's market position and profitability.

Tokai Carbon Co Business Overview & Revenue Model

Company Description

Tokai Carbon Co., Ltd. manufactures and sells carbon-related products and services in Japan. It offers graphite electrodes for use in electric furnaces, such as direct current, alternating current, and refining furnaces; and carbon black, including SEAST, TOKABLACK, Aqua Black, and Thermal black varieties, which are used to reinforce the rubber in tires, as well as used as a black pigment in various black-colored products. It also provides fine carbon products comprising special graphite products that include isotropic graphite G/HK series, extruded graphite, SiC coated carbon, C/C composite, glassy carbon, solid SiC, carbon brush, and resin-impregnated graphite products, as well as furnace materials for silicon semiconductor, solar cell manufacturing, and other applications; and industrial furnaces and related products, which comprise silicon carbide heating elements, resistors, recryte SiC structural materials, and industrial furnaces for heat treatment of ceramics, electronic components, metals, glass, and others. In addition, it provides carbon and graphite products and solutions for various smelting applications; and friction materials, including sintered metal friction, paper friction, carbonaceous friction, sliding, resin, woven, and soft mold materials to regulate power transmission in industrial and construction machinery, as well as for use in brake and clutch parts of vehicles, such as motorbikes, trucks, buses, and trains. Further, the company offers anode materials for secondary lithium-ion batteries that are used in smartphones and electric cars. The company was formerly known as Tokai Electrode Mfg. Co. Ltd. and changed its name to Tokai Carbon Co., Ltd. in 1975. Tokai Carbon Co., Ltd. was founded in 1918 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Tokai Carbon generates revenue primarily through the sale of its core products, which include carbon black used in tires and rubber products, graphite electrodes for electric arc furnaces in steel production, and other specialty carbon materials. The company has established key partnerships with manufacturers in the automotive and steel industries, which are critical to its revenue streams. Additionally, Tokai Carbon benefits from economies of scale in production and a strong global distribution network, allowing it to optimize its pricing strategies and enhance profitability. Fluctuations in demand for its products, particularly in the steel and automotive sectors, alongside the global prices of raw materials, also play a significant role in its earnings.

Tokai Carbon Co Financial Statement Overview

Summary

Tokai Carbon Co faces significant challenges in profitability as indicated by the recent income statement. The balance sheet remains relatively stable, though increasing debt is a concern. Cash flow stability suggests operational resilience, but profitability issues need addressing for long-term sustainability.

Income Statement

The income statement shows a significant decline in revenue from 2023 to 2024, with a steep drop in net income leading to a negative net profit margin for 2024. Gross profit margin also decreased. Despite historical growth, the recent downturn indicates challenges in profitability and revenue growth.

Balance Sheet

The balance sheet reflects a reasonable debt-to-equity ratio and a stable equity base. However, the total debt has increased, impacting the company's leverage. The equity ratio remains healthy, indicating good asset coverage by equity.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth, yet operating cash flow remains relatively strong. The free cash flow to net income ratio is unfavorable due to negative net income, pointing to challenges in converting profits into cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	337.27B	350.11B	363.95B	340.37B	258.87B	201.54B
Gross Profit	81.30B	80.64B	98.73B	94.05B	70.73B	49.55B
EBITDA	-5.70B	-3.95B	80.78B	78.14B	54.52B	34.47B
Net Income	-51.86B	-56.74B	25.47B	22.42B	16.11B	1.02B
Balance Sheet
Total Assets	606.57B	640.75B	640.00B	576.47B	512.50B	459.71B
Cash, Cash Equivalents and Short-Term Investments	72.22B	92.21B	77.47B	70.91B	78.86B	67.17B
Total Debt	198.54B	199.11B	166.64B	171.45B	168.25B	158.64B
Total Liabilities	298.52B	315.60B	279.90B	275.60B	255.94B	234.89B
Stockholders Equity	274.56B	289.56B	324.49B	268.82B	229.21B	201.27B
Cash Flow
Free Cash Flow	0.00	9.36B	12.46B	-4.01B	8.54B	27.79B
Operating Cash Flow	0.00	64.47B	62.07B	41.20B	38.07B	55.02B
Investing Cash Flow	0.00	-70.78B	-47.63B	-49.90B	-35.28B	-44.30B
Financing Cash Flow	0.00	9.41B	-14.51B	-10.63B	1.21B	927.00M

Tokai Carbon Co Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 988.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5301, the sentiment is Neutral. The current price of 988 is above the 20-day moving average (MA) of 984.51, below the 50-day MA of 1014.01, and below the 200-day MA of 990.61, indicating a neutral trend. The MACD of -8.45 indicates Negative momentum. The RSI at 48.76 is Neutral, neither overbought nor oversold. The STOCH value of 85.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:5301.

Tokai Carbon Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4205	79 Outperform	¥354.93B	9.86	9.65%	3.91%	0.87%	16.71%
5302	69 Neutral	¥49.37B	8.55	10.88%	4.46%	-1.14%	34.15%
5304	65 Neutral	¥48.44B	12.32	―	4.32%	-31.99%	-44.75%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
4208	57 Neutral	¥250.42B	43.35	1.47%	4.29%	-7.45%	-71.68%
4182	55 Neutral	¥554.43B	-75.33	-1.15%	3.49%	-6.83%	-123.67%
5301	54 Neutral	$210.14B	-4.62	-14.04%	3.06%	-7.36%	-574.56%

Tokai Carbon Co Corporate Events

Tokai Carbon Co. Announces Reorganization of U.S. Subsidiaries

Tokai Carbon Co., Ltd. has announced a reorganization of its U.S. subsidiaries, integrating three wholly-owned subsidiaries into one entity to enhance business efficiency and competitiveness. The reorganization, effective January 1, 2026, will see the surviving company become a subsidiary of Tokai Carbon US Holdings Inc., strengthening group governance. The impact on the company’s fiscal results is expected to be insignificant.

Tokai Carbon Reports Extraordinary Income from Securities Sale

Tokai Carbon Co., Ltd. announced an extraordinary income gain in the third quarter of fiscal year 2025 from selling a portion of its investment securities, amounting to 4,124 million yen. This decision aligns with the company’s adherence to Japan’s Corporate Governance Code, ensuring the effectiveness and appropriateness of its investment holdings, potentially impacting its financial health and market positioning.

Tokai Carbon Reports Q3 Financial Results with Increased Profitability

Tokai Carbon Co., Ltd. reported its consolidated financial results for the third quarter of the fiscal year ending December 31, 2025, showing a decrease in net sales by 8.2% compared to the previous year. Despite the decline in sales, the company experienced a significant increase in quarterly net income attributable to owners of the parent company, which surged by 192.9%. This improvement in profitability indicates effective cost management and operational efficiency, which could positively impact the company’s market positioning and stakeholder confidence.

Tokai Carbon Revises FY2025 Earnings Forecast Amid Market Adjustments

Tokai Carbon Co., Ltd. has revised its consolidated earnings forecast for FY2025, noting a decrease in net sales due to reduced sales volume in the Carbon Black segment. However, the company expects an increase in operating and ordinary income owing to cost reductions and improved production efficiency, alongside a significant rise in net income from the sale of investment securities.

Tokai Carbon Announces 4th Series Bond Issuance

Tokai Carbon Co., Ltd. has announced the issuance of its 4th Series of Unsecured Straight Bonds, amounting to 10 billion yen, with a coupon rate of 1.663% per annum and a maturity date set for October 9, 2030. This move is part of Tokai Carbon’s strategic financial management, potentially enhancing its liquidity and financial stability, while also reflecting its strong credit ratings from major rating agencies.

Tokai Carbon Completes Strategic Acquisition in Thailand

Tokai Carbon Co., Ltd. has completed the acquisition of Bridgestone Carbon Black (Thailand) Co., Ltd., now renamed Thai Tokai Carbon Product Rojana Co., Ltd., in partnership with Thai Tokai Carbon Product Co., Ltd. This strategic move enhances Tokai Carbon’s footprint in the carbon black manufacturing sector, with the acquisition price set at 2,050,000,000 Thai Baht. The impact of this acquisition on Tokai Carbon’s consolidated performance is under evaluation, with further disclosures to be made as necessary.