SEC Carbon Ltd. (5304) AI Stock Analysis

• Market Cap: ¥44.54B
• Dividend Yield: 4.72%
• Average Volume (3M): 16.72K
• Price to Earnings (P/E): 10.5
• Beta (1Y): 0.94
• Revenue Growth: -27.68%
• EPS Growth: -43.78%
• Country: JP
• Employees: 271
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 33.54
• Shares Outstanding: 20,694,340
• 10 Day Avg. Volume: 16,070
• 30 Day Avg. Volume: 16,716
• PEG Ratio: -0.36
• Price to Book (P/B): 0.57
• Price to Sales (P/S): 1.35
• P/FCF Ratio: -20.96
• 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: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 65 Neutral
• Price Target: ¥2,328.00 ▲(9.92% Upside)

SEC Carbon Ltd. has a mixed outlook. The company's strong valuation and robust balance sheet are significant positives. However, technical indicators suggest bearish momentum, and financial performance shows challenges in revenue growth and cash flow. Improving operational efficiencies and cash flow generation are crucial for future growth.

SEC Carbon Ltd. Business Overview & Revenue Model

Company Description

Sec Carbon, Limited manufactures and sells graphite electrodes for steel making. It offers SK-B graphitized cathode blocks for aluminum smelting; graphite electrodes that are used in electric arc furnaces for steelmaking; and carbon and graphite specialties and materials for use in the semiconductor, aerospace, chemical, electrochemistry, machine, and metallurgy industries. The company also provides fine powder that is used in various industries, such as paint, sliding materials, metallurgic uses, and batteries. It supplies its products to approximately 40 countries worldwide. The company was formerly known as SEC Corporation and changed its name to Sec Carbon, Limited in October 2006. Sec Carbon, Limited was founded in 1934 and is headquartered in Amagasaki, Japan.

How the Company Makes Money

SEC Carbon Ltd. generates revenue through multiple streams, primarily from the sale of its carbon capture technologies and related services. The company licenses its proprietary technology to various industries, including power generation and manufacturing, which allows clients to implement effective carbon management solutions. Additionally, SEC Carbon Ltd. provides consultancy services to help organizations develop emissions reduction strategies tailored to their specific needs. Significant partnerships with government agencies and environmental organizations also contribute to its earnings, as these collaborations often involve funding for carbon reduction projects, grants, and shared initiatives aimed at promoting sustainable practices.

SEC Carbon Ltd. Financial Statement Overview

Summary

SEC Carbon Ltd. shows strong gross margins and a robust balance sheet with minimal debt, indicating financial stability. However, declining net margins, volatile revenue growth, and cash flow challenges highlight potential risks. The company needs to improve operational efficiencies and cash flow generation to sustain long-term growth.

Income Statement

SEC Carbon Ltd. has shown a mixed performance in its income statement. The gross profit margin for the latest period is approximately 35.6%, reflecting a strong ability to control production costs relative to revenue. However, the net profit margin decreased to 18.4% from the previous year's 19.6%, indicating a decline in profitability. Revenue growth has been volatile, decreasing by 16.4% in the most recent year after a previous increase. The EBIT margin is at 21.8%, a decline from the previous year, suggesting challenges in operational efficiency. Overall, while the company maintains solid margins, the fluctuations in revenue and profitability present concerns.

Balance Sheet

The balance sheet of SEC Carbon Ltd. indicates a robust financial position with a very low debt-to-equity ratio of 0.0001, highlighting minimal leverage and a strong equity base. The return on equity (ROE) stands at 7.8% for the latest year, demonstrating moderate efficiency in generating profits from shareholders' equity. The equity ratio is high at 90.6%, indicating financial stability and a low reliance on debt financing. The company's solid equity position is a key strength, though the decline in ROE compared to previous years suggests some pressure on return generation.

Cash Flow

Cash flow analysis reveals some concerns. Operating cash flow decreased significantly to 4.5 billion JPY from the previous year's 7.8 billion JPY, reflecting potential operational challenges. The free cash flow turned negative, indicating that capital expenditures exceeded the cash generated from operations. The operating cash flow to net income ratio is 0.79, below the ideal level, suggesting cash flow issues relative to accounting profits. The company's ability to generate free cash flow has been inconsistent, raising questions about sustainability in cash generation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	27.16B	31.18B	37.31B	30.40B	22.92B	21.30B
Gross Profit	8.99B	11.09B	14.72B	10.23B	6.41B	5.62B
EBITDA	7.47B	9.47B	11.59B	8.69B	4.42B	4.96B
Net Income	4.14B	5.75B	7.30B	5.40B	3.04B	2.50B
Balance Sheet
Total Assets	82.64B	81.39B	87.80B	72.55B	62.61B	58.72B
Cash, Cash Equivalents and Short-Term Investments	20.76B	17.42B	22.34B	19.37B	22.44B	16.63B
Total Debt	39.00M	9.00M	1.00M	7.00M	17.00M	30.00M
Total Liabilities	8.25B	7.59B	14.90B	10.14B	6.55B	5.25B
Stockholders Equity	74.37B	73.79B	72.88B	62.40B	56.05B	53.47B
Cash Flow
Free Cash Flow	0.00	-2.00B	4.54B	34.00M	6.80B	1.45B
Operating Cash Flow	0.00	4.55B	7.79B	2.34B	7.62B	3.37B
Investing Cash Flow	0.00	-5.40B	-16.03B	-4.35B	-954.00M	-1.94B
Financing Cash Flow	0.00	-2.99B	-1.39B	-1.03B	-826.00M	-1.03B

SEC Carbon Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2118.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5304, the sentiment is Negative. The current price of 2118 is below the 20-day moving average (MA) of 2176.20, below the 50-day MA of 2199.60, and above the 200-day MA of 2057.93, indicating a neutral trend. The MACD of -19.71 indicates Positive momentum. The RSI at 37.52 is Neutral, neither overbought nor oversold. The STOCH value of 22.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:5304.

SEC Carbon Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4092	71 Outperform	¥25.66B	10.19	―	3.64%	-1.44%	-1.26%
4078	70 Outperform	¥49.27B	9.71	―	4.58%	0.10%	―
4094	70 Outperform	¥43.41B	18.36	―	4.02%	8.54%	6.93%
5302	69 Neutral	$48.10B	11.80	7.92%	4.57%	-2.88%	-6.99%
5304	65 Neutral	¥44.54B	10.45	―	4.72%	-27.68%	-43.78%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
5301	54 Neutral	¥211.04B	―	-14.04%	3.03%	-7.36%	-574.56%