Microwave Chemical Co., Ltd. (9227) AI Stock Analysis

• Market Cap: ¥13.81B
• Dividend Yield: N/A
• Average Volume (3M): 940.23K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.11
• Revenue Growth: -16.76%
• EPS Growth: 74.95%
• Country: JP
• Employees: 55
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals
• EPS (TTM): -20.47
• Shares Outstanding: 15,872,700
• 10 Day Avg. Volume: 869,720
• 30 Day Avg. Volume: 940,230
• PEG Ratio: -0.42
• Price to Book (P/B): 7.41
• Price to Sales (P/S): 4.90
• P/FCF Ratio: -35.80
• 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: 61 Neutral
• Price Target: ¥918.00 ▲(56.12% Upside)

The score is primarily driven by mixed financials: improving profitability and a reasonably stable balance sheet are offset by consistently negative free cash flow and uneven revenue growth. Technicals are supportive with a strong uptrend, but momentum indicators are elevated, increasing pullback risk. Valuation is a headwind due to the negative P/E and lack of dividend yield data.

Positive Factors

Diversified end markets and proprietary technology

Serving pharmaceuticals, agriculture and industrial customers with microwave-enabled chemistry provides durable demand diversification. Proprietary microwave tech can create product differentiation, cost efficiency and stickier client relationships, supporting long-term revenue resilience.

Improving profitability and strong gross margins

Recovered net profit and improving EBIT/EBITDA margins point to better operational execution and cost structure. Sustained margins enhance cash generation potential when revenue stabilizes, enabling reinvestment in R&D and capacity for durable competitive advantage.

Moderately stable balance sheet and healthy equity ratio

A balanced debt profile and healthy equity ratio offer financial flexibility to fund capex, R&D and strategic initiatives without excessive refinancing risk. This stability supports long-term investment in product development and market expansion.

Negative Factors

Consistently negative free cash flow

Persistent negative free cash flow undermines the firm’s ability to self-fund growth, pay down debt or return capital. Over months this raises reliance on external financing, increasing vulnerability to rising funding costs and constraining strategic flexibility.

Inconsistent and declining revenue growth

Volatile and declining top-line weakens predictability of margins and makes capacity planning harder. If underlying demand or market share erosion persists, it will limit scale economies, reduce operating leverage and pressure long-term profitability.

Inefficiencies converting income into operating cash

Weak conversion of reported income into cash suggests working capital stress or one-off accounting items, lowering earnings quality. Over time this can strain liquidity, complicate investment funding and increase the need for external financing during downturns.

Microwave Chemical Co., Ltd. Business Overview & Revenue Model

Company Description

Microwave Chemical Co., Ltd. researches, develops, engineers, and licenses microwave chemical process in Japan. It also operates a microwave chemical plant. The company was incorporated in 2007 and is headquartered in Suita, Japan.

How the Company Makes Money

Microwave Chemical Co., Ltd. generates revenue primarily through the sale of its chemical products across various industries, including pharmaceuticals, agriculture, and industrial applications. The company has established key revenue streams from direct sales to manufacturers and distributors, as well as long-term contracts with major industry players. Additionally, the company may benefit from strategic partnerships and collaborations with research institutions and other firms in the chemical sector, which can enhance its product offerings and market reach. The adoption of its microwave technology in the manufacturing processes of clients can also lead to cost savings and increased efficiency, further driving demand for its products and contributing to its overall earnings.

Microwave Chemical Co., Ltd. Financial Statement Overview

Summary

Microwave Chemical Co., Ltd. exhibits a mixed financial performance with strengths in profitability recovery and equity structure, but faces challenges in consistent revenue growth and cash flow management. While the company has improved its profitability metrics, maintaining positive cash flows and managing debt levels will be crucial for future stability.

Income Statement

Microwave Chemical Co., Ltd. has shown a mixed performance in its income statement. The gross profit margin is strong, indicating efficient cost management. However, the revenue growth rate has been inconsistent, with a significant decline in 2025 compared to 2024. Net profit margin has improved substantially from a negative position, reflecting recovering profitability. The EBIT and EBITDA margins have also seen improvement, suggesting enhanced operational efficiency.

Balance Sheet

The company's balance sheet presents moderate stability. The debt-to-equity ratio is relatively balanced, indicating a manageable debt level. Return on equity has improved significantly, driven by recent profitability. The equity ratio is healthy, showcasing a solid capital structure. However, fluctuations in total assets and debt levels pose potential risks.

Cash Flow

Cash flow analysis reveals challenges, particularly in free cash flow, which has been consistently negative. The operating cash flow to net income ratio indicates some inefficiencies in converting income into cash. The free cash flow growth rate is unfavorable, highlighting liquidity issues. Despite these challenges, financing activities have provided some support.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.58B	1.61B	1.86B	1.22B	860.51M	458.03M
Gross Profit	1.02B	1.08B	1.12B	863.53M	657.68M	238.25M
EBITDA	172.04M	273.74M	-810.33M	137.59M	-24.44M	-957.18M
Net Income	98.36M	161.48M	-944.89M	75.39M	-110.25M	-1.04B
Balance Sheet
Total Assets	1.76B	2.12B	1.89B	3.08B	1.58B	1.70B
Cash, Cash Equivalents and Short-Term Investments	612.46M	507.10M	529.40M	1.25B	220.53M	382.32M
Total Debt	651.34M	677.58M	525.37M	745.31M	815.25M	644.18M
Total Liabilities	959.52M	1.06B	1.04B	1.37B	956.97M	966.02M
Stockholders Equity	805.28M	1.06B	856.29M	1.71B	625.44M	735.68M
Cash Flow
Free Cash Flow	0.00	-220.33M	-90.45M	171.91M	-351.85M	-360.29M
Operating Cash Flow	0.00	-73.52M	205.75M	372.94M	-226.01M	-287.66M
Investing Cash Flow	0.00	-147.24M	-797.82M	-282.48M	-125.84M	-72.64M
Financing Cash Flow	0.00	198.44M	-124.79M	935.28M	190.06M	-69.94M

Microwave Chemical Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 588.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9227, the sentiment is Positive. The current price of 588 is below the 20-day moving average (MA) of 640.45, below the 50-day MA of 688.72, and below the 200-day MA of 604.90, indicating a bullish trend. The MACD of 11.19 indicates Negative momentum. The RSI at 77.76 is Negative, neither overbought nor oversold. The STOCH value of 92.15 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:9227.

Microwave Chemical Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4040	77 Outperform	¥7.53B	6.49	―	1.96%	8.43%	2.99%
4531	74 Outperform	¥7.55B	10.73	―	2.97%	9.92%	-27.64%
4366	73 Outperform	¥11.63B	13.92	―	1.81%	9.07%	―
6568	69 Neutral	¥9.30B	13.51	―	2.98%	-9.60%	-38.34%
4960	63 Neutral	¥5.74B	60.13	―	1.06%	-9.63%	-1.71%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
9227	61 Neutral	¥13.81B	-63.10	―	―	-16.76%	74.95%