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

• Market Cap: ¥16.05B
• Dividend Yield: N/A
• Average Volume (3M): 940.23K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.36
• 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: 15,892,500
• 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: 62 Neutral
• Price Target: ¥1,071.00 ▲(82.14% Upside)

Overall score reflects mixed financial performance driven by improving profitability and a reasonably stable balance sheet but constrained by negative free cash flow. Technicals are strong with price well above key moving averages, though momentum looks overheated (high RSI). Valuation is a drag due to a negative P/E and no dividend yield support.

Positive Factors

Strong gross and operating margins

Sustained improvement in gross, EBIT and EBITDA margins indicates the company is achieving structural cost efficiencies in its microwave processing solutions. Higher margins support durable profitability even if revenue cycles fluctuate, improving reinvestment capacity for R&D and commercialization.

Moderately stable balance sheet and ROE improvement

A balanced debt profile, healthy equity ratio and materially improved ROE provide lasting financial flexibility to fund project development and equipment deliveries. This stability lowers refinancing risk and supports multi‑period investment in pilot-to-commercial conversions.

Proprietary microwave tech and diversified revenue model

Owning specialized microwave process IP plus multiple commercial channels (engineering services, equipment sales, licensing) creates durable competitive advantages. These allow capture of project economics across stages, support recurring engineering engagements, and leverage structural energy-efficiency demand.

Negative Factors

Persistently negative free cash flow

Ongoing negative free cash flow and poor cash conversion limit the firm's ability to self‑fund scale‑up and capital equipment deliveries. Over months this pressures liquidity, raises reliance on external financing, and can slow commercialization of pilot projects into sustained revenue.

Inconsistent and declining revenue

Material revenue decline and volatile top-line trends reduce predictability of project rollouts and stretch fixed-cost absorption. For a technology provider, uneven project cadence can delay margin realization and weaken the sales pipeline needed to convert R&D wins into repeatable industrial contracts.

Small scale and asset/debt fluctuations risk

A small headcount and reported fluctuations in assets and debt suggest limited operational scale and exposure to single large projects. This elevates execution and concentration risk over the medium term, as one delayed contract or balance sheet swing can materially affect operations and growth plans.

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

Mixed fundamentals: profitability and margins have improved and the balance sheet looks moderately stable, but inconsistent revenue growth and persistently negative free cash flow weigh on overall financial quality.

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: Positive
• RSI: Neutral
• STOCH: Positive

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 1048.50, below the 50-day MA of 814.10, and below the 200-day MA of 657.54, indicating a bullish trend. The MACD of 72.64 indicates Positive momentum. The RSI at 54.98 is Neutral, neither overbought nor oversold. The STOCH value of 17.39 is Positive, 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	¥7.32B	6.31	―	1.96%	8.43%	2.99%
4531	72 Outperform	¥8.49B	12.65	―	2.97%	9.92%	-27.64%
4366	71 Outperform	¥12.29B	14.22	―	1.81%	9.07%	―
4960	71 Outperform	¥12.82B	134.39	―	1.06%	-9.63%	-1.71%
6568	69 Neutral	¥9.41B	13.68	―	2.98%	-9.60%	-38.34%
9227	62 Neutral	¥16.05B	-73.25	―	―	-16.76%	74.95%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%