NANKAI CHEMICAL COMPANY LIMITED (4040) AI Stock Analysis

• Market Cap: ¥6.76B
• Dividend Yield: 1.9%
• Average Volume (3M): 12.55K
• Price to Earnings (P/E): 6.6
• Beta (1Y): 1.30
• Revenue Growth: 6.80%
• EPS Growth: -19.87%
• Country: JP
• Employees: 305
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals
• EPS (TTM): 103.22
• Shares Outstanding: 2,330,330
• 10 Day Avg. Volume: 5,410
• 30 Day Avg. Volume: 12,550
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥3,161.00
• Price Target Upside: 9.68% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 67 Neutral
• Price Target: ¥3,161.00 ▲(9.68% Upside)

The overall stock score is primarily influenced by strong valuation metrics, suggesting the stock may be undervalued. However, financial performance concerns, particularly around cash flow, and weak technical indicators weigh down the score.

NANKAI CHEMICAL COMPANY LIMITED Business Overview & Revenue Model

Company Description

Nankai Chemical Company,Limited manufacturers and sells chemical in Japan and internationally. The company offers inorganic industrial chemicals, water treatment disinfectants, water treatment agents, healthy foods, organic fine chemicals, and pesticides, as well as salt. It is also involved in the sulfuric acid recycling business; collection, transportation, and intermediate treatment of industrial waste; distribution and recovery of precious metals, and non-ferrous metals; distribution and construction of air conditioning equipment; distribution of precision machinery, textile machinery, plating equipment, paint equipment, and building material; parking lot, and real estate management and warehousing; and research, development, production, and sale of agricultural, livestock, and marine products; freight transport and handling; power generation and operation; and non-life insurance business. The company was founded in 1906 and is headquartered in Osaka, Japan.

How the Company Makes Money

NANKAI CHEMICAL COMPANY LIMITED generates revenue through the manufacturing and sale of its chemical products. The company's key revenue streams include the sale of inorganic chemicals like chlor-alkali products, which are used widely in industries such as textiles, paper, and detergents. Additionally, the company produces organic chemicals and fine chemicals that serve as essential components in pharmaceuticals and electronic materials. The company maintains significant partnerships with industrial manufacturers and distributors to facilitate the wide-reaching distribution of its products, contributing substantially to its earnings. Furthermore, the company's focus on R&D enables it to develop innovative products that cater to niche markets, enhancing its competitive edge and profitability.

NANKAI CHEMICAL COMPANY LIMITED Financial Statement Overview

Summary

Nankai Chemical Company Limited shows strong revenue growth and healthy operational margins. However, declining net income and negative free cash flow pose risks to long-term sustainability. The balance sheet is stable, but cash flow management needs improvement.

Income Statement

Nankai Chemical Company Limited shows a consistent revenue growth over the years with a recent growth rate of 4.56% from 2024 to 2025. Gross profit margin is stable at approximately 26.38%, while the net profit margin has decreased slightly to 4.86% in 2025 due to a decrease in net income. The EBIT and EBITDA margins are generally healthy, indicating good operational efficiency.

Balance Sheet

The company's balance sheet reflects a moderate debt-to-equity ratio of 0.67, suggesting a balanced use of debt and equity financing. The return on equity (ROE) is 12.10%, indicating a solid ability to generate profits from shareholders' equity. The equity ratio of 37.37% shows a reasonable level of equity financing relative to total assets.

Cash Flow

Cash flow analysis reveals a significant decline in free cash flow, turning negative in 2025. Operating cash flow is positive but has decreased substantially compared to 2024. The operating cash flow to net income ratio is 0.18, indicating challenges in converting profits into cash, which could be a risk if sustained.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	20.90B	20.90B	19.99B	19.60B	17.43B	16.46B
Gross Profit	5.51B	5.51B	5.50B	4.50B	4.13B	3.87B
EBITDA	2.41B	2.55B	2.73B	1.71B	1.49B	1.08B
Net Income	1.02B	1.02B	1.16B	504.00M	462.00M	155.00M
Balance Sheet
Total Assets	22.47B	22.47B	20.26B	18.35B	16.98B	16.12B
Cash, Cash Equivalents and Short-Term Investments	1.70B	1.70B	1.71B	1.30B	1.28B	1.11B
Total Debt	5.64B	5.64B	5.21B	6.07B	7.41B	8.24B
Total Liabilities	13.96B	13.96B	12.76B	13.16B	12.31B	12.09B
Stockholders Equity	8.40B	8.40B	7.42B	5.13B	4.62B	3.99B
Cash Flow
Free Cash Flow	0.00	-1.85B	570.00M	131.00M	383.00M	-321.00M
Operating Cash Flow	0.00	181.00M	2.65B	1.77B	1.59B	1.26B
Investing Cash Flow	0.00	-490.00M	-1.94B	-371.00M	-614.00M	-1.81B
Financing Cash Flow	0.00	243.00M	-327.00M	-1.40B	-858.00M	893.00M

NANKAI CHEMICAL COMPANY LIMITED Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2882.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4040, the sentiment is Negative. The current price of 2882 is below the 20-day moving average (MA) of 2893.75, below the 50-day MA of 3029.64, and above the 200-day MA of 2658.14, indicating a neutral trend. The MACD of -31.04 indicates Negative momentum. The RSI at 38.74 is Neutral, neither overbought nor oversold. The STOCH value of 11.49 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4040.

NANKAI CHEMICAL COMPANY LIMITED Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4366	81 Outperform	10.81B	12.60	5.52%	1.59%	13.02%	0.00%
4041	78 Outperform	193.20B	13.72	8.04%	2.31%	3.26%	-13.75%
4097	76 Outperform	58.41B	12.76	6.06%	1.89%	5.20%	-1.83%
4093	74 Outperform	12.62B	10.17	7.03%	3.88%	-1.36%	-18.70%
4531	73 Outperform	6.07B	8.46	6.84%	3.24%	19.66%	-13.42%
4040	67 Neutral	¥6.76B	6.57		1.90%	6.80%	-19.87%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%