NANKAI CHEMICAL COMPANY LIMITED (4040) AI Stock Analysis

• Market Cap: ¥6.30B
• Dividend Yield: 2.29%
• Average Volume (3M): 8.89K
• Price to Earnings (P/E): 6.1
• Beta (1Y): 1.26
• 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: 10,130
• 30 Day Avg. Volume: 8,893
• PEG Ratio: -0.37
• Price to Book (P/B): 0.62
• Price to Sales (P/S): 0.25
• P/FCF Ratio: -2.82
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: ¥3,018.00 ▲(11.70% Upside)

The stock score is primarily driven by a strong valuation, suggesting it is undervalued with a reasonable dividend yield. However, financial performance concerns, particularly in cash flow, and lack of positive technical indicators weigh down the overall score.

NANKAI CHEMICAL COMPANY LIMITED Business Overview & Revenue Model

Company Description

NANKAI CHEMICAL COMPANY LIMITED (4040) is a prominent player in the chemical manufacturing sector, specializing in the production of a diverse range of chemical products, including specialty chemicals, polymers, and industrial chemicals. The company serves various industries such as agriculture, automotive, and electronics, focusing on innovation and sustainable practices to meet the evolving needs of its customers. With a commitment to quality and environmental responsibility, NANKAI aims to enhance operational efficiency and product performance across its product lines.

How the Company Makes Money

NANKAI CHEMICAL COMPANY LIMITED generates revenue primarily through the sale of its chemical products to various industries. The company's revenue model is based on a combination of direct sales to manufacturers, long-term contracts, and partnerships with distributors. Key revenue streams include the sale of specialty chemicals used in agricultural applications, polymers for the automotive sector, and industrial chemicals for general manufacturing. Additionally, NANKAI may benefit from strategic partnerships with other companies in the supply chain, enabling them to expand market reach and improve profitability. Ongoing investments in research and development also allow the company to innovate and introduce new products, further enhancing its revenue potential.

NANKAI CHEMICAL COMPANY LIMITED Financial Statement Overview

Summary

Nankai Chemical Company Limited shows strong revenue growth and 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	21.07B	20.90B	19.99B	19.60B	17.43B	16.46B
Gross Profit	5.52B	5.51B	5.50B	4.50B	4.13B	3.87B
EBITDA	2.38B	2.55B	2.73B	1.71B	1.49B	1.08B
Net Income	890.00M	1.02B	1.16B	504.00M	462.00M	155.00M
Balance Sheet
Total Assets	23.27B	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	5.68B	5.64B	5.21B	6.07B	7.41B	8.24B
Total Liabilities	14.67B	13.96B	12.76B	13.16B	12.31B	12.09B
Stockholders Equity	8.49B	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: 2702.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 2702 is below the 20-day moving average (MA) of 2742.70, below the 50-day MA of 2803.46, and below the 200-day MA of 2748.27, indicating a bearish trend. The MACD of -26.51 indicates Positive momentum. The RSI at 40.96 is Neutral, neither overbought nor oversold. The STOCH value of 21.07 is Neutral, 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
4093	77 Outperform	¥12.41B	10.00	―	3.95%	-1.36%	-18.70%
4041	74 Outperform	¥190.69B	13.54	―	4.39%	3.26%	-13.75%
4097	74 Outperform	¥57.08B	12.47	―	2.90%	5.20%	-1.83%
4531	74 Outperform	¥6.15B	8.74	―	3.21%	9.92%	-27.64%
4040	69 Neutral	¥6.30B	6.12	―	2.29%	6.80%	-19.87%
4366	65 Neutral	¥8.81B	10.55	―	1.68%	9.07%	―
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%