Dainichiseika Color & Chemicals Mfg.Co., Ltd. (4116) AI Stock Analysis

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Dainichiseika Color & Chemicals Mfg.Co., Ltd.

(TSE/TYO:4116)

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Rating:74Outperform

Price Target:JPY 1,510.00▲(10.87% Upside)

Action:reiterated

Date:08/17/26

The score is driven primarily by solid financial quality (low leverage and improved profitability) and supportive valuation (modest P/E with a high dividend yield). These positives are tempered by mixed cash-flow consistency and technically overextended momentum signals that increase near-term pullback risk.

Positive Factors

Low leverage / stronger balance sheetA materially lower debt-to-equity ratio (from ~0.42 to ~0.13 over FY2021–FY2026) provides resilient financial flexibility. This reduces refinancing risk, supports investment or dividends during cyclicality, and makes the firm better able to fund capex or absorb raw-material shocks.

Negative Factors

Stagnant to slightly declining revenueFlat-to-declining top-line implies limited secular growth in core pigment and colorant markets or weak end-market demand. Without structural end-market expansion or new product wins, revenue stagnation constrains scalability and places reliance on margin gains to drive earnings growth.

Dainichiseika Color & Chemicals Mfg.Co., Ltd. (4116) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 90.53B
Dividend Yield: 3.76%
Average Volume (3M): 164.21K
Price to Earnings (P/E): 9.4
Beta (1Y): 0.94
Revenue Growth: 5.48%
EPS Growth: 65.96%
Country: Japan
Employees: 3,514
Sector: General
Sector Strength: 55
Industry: Chemicals - Specialty

Dainichiseika Color & Chemicals Mfg.Co., Ltd. Business Overview & Revenue Model

Company Description

Headquartered in Tokyo, Japan, and established in 1931, Dainichiseika Color & Chemicals Mfg. Co., Ltd. is a key manufacturer and supplier of diverse pigments and colorants. Their extensive product line includes inorganic, organic, and specialized pro...

How the Company Makes Money

The company makes money primarily by manufacturing and selling chemical products—especially pigments and other color/material-related chemicals—to corporate customers. Revenue is generated through (1) product sales of color materials (e.g., pigments...

Dainichiseika Color & Chemicals Mfg.Co., Ltd. Financial Statement Overview

Summary

Profitability has improved versus FY2023–FY2024 (gross margin ~21% and net margin ~6.5% in FY2026), and the balance sheet is notably conservative with steadily declining debt (debt-to-equity ~0.13). Offsetting this, revenue has been broadly flat and free-cash-flow conversion is inconsistent with volatile FCF over multiple years.

Income Statement

71Positive

Balance Sheet

82Very Positive

Cash Flow

58Neutral

Financial statement breakdown
Breakdown	TTM	Mar 2026	Mar 2026	Mar 2025	Mar 2024	Mar 2023
Income Statement
Total Revenue	124.36B	124.76B	124.29B	119.82B	122.00B	121.93B
Gross Profit	25.87B	25.22B	26.04B	22.36B	21.31B	25.66B
EBITDA	14.64B	19.54B	12.73B	10.80B	8.87B	14.18B
Net Income	6.03B	10.29B	8.10B	3.66B	2.01B	6.17B
Balance Sheet
Total Assets	197.33B	196.78B	205.44B	194.85B	192.76B	196.71B
Cash, Cash Equivalents and Short-Term Investments	21.38B	24.25B	23.44B	23.58B	24.76B	26.35B
Total Debt	21.61B	21.04B	18.70B	25.28B	31.00B	32.91B
Total Liabilities	66.10B	66.28B	64.23B	75.68B	78.46B	86.22B
Stockholders Equity	128.96B	128.01B	138.63B	116.75B	112.06B	108.45B
Cash Flow
Free Cash Flow	0	-1.27B	3.46B	4.48B	-2.24B	-252.00M
Operating Cash Flow	0	4.17B	9.04B	9.02B	3.00B	7.58B
Investing Cash Flow	0	1.42B	-2.06B	-1.45B	-2.19B	-6.64B
Financing Cash Flow	0	-7.00B	-6.74B	-10.21B	-3.84B	-11.42B

Dainichiseika Color & Chemicals Mfg.Co., Ltd. Technical Analysis

Technical Analysis SentimentPositive

Last Price1362.00

Price Trends

50DMA1311.37Positive

100DMA1220.93Positive

200DMA1145.40Positive

Market Momentum

MACD3.04Negative

RSI59.70Neutral

STOCH63.56Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4116, the sentiment is Positive. The current price of 1362.00 is above the 20-day moving average (MA) of 1316.55, above the 50-day MA of 1311.37, and above the 200-day MA of 1145.40, indicating a bullish trend. The MACD of 3.04 indicates Negative momentum. The RSI at 59.70 is Neutral, neither overbought nor oversold. The STOCH value of 63.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4116.

Dainichiseika Color & Chemicals Mfg.Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

JP:4116 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:4635	84Outperform	JPY 31.93B	12.79	―	3.71%	7.16%	65.58%
JP:4116	74Outperform	JPY 95.46B	9.43	―	3.76%	5.48%	65.96%
JP:4119	71Outperform	JPY 9.51B	6.63	―	1.98%	5.41%	―
JP:4633	69Neutral	JPY 115.64B	10.49	―	3.93%	10.82%	13.57%
JP:4078	66Neutral	JPY 60.77B	22.06	―	4.83%	1.45%	-60.28%
JP:4611	56Neutral	JPY 51.79B	14.10	―	3.18%	20.42%	-54.42%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%

* General Sector Average

Performance Comparison

JP:4116 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:4116	Dainichiseika Color & Chemicals Mfg.Co., Ltd.	1362.00	440.90	47.87%
JP:4078	Sakai Chemical Industry Co., Ltd.	3315.00	391.21	13.38%
JP:4119	Nippon Pigment Company, Limited	6060.00	2897.43	91.62%
JP:4611	Dai Nippon Toryo Company, Limited	1823.00	609.71	50.25%
JP:4633	Sakata Inx Corp.	2545.00	271.27	11.93%
JP:4635	Tokyo Printing Ink Manufacturing Co., Ltd.	2483.00	1188.26	91.78%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Date of analysis: Aug 17, 2026

Dainichiseika Color & Chemicals Mfg.Co., Ltd. AI Stock Analysis