Gun Ei Chemical Industry Co., Ltd. (4229) AI Stock Analysis

Gun Ei Chemical Industry Co., Ltd.

(TSE/TYO:4229)

Select Model

Rating:67Neutral

Price Target:JPY 4,638.00▲(4.70% Upside)

Action:reiterated

Date:11/01/26

The overall score of 67 is anchored by the company's exceptional balance sheet safety and a fair valuation. While minimal debt and a reasonable P/E ratio of 15.0 provide strong defensive characteristics, the stock's upside is constrained by a lack of top-line growth, heavy capital expenditures dragging down free cash flow, and an overarching long-term bearish technical trend.

Positive Factors

Very low leverageDebt at only about 1–2% of equity, including 2026 debt-to-equity of 0.01, gives Gun Ei substantial financial flexibility. The conservative structure can support resilience through demand or cost volatility and preserve capacity to fund operations without a heavy interest burden.

Negative Factors

Volatile free cash flowFree cash flow turned negative in 2026, after also being negative in 2023, despite positive operating cash flow. This weakens cash conversion visibility and may indicate heavier investment or working-capital pressure, potentially limiting internally funded expansion over the next several quarters.

Gun Ei Chemical Industry Co., Ltd. (4229) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 28.37B
Dividend Yield: 2.30%
Average Volume (3M): 18.59K
Price to Earnings (P/E): 15.0
Beta (1Y): 0.64
Revenue Growth: 7.06%
EPS Growth: 17.79%
Country: Japan
Employees: 541
Sector: Basic Materials
Sector Strength: 61
Industry: Chemicals - Specialty

Gun Ei Chemical Industry Co., Ltd. Business Overview & Revenue Model

Company Description

Gun Ei Chemical Industry Co., Ltd., together with its subsidiaries, manufactures and sells synthetic resins and fibers in Japan and internationally. It operates through three segments: Chemicals Business, Food Business, Real Estate Utilization Busine...

How the Company Makes Money

Gun Ei Chemical Industry generates revenue primarily through the manufacture and sale of chemical products to business customers. Its core revenue model is product-based: (1) selling internally manufactured industrial/specialty chemical materials (re...

Gun Ei Chemical Industry Co., Ltd. Financial Statement Overview

Summary

Supported by an immaculate balance sheet with minimal leverage and robust operating cash flows. However, the score is tempered by slow revenue growth, negative free cash flow from heavy recent capital expenditures, and a low return on equity.

Income Statement

68Positive

Balance Sheet

85Very Positive

Cash Flow

60Neutral

Financial statement breakdown
Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	32.02B	31.31B	30.55B	30.31B	31.39B	29.41B
Gross Profit	7.52B	7.06B	7.07B	7.46B	6.55B	7.29B
EBITDA	4.84B	4.40B	3.99B	4.37B	3.41B	4.11B
Net Income	1.89B	1.97B	1.92B	2.04B	1.20B	1.93B
Balance Sheet
Total Assets	72.57B	68.01B	63.02B	61.01B	54.60B	54.68B
Cash, Cash Equivalents and Short-Term Investments	11.80B	11.69B	10.95B	9.55B	9.26B	10.69B
Total Debt	606.00M	665.00M	773.00M	755.00M	709.00M	675.00M
Total Liabilities	13.19B	11.16B	11.28B	10.73B	8.49B	9.78B
Stockholders Equity	57.28B	54.65B	49.75B	48.53B	44.56B	43.42B
Cash Flow
Free Cash Flow	0	-591.00M	1.38B	1.82B	-533.00M	1.28B
Operating Cash Flow	0	4.58B	4.33B	3.64B	1.20B	2.45B
Investing Cash Flow	0	-2.76B	-2.81B	-2.16B	-2.46B	-942.00M
Financing Cash Flow	0	-825.00M	-875.00M	-774.00M	-687.00M	-746.00M

Gun Ei Chemical Industry Co., Ltd. Technical Analysis

Technical Analysis SentimentPositive

Last Price4430.00

Price Trends

50DMA4197.78Positive

100DMA4361.26Negative

200DMA4589.91Negative

Market Momentum

MACD-8.75Negative

RSI57.03Neutral

STOCH88.57Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4229, the sentiment is Positive. The current price of 4430.00 is above the 20-day moving average (MA) of 4160.75, above the 50-day MA of 4197.78, and below the 200-day MA of 4589.91, indicating a neutral trend. The MACD of -8.75 indicates Negative momentum. The RSI at 57.03 is Neutral, neither overbought nor oversold. The STOCH value of 88.57 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4229.

Gun Ei Chemical Industry Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

JP:4229 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:4968	76Outperform	JPY 38.55B	13.00	―	2.54%	4.51%	115.09%
JP:4462	71Outperform	JPY 40.44B	11.36	―	1.65%	7.23%	41.65%
JP:4229	67Neutral	JPY 28.34B	15.02	―	2.30%	7.06%	17.79%
JP:4112	66Neutral	JPY 33.45B	9.44	―	2.69%	8.79%	65.45%
JP:4973	64Neutral	JPY 23.31B	12.87	―	6.06%	62.23%	35.18%
Sector *	61Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
JP:4027	53Neutral	JPY 45.07B	-127.20	―	3.62%	7.26%	-118.07%

* Basic Materials Sector Average

Performance Comparison

JP:4229 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:4229	Gun Ei Chemical Industry Co., Ltd.	4275.00	929.88	27.80%
JP:4027	Tayca Corporation	2212.00	953.78	75.80%
JP:4112	Hodogaya Chemical Co., Ltd.	2048.00	272.21	15.33%
JP:4462	Ishihara Chemical Company,Ltd.	2787.00	710.59	34.22%
JP:4968	Arakawa Chemical Industries,Ltd.	1943.00	852.45	78.17%
JP:4973	Japan Pure Chemical Co., Ltd.	4160.00	1183.71	39.77%

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: Nov 01, 2026

Gun Ei Chemical Industry Co., Ltd. AI Stock Analysis