Kawaguchi Chemical Industry Co., Ltd. (4361) AI Stock Analysis

0 Followers

Kawaguchi Chemical Industry Co., Ltd.

(TSE/TYO:4361)

Select Model

Rating:61Neutral

Price Target:JPY 1,758.00▲(1.56% Upside)

Action:reiterated

Date:11/07/26

The overall score of 61 reflects a company with stable profitability and a very attractive valuation, weighed down by a recent revenue decline and volatile cash flows. The exceptionally low P/E of 4.07 and high dividend yield of 3.49% are the most significant positive factors, suggesting the stock may be undervalued. However, the 10.6% drop in annual revenue and inconsistent free cash flow generation are key risks. Technicals are neutral, with the stock showing short-term weakness but holding above longer-term averages.

Positive Factors

Core industrial chemical positionKawaguchi Chemical has an established industrial business centered on rubber chemicals used in rubber products manufacturing. This application-focused product base supports recurring demand from industrial customers and provides a durable operating foundation beyond short-term financial fluctuations.

Negative Factors

Meaningful debt burdenLeverage remains substantial relative to the company’s earnings profile, and debt increased in 2025 despite the improved equity base. This debt-funded structure raises sensitivity to weaker earnings or cash flow and can constrain financial flexibility for investment and capital allocation.

Kawaguchi Chemical Industry Co., Ltd. (4361) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 2.11B
Dividend Yield: 3.42%
Average Volume (3M): 8,128
Price to Earnings (P/E): 4.2
Beta (1Y): 0.61
Revenue Growth: 3.54%
EPS Growth: 108.06%
Country: Japan
Employees: 160
Sector: Basic Materials
Sector Strength: 61
Industry: Chemicals - Specialty

Kawaguchi Chemical Industry Co., Ltd. Business Overview & Revenue Model

Company Description

Kawaguchi Chemical Industry Co., Ltd is a Japanese company that specializes in the production and sale of various fine chemicals within Japan. Their product portfolio is extensive, covering several key industrial areas. The company supplies organic r...

How the Company Makes Money

Kawaguchi Chemical Industry generates revenue primarily through the sale of chemical products manufactured in-house. Its core earnings are driven by supplying rubber chemicals (additives used in rubber compounding and processing) to industrial custom...

Kawaguchi Chemical Industry Co., Ltd. Financial Statement Overview

Summary

Financial performance is mixed. Revenue declined 10.6% in the latest year, but margins remained stable (gross ~18-19%, operating ~4-5%) and net income stayed positive. The balance sheet is solid with growing equity and manageable leverage (D/E 1.13). Cash flow is volatile; operating cash flow rebounded to ¥830M, but free cash flow has been inconsistent due to high capex. Overall, cost discipline and a stable capital structure are offset by top-line weakness and cash flow lumpiness.

Income Statement

58Neutral

Balance Sheet

65Positive

Cash Flow

50Neutral

Financial statement breakdown
Breakdown	TTM	Nov 2025	Nov 2024	Nov 2023	Nov 2022	Nov 2021
Income Statement
Total Revenue	9.14B	8.81B	8.92B	8.61B	8.37B	7.94B
Gross Profit	1.91B	1.64B	1.61B	1.51B	1.50B	1.57B
EBITDA	1.17B	868.62M	858.26M	765.47M	697.01M	789.17M
Net Income	498.86M	298.39M	336.27M	255.53M	218.86M	281.27M
Balance Sheet
Total Assets	8.97B	8.90B	8.56B	8.38B	8.35B	7.93B
Cash, Cash Equivalents and Short-Term Investments	1.90B	1.21B	744.64M	1.04B	910.92M	1.32B
Total Debt	3.25B	3.54B	3.10B	3.18B	3.08B	3.16B
Total Liabilities	5.53B	5.77B	5.68B	5.74B	5.94B	5.68B
Stockholders Equity	3.44B	3.13B	2.88B	2.64B	2.41B	2.25B
Cash Flow
Free Cash Flow	93.00M	93.00M	-214.14M	91.86M	-271.47M	520.95M
Operating Cash Flow	829.95M	829.95M	143.37M	469.93M	-20.80M	785.46M
Investing Cash Flow	-738.67M	-738.67M	-305.08M	-370.24M	-242.94M	-245.70M
Financing Cash Flow	359.98M	359.98M	-138.97M	20.86M	-162.17M	-119.43M

Kawaguchi Chemical Industry Co., Ltd. Technical Analysis

Technical Analysis SentimentPositive

Last Price1731.00

Price Trends

50DMA1668.86Positive

100DMA1585.84Positive

200DMA1546.84Positive

Market Momentum

MACD15.04Positive

RSI55.01Neutral

STOCH83.57Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4361, the sentiment is Positive. The current price of 1731.00 is above the 20-day moving average (MA) of 1720.05, above the 50-day MA of 1668.86, and above the 200-day MA of 1546.84, indicating a bullish trend. The MACD of 15.04 indicates Positive momentum. The RSI at 55.01 is Neutral, neither overbought nor oversold. The STOCH value of 83.57 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4361.

Kawaguchi Chemical Industry Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

JP:4361 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:4623	74Outperform	JPY 5.84B	8.80	―	3.41%	30.70%	20.84%
JP:4119	67Neutral	JPY 9.65B	7.52	―	1.95%	6.58%	―
JP:4624	67Neutral	JPY 5.94B	8.05	―	1.25%	6.21%	51.54%
Sector *	61Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
JP:4361	61Neutral	JPY 2.14B	4.22	―	3.42%	3.54%	108.06%
JP:4616	60Neutral	JPY 4.14B	8.79	―	1.06%	12.28%	310.34%
JP:4615	37Underperform	JPY 4.94B	-13.40	―	―	1.61%	-84.56%

* Basic Materials Sector Average

Performance Comparison

JP:4361 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:4361	Kawaguchi Chemical Industry Co., Ltd.	1731.00	209.70	13.78%
JP:4119	Nippon Pigment Company, Limited	6870.00	3585.22	109.15%
JP:4615	Shinto Paint Co., Ltd.	142.00	16.00	12.70%
JP:4616	Kawakami Paint Manufacturing Co., Ltd.	4345.00	2004.30	85.63%
JP:4623	Asahipen Corporation	1758.00	101.20	6.11%
JP:4624	Isamu Paint Co., Ltd.	3985.00	446.61	12.62%

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 07, 2026

Kawaguchi Chemical Industry Co., Ltd. AI Stock Analysis