Toho Chemical Industry Company, Limited (4409) AI Stock Analysis

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Toho Chemical Industry Company, Limited

(TSE/TYO:4409)

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Rating:61Neutral

Price Target:JPY 929.00▲(18.80% Upside)

Action:reiterated

Date:08/17/26

The score is primarily held back by mixed financial performance quality—especially weak and volatile free cash flow and still-elevated leverage despite improving trends. Offsetting factors include a constructive technical setup (price above major moving averages with positive MACD) and supportive valuation (low P/E and moderate dividend yield).

Positive Factors

Revenue ReboundThe strong FY2026 revenue rebound indicates improving demand or product mix and restores scale after prior volatility. If sustained, higher sales can support better fixed-cost absorption, strengthen customer and market position, and provide a foundation for earnings growth.

Negative Factors

Thin Profit MarginsLow operating and net margins leave limited protection against cost increases, pricing pressure, or weaker demand. Even with recent improvement, thin profitability makes earnings more sensitive to chemical-industry cycles and restricts the cash retained for investment and balance-sheet strengthening.

Toho Chemical Industry Company, Limited (4409) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 16.57B
Dividend Yield: 2.81%
Average Volume (3M): 11.43K
Price to Earnings (P/E): 6.7
Beta (1Y): 0.32
Revenue Growth: 9.08%
EPS Growth: 103.97%
Country: Japan
Employees: 856
Sector: Basic Materials
Sector Strength: 61
Industry: Chemicals - Specialty

Toho Chemical Industry Company, Limited Business Overview & Revenue Model

Company Description

Toho Chemical Industry Company, Limited, established in 1938 and headquartered in Tokyo, Japan, specializes in the global manufacturing and distribution of a diverse array of surfactants, specialty chemicals, resins, and industrial chemicals. The com...

Toho Chemical Industry Company, Limited Financial Statement Overview

Summary

Income statement shows a strong FY2026 revenue rebound (+26% YoY) and modest margin improvement, but profitability remains thin (low single-digit EBIT margin and ~2.8% net margin). Balance sheet is improving as leverage declines, yet debt remains high (~1.19x debt-to-equity). Cash flow is the main drag: free cash flow is near breakeven in FY2026 and has been volatile historically, indicating weak cash conversion and higher financial flexibility risk.

Income Statement

62Positive

Balance Sheet

55Neutral

Cash Flow

38Negative

Financial statement breakdown
Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	55.36B	53.63B	53.61B	50.60B	55.36B	49.89B
Gross Profit	8.94B	8.59B	8.18B	6.84B	7.29B	7.23B
EBITDA	5.36B	4.89B	5.20B	4.00B	4.50B	3.87B
Net Income	1.72B	1.53B	1.54B	546.00M	977.00M	1.40B
Balance Sheet
Total Assets	73.05B	70.82B	67.86B	69.94B	67.95B	66.49B
Cash, Cash Equivalents and Short-Term Investments	5.41B	5.34B	5.90B	6.75B	6.08B	7.50B
Total Debt	26.61B	28.58B	28.58B	30.26B	29.94B	28.18B
Total Liabilities	48.00B	46.70B	46.78B	50.77B	50.18B	49.58B
Stockholders Equity	24.96B	24.03B	20.99B	19.08B	17.69B	16.82B
Cash Flow
Free Cash Flow	0	9.00M	450.00M	1.40B	-3.15B	-5.03B
Operating Cash Flow	0	4.40B	3.30B	3.40B	1.70B	-572.00M
Investing Cash Flow	0	-4.60B	-2.55B	-1.93B	-4.59B	-4.50B
Financing Cash Flow	0	-421.00M	-1.86B	-900.00M	1.42B	3.11B

Toho Chemical Industry Company, Limited Technical Analysis

Technical Analysis SentimentNeutral

Last Price782.00

Price Trends

50DMA810.04Negative

100DMA776.76Positive

200DMA759.29Positive

Market Momentum

MACD-10.90Positive

RSI43.73Neutral

STOCH22.11Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4409, the sentiment is Neutral. The current price of 782.00 is below the 20-day moving average (MA) of 802.00, below the 50-day MA of 810.04, and above the 200-day MA of 759.29, indicating a neutral trend. The MACD of -10.90 indicates Positive momentum. The RSI at 43.73 is Neutral, neither overbought nor oversold. The STOCH value of 22.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4409.

Toho Chemical Industry Company, Limited Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

JP:4409 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:4092	74Outperform	JPY 41.19B	16.55	―	3.64%	2.17%	4.31%
JP:4113	66Neutral	JPY 10.95B	15.93	―	2.71%	-2.77%	-63.05%
JP:4410	62Neutral	JPY 34.80B	8.08	―	3.24%	9.51%	320.92%
Sector *	61Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
JP:4409	61Neutral	JPY 16.81B	6.70	―	2.81%	9.08%	103.97%
JP:4968	51Neutral	JPY 36.90B	10.62	―	2.51%	8.68%	110.21%
JP:4406	46Neutral	JPY 7.94B	5.91	―	2.12%	2.22%	149.18%

* Basic Materials Sector Average

Performance Comparison

JP:4409 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:4409	Toho Chemical Industry Company, Limited	782.00	73.17	10.32%
JP:4092	Nippon Chemical Industrial Co., Ltd.	4940.00	2478.28	100.67%
JP:4113	Taoka Chemical Co., Ltd.	774.00	-364.96	-32.04%
JP:4406	New Japan Chemical Co., Ltd.	212.00	1.24	0.59%
JP:4410	Harima Chemicals Group, Inc.	1419.00	588.62	70.89%
JP:4968	Arakawa Chemical Industries,Ltd.	1969.00	898.80	83.98%

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

Toho Chemical Industry Company, Limited AI Stock Analysis