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Arakawa Chemical Industries,Ltd.
(4968)
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Rating:65Neutral
Price Target:
¥2,167.00
▲(103.28% Upside)
Action:Reiterated
Date:08/09/26
The score is anchored by mid-tier financial strength: profitability has recovered, but thin net margins and especially weak/volatile cash conversion limit confidence. Technicals are a clear positive with a strong uptrend and supportive momentum, while valuation is reasonable with a moderate dividend yield and mid-range P/E.
Positive Factors
Specialty B2B application model
Arakawa sells application-specific resins and functional materials into ongoing industrial processes, with technical formulation support that can improve customer retention and support performance-based pricing. This specialized B2B model provides a more durable demand base than purely spot commodity sales.
Negative Factors
Thin profitability and low returns
Despite the earnings recovery, Arakawa retains limited bottom-line cushioning, with TTM net margin around 2.7% and ROE near 3.7%. Thin profitability leaves less protection against input-cost pressure or weaker demand and indicates that the enlarged capital base is not yet producing strong shareholder returns.
Read all positive and negative factors
Positive Factors
Negative Factors
Specialty B2B application model
Arakawa sells application-specific resins and functional materials into ongoing industrial processes, with technical formulation support that can improve customer retention and support performance-based pricing. This specialized B2B model provides a more durable demand base than purely spot commodity sales.
Read all positive factors
Arakawa Chemical Industries,Ltd. (4968) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥42.30B
Dividend Yield2.35%
Average Volume (3M)299.92K
Price to Earnings (P/E)14.2
Beta (1Y)1.26
Revenue Growth4.51%
EPS Growth115.09%
CountryJP
Employees1,684
SectorGeneral
Sector StrengthN/A
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)149.41
Shares Outstanding20,652,400
10 Day Avg. Volume188,350
30 Day Avg. Volume299,920
Financial Highlights & Ratios
PEG Ratio-0.68
Price to Book (P/B)0.40
Price to Sales (P/S)0.30
P/FCF Ratio50.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)151.2
Revenue Forecast (FY)¥88.10B
Arakawa Chemical Industries,Ltd. Business Overview & Revenue Model
Company Description
Arakawa Chemical Industries, Ltd. is a global chemical producer with operations across Asia, China, Europe, and the United States. The company specializes in the development and sale of diverse chemical products, including performance coatings, ma...
How the Company Makes Money
Arakawa Chemical Industries primarily makes money by selling specialty chemical products to business customers (B2B). Revenue is generated through: (1) Product sales of resins and functional chemical materials that are formulated for customer appl...
Arakawa Chemical Industries,Ltd. Financial Statement Overview
Summary
Income Statement
66
Positive
Balance Sheet
62
Positive
Cash Flow
48
Neutral
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 84.52B | 82.14B | 80.24B | 72.22B | 79.43B | 80.52B |
| Gross Profit | 18.67B | 17.05B | 16.09B | 11.68B | 11.57B | 17.97B |
| EBITDA | 9.22B | 8.09B | 9.00B | 4.76B | 49.00M | 6.29B |
| Net Income | 2.96B | 2.20B | 2.64B | -1.04B | -4.94B | 1.50B |
Balance Sheet | ||||||
| Total Assets | 128.49B | 126.06B | 122.30B | 125.42B | 119.03B | 117.74B |
| Cash, Cash Equivalents and Short-Term Investments | 9.97B | 10.60B | 9.43B | 11.58B | 11.14B | 10.37B |
| Total Debt | 39.93B | 40.62B | 39.41B | 42.42B | 35.16B | 26.87B |
| Total Liabilities | 67.08B | 66.82B | 65.06B | 68.50B | 62.52B | 55.16B |
| Stockholders Equity | 64.94B | 62.36B | 58.47B | 56.13B | 54.08B | 59.18B |
Cash Flow | ||||||
| Free Cash Flow | 2.20B | 496.00M | 712.00M | -5.70B | -6.69B | -2.43B |
| Operating Cash Flow | 5.51B | 4.18B | 5.12B | 1.16B | -575.00M | 3.99B |
| Investing Cash Flow | -2.68B | -2.10B | -3.24B | -7.14B | -6.05B | -7.40B |
| Financing Cash Flow | -2.68B | -286.00M | -4.70B | 5.48B | 6.67B | 4.93B |
Arakawa Chemical Industries,Ltd. Technical Analysis
Positive
1066.00
Price Trends
2153.18
Negative
1857.27
Positive
1560.96
Positive
Market Momentum
-17.46
Positive
48.34
Neutral
34.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4968, the sentiment is Positive. The current price of 1066 is below the 20-day moving average (MA) of 2217.35, below the 50-day MA of 2153.18, and below the 200-day MA of 1560.96, indicating a neutral trend. The MACD of -17.46 indicates Positive momentum. The RSI at 48.34 is Neutral, neither overbought nor oversold. The STOCH value of 34.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4968.
Arakawa Chemical Industries,Ltd. Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | ¥27.87B | 14.47 | ― | 2.81% | 4.51% | 1.90% | |
67 Neutral | ¥58.44B | 12.12 | ― | 3.95% | -2.70% | 18.12% | |
67 Neutral | ¥32.90B | 12.78 | ― | 3.45% | 2.72% | 24.14% | |
65 Neutral | ¥42.30B | 14.24 | ― | 2.47% | 4.51% | 115.09% | |
63 Neutral | ¥45.51B | 18.80 | ― | 3.37% | 2.17% | 4.31% | |
62 Neutral | ¥26.93B | 15.76 | ― | 5.38% | 60.90% | 21.44% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% |
* General Sector Average
JP:4968
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Arakawa Chemical Industries,Ltd. Corporate Events
Arakawa Chemical Industries Delivers Strong Profit Rebound in FY2026 First Quarter
Aug 5, 2026
Arakawa Chemical Industries reported consolidated net sales of ¥22.3 billion for the first quarter of FY2026, up 12.0% year on year, with operating income surging to ¥1.64 billion and ordinary income rising sharply to ¥1.62 billion,...
Arakawa Chemical Delivers Profit Surge and Plans Higher Dividends for FY2027
Aug 5, 2026
Arakawa Chemical Industries reported strong earnings for the quarter ended June 30, 2026, with net sales rising 12.0% year on year to ¥22.28 billion and operating profit surging 140.3% to ¥1.64 billion. Profit attributable to owners of p...
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.