Nippon Chemi-Con Corp

Nippon Chemi-Con Corp has a market capitalization of ¥92.41 billion and a price-to-earnings ratio of 108.59, indicating a high valuation relative to earnings. The company's liquidity position is characterized by a current ratio of 1.4, suggesting moderate short-term liquidity. However, the company's operating cash flow is negative at ¥-12.96 billion, and capital expenditures are also negative at ¥-9.46 billion, indicating significant cash outflows for operations and investments.

Profitability metrics show a return on equity (ROE) of 1.6% and a return on assets (ROA) of 0.49%, both of which are below the industry median for electrical components and equipment. The company's gross profit of ¥7.11 billion and operating income of ¥1.89 billion reflect modest profitability, with a net income of ¥851 million. The debt-to-equity ratio of 1.68 indicates a relatively high level of leverage, which could pose a risk in a rising interest rate environment.

The company's revenue is concentrated in a single business segment, with no disclosed geographic diversification. This lack of diversification may expose the company to sector-specific risks, such as supply chain disruptions or demand fluctuations in the electronics industry.

Looking ahead, the company's revenue is expected to grow, but the exact rate is not specified. The current fiscal year's outlook is not provided, but the next fiscal year's direction is not explicitly stated. The company's capital expenditures and operating cash flow suggest a focus on maintaining and expanding its production capabilities.

The company's risk assessment indicates a medium liquidity risk and a low dilution risk. The key flag of negative net cash after subtracting total debt highlights the company's reliance on external financing to meet its obligations. The dilution potential is low, and no significant adjustments have been applied to the valuation metrics.

Recent events, such as analyst estimates and price targets, suggest a cautious outlook from the investment community. The mean price target is ¥1,030, with a median of ¥1,030, and the highest and lowest price targets are ¥1,180 and ¥880, respectively. The mean recommendation is 3.67, indicating a "hold" rating, with no strong buy or buy recommendations.

Operating income surged 113.7% year-over-year to JPY 2.77 billion, signaling a strong operational recovery in FY2025.

Net income improved by 100.2% year-over-year, turning a significant loss into a near-break-even position of JPY 38 million.

Operating margin of 5.4% exceeds the 5.25% median for the Electrical Components & Equipment cohort of 600 peers.

Free cash flow improved by 88.8% year-over-year, narrowing the deficit to JPY 2.69 billion in FY2025.

Debt-to-equity ratio of 1.68 sits in the bottom quartile, significantly exceeding the 0.24 cohort median.

The company faces high credit risk and medium liquidity risk, complicating its financial stability outlook.

Return on equity of 1.6% is well below the 3.37% median for the Electrical Components & Equipment cohort.

Revenue ¥35.90B, +16,1% YoY; Operating income +282,1% YoY.

• ▍Revenue ¥35.90B, +16,1% YoY
• ▍Operating income +282,1% YoY
• ▍Net income +1 601,6% YoY
• ▍Net margin 2.7%

Revenue ¥33.36B, +9,0% YoY; Operating income −39,5% YoY.

• ▍Revenue ¥33.36B, +9,0% YoY
• ▍Operating income −39,5% YoY
• ▍Net income +219,3% YoY
• ▍Net margin 1.3%

Revenue ¥30.89B, +5,4% YoY; Operating income −70,8% YoY.

• ▍Revenue ¥30.89B, +5,4% YoY
• ▍Operating income −70,8% YoY
• ▍Net income −138,6% YoY
• ▍Net margin -0.6%

Revenue ¥31.86B, −8,2% YoY; Operating income −23,0% YoY.

• ▍Revenue ¥31.86B, −8,2% YoY
• ▍Operating income −23,0% YoY
• ▍Net income −97,3% YoY
• ▍Net margin 0.1%

Revenue ¥30.91B; Operating income -¥536.0M.

• ▍Revenue ¥30.91B
• ▍Operating income -¥536.0M
• ▍Net margin -0.2%

Revenue ¥30.62B; Operating income ¥1.33B.

• ▍Revenue ¥30.62B
• ▍Operating income ¥1.33B
• ▍Net margin -1.2%

Revenue ¥29.30B; Operating income ¥520.0M.

• ▍Revenue ¥29.30B
• ▍Operating income ¥520.0M
• ▍Net margin 1.5%

Revenue ¥34.72B; Operating income ¥1.89B.

• ▍Revenue ¥34.72B
• ▍Operating income ¥1.89B
• ▍Net margin 2.5%

Revenue ¥122.68B, −18,6% YoY; Operating income +113,7% YoY.

• ▍Revenue ¥122.68B, −18,6% YoY
• ▍Operating income +113,7% YoY
• ▍Net income +100,2% YoY
• ▍Free cash flow +88,8% YoY
• ▍Net margin 0.0%

Revenue ¥150.74B, −6,9% YoY; Operating income −409,1% YoY.

• ▍Revenue ¥150.74B, −6,9% YoY
• ▍Operating income −409,1% YoY
• ▍Net income −1 036,2% YoY
• ▍Free cash flow −1 391,8% YoY
• ▍Net margin -14.1%

Revenue ¥161.88B, +15,4% YoY; Operating income +168,0% YoY.

• ▍Revenue ¥161.88B, +15,4% YoY
• ▍Operating income +168,0% YoY
• ▍Net income +118,8% YoY
• ▍Free cash flow +116,4% YoY
• ▍Net margin 1.4%

Revenue ¥140.32B, +26,6% YoY; Operating income −430,6% YoY.

• ▍Revenue ¥140.32B, +26,6% YoY
• ▍Operating income −430,6% YoY
• ▍Net income −694,6% YoY
• ▍Free cash flow −349,5% YoY
• ▍Net margin -8.6%