Sekisui Kasei Co Ltd

Sekisui Kasei's capital structure shows a debt-to-equity ratio of 0.72, indicating a moderate reliance on debt financing. The company's liquidity position is characterized by a current ratio of 1.24, suggesting it has sufficient short-term assets to cover its short-term liabilities. However, the company's operating cash flow is negative at -687 million JPY, and free cash flow is only 104 million JPY, which may limit its ability to fund operations and growth without external financing.

Profitability metrics for Sekisui Kasei are weak, with a return on equity of 0.0023 and a return on assets of 0.0009. These figures are below the typical thresholds for healthy returns in the commodity chemicals industry. The company reported an operating loss of 236 million JPY, despite a gross profit of 6.25 billion JPY, indicating significant operating expenses or cost pressures. The net income of 125 million JPY is a narrow profit, suggesting the company is barely breaking even after all expenses.

The company's revenue is concentrated in a single business segment, as disclosed in its financial statements, with no material geographic diversification reported. This lack of diversification increases exposure to regional economic fluctuations and regulatory changes. The absence of detailed segment reporting limits the ability to assess the performance of individual product lines or geographic regions.

Looking ahead, Sekisui Kasei's growth trajectory appears uncertain. Analysts have estimated a mean revenue of 114 billion JPY for the upcoming period, significantly lower than the last actual revenue of 137.07 billion JPY. The company's operating income is expected to remain negative, and the net income is projected to be flat or declining. These trends suggest a challenging operating environment, potentially driven by weak demand or rising input costs.

The risk assessment for Sekisui Kasei highlights medium liquidity risk and low dilution risk. The company's net cash position is negative after subtracting total debt, which could constrain its ability to meet short-term obligations without additional financing. However, the low dilution risk indicates that the company is not expected to issue a significant number of new shares in the near term, preserving shareholder value.

Recent events and disclosures show that Sekisui Kasei has faced declining earnings, with the last actual EPS at -138.26 JPY. The company's capital expenditures were -1.07 billion JPY, indicating a reduction in investment in new projects or facilities. These developments suggest a defensive financial strategy, possibly in response to market conditions or internal cost management initiatives.

Operating income surged 147.8% year-over-year to JPY 2.17 billion in FY2026, signaling a strong operational recovery.

Free cash flow improved by 145.3% to JPY 3.0 billion in FY2026, demonstrating significant cash generation capability.

Long-term debt decreased to JPY 38.8 billion in FY2026, reflecting a deliberate deleveraging strategy and improved balance sheet health.

Net income turned positive at JPY 2.15 billion in FY2026, reversing the previous year's loss of JPY 5.96 billion.

Dilution risk is assessed as low, providing stability for existing shareholders amidst the company's financial restructuring efforts.

Operating margin of -0.7% ranks in the bottom quartile of the Commodity Chemicals cohort, highlighting severe profitability issues.

Credit risk is flagged as high, suggesting potential difficulties in meeting financial obligations or securing favorable financing terms.

Return on equity of 0.23% falls significantly below the cohort median of 3.61%, showing poor capital efficiency.

Cash conversion ratio of -5.5 is in the bottom quartile, indicating poor ability to convert earnings into cash.

Revenue ¥23.53B, −28,9% YoY; Operating income +114,0% YoY.

• ▍Revenue ¥23.53B, −28,9% YoY
• ▍Operating income +114,0% YoY
• ▍Net income +176,3% YoY
• ▍Free cash flow +176,1% YoY
• ▍Net margin 19.4%

Revenue ¥24.69B, −29,3% YoY; Operating income +476,6% YoY.

• ▍Revenue ¥24.69B, −29,3% YoY
• ▍Operating income +476,6% YoY
• ▍Net income +163,6% YoY
• ▍Free cash flow +288,4% YoY
• ▍Net margin 4.2%

Revenue ¥33.76B, −4,3% YoY; Operating income +90,7% YoY.

• ▍Revenue ¥33.76B, −4,3% YoY
• ▍Operating income +90,7% YoY
• ▍Net income −719,9% YoY
• ▍Free cash flow −370,6% YoY
• ▍Net margin -12.1%

Revenue ¥31.96B, −5,4% YoY; Operating income +144,9% YoY.

• ▍Revenue ¥31.96B, −5,4% YoY
• ▍Operating income +144,9% YoY
• ▍Net income +388,0% YoY
• ▍Free cash flow +648,1% YoY
• ▍Net margin 1.9%

Revenue ¥33.10B; Operating income -¥4.72B.

• ▍Revenue ¥33.10B
• ▍Operating income -¥4.72B
• ▍Net margin -18.1%

Revenue ¥34.91B; Operating income ¥158.0M.

• ▍Revenue ¥34.91B
• ▍Operating income ¥158.0M
• ▍Net margin 1.1%

Revenue ¥35.27B; Operating income ¥257.0M.

• ▍Revenue ¥35.27B
• ▍Operating income ¥257.0M
• ▍Net margin -1.4%

Revenue ¥33.79B; Operating income -¥236.0M.

• ▍Revenue ¥33.79B
• ▍Operating income -¥236.0M
• ▍Net margin 0.4%

Revenue ¥113.94B, −16,9% YoY; Operating income +147,8% YoY.

• ▍Revenue ¥113.94B, −16,9% YoY
• ▍Operating income +147,8% YoY
• ▍Net income +136,1% YoY
• ▍Free cash flow +145,3% YoY
• ▍Net margin 1.9%

Revenue ¥137.07B, +5,2% YoY; Operating income −581,5% YoY.

• ▍Revenue ¥137.07B, +5,2% YoY
• ▍Operating income −581,5% YoY
• ▍Net income −649,5% YoY
• ▍Free cash flow −369,4% YoY
• ▍Net margin -4.3%

Revenue ¥130.26B, +4,5% YoY; Operating income +26,9% YoY.

• ▍Revenue ¥130.26B, +4,5% YoY
• ▍Operating income +26,9% YoY
• ▍Net income +138,8% YoY
• ▍Free cash flow −4,8% YoY
• ▍Net margin 0.8%

Revenue ¥124.68B, +6,0% YoY; Operating income +115,0% YoY.

• ▍Revenue ¥124.68B, +6,0% YoY
• ▍Operating income +115,0% YoY
• ▍Net income +107,7% YoY
• ▍Free cash flow +160,5% YoY
• ▍Net margin 0.4%