Showa Chemical Industry Co Ltd

Showa Chemical Industry Co Ltd maintains a strong liquidity position with JPY 314.94 billion in cash and equivalents, but its long-term debt of JPY 321.37 billion results in a net cash position of negative JPY 6.43 billion. The company's liquidity FPT (free cash flow to total debt) is weak, and its price-to-book ratio of 0.69 suggests undervaluation relative to tangible assets.

Profitability metrics are mixed. The company reported a net income of JPY 42.47 billion despite an operating loss of JPY 1.13 billion, indicating non-operating income or gains offsetting operational performance. Return on equity (ROE) of 0.56% and return on assets (ROA) of 0.31% are below typical thresholds for industry-leading performance.

The company's revenue is concentrated in a single business segment, with no disclosed geographic diversification. This lack of segmentation data limits visibility into regional exposure and potential concentration risks.

Growth prospects are constrained. The company's revenue of JPY 212.25 billion in the latest period shows no clear trajectory of expansion. Analysts reported a last actual revenue of JPY 9.24 billion, which is significantly lower than the full-year figure, suggesting potential seasonality or reporting inconsistencies.

Risk factors include medium liquidity risk due to the negative net cash position and a debt-to-equity ratio of 0.42. The company's dilution risk is assessed as low, with no near-term pressure from share issuance or convertible debt. However, the operating loss of JPY 1.13 billion raises concerns about earnings sustainability.

Recent filings and transcripts indicate no major strategic shifts or capital-raising activities. The company's capital expenditure of JPY 30.38 billion in the latest period suggests ongoing investment in infrastructure, but the operating cash flow of JPY 82.55 billion supports this spending.

Showa Chemical generated JPY 9.2 billion in FY2025 revenue, demonstrating stable top-line performance despite margin pressures.

The company reduced long-term debt to JPY 2.9 billion in FY2025, reflecting a consistent deleveraging trend over four years.

Cash conversion of 19.44% ranks as best-in-class within the Commodity Chemicals cohort, indicating superior cash generation efficiency.

Revenue grew at a 4.7% CAGR from FY2021 to FY2025, showing consistent long-term top-line expansion capabilities.

Dilution risk is assessed as low, suggesting minimal threat to existing shareholder equity value from share issuance.

The company faces high credit risk, indicating potential difficulties in meeting financial obligations or securing favorable financing terms.

Revenue ¥2.30B, +0,6% YoY; Operating income +59,7% YoY.

• ▍Revenue ¥2.30B, +0,6% YoY
• ▍Operating income +59,7% YoY
• ▍Net income +62,0% YoY
• ▍Net margin 9.7%

Revenue ¥2.35B, −1,9% YoY; Operating income +28,0% YoY.

• ▍Revenue ¥2.35B, −1,9% YoY
• ▍Operating income +28,0% YoY
• ▍Net income +162,1% YoY
• ▍Net margin 7.2%

Revenue ¥2.50B, +3,0% YoY; Operating income +76,9% YoY.

• ▍Revenue ¥2.50B, +3,0% YoY
• ▍Operating income +76,9% YoY
• ▍Net income +46,3% YoY
• ▍Net margin 6.7%

Revenue ¥2.14B, +0,6% YoY; Operating income +3 459,2% YoY.

• ▍Revenue ¥2.14B, +0,6% YoY
• ▍Operating income +3 459,2% YoY
• ▍Net income +124,7% YoY
• ▍Net margin 4.5%

Revenue ¥2.29B; Operating income ¥97.7M.

• ▍Revenue ¥2.29B
• ▍Operating income ¥97.7M
• ▍Net margin 6.0%

Revenue ¥2.39B; Operating income ¥101.0M.

• ▍Revenue ¥2.39B
• ▍Operating income ¥101.0M
• ▍Net margin 2.7%

Revenue ¥2.42B; Operating income ¥83.4M.

• ▍Revenue ¥2.42B
• ▍Operating income ¥83.4M
• ▍Net margin 4.7%

Revenue ¥2.12B; Operating income -¥1.1M.

• ▍Revenue ¥2.12B
• ▍Operating income -¥1.1M
• ▍Net margin 2.0%

Revenue ¥9.24B, +0,4% YoY; Operating income −35,6% YoY.

• ▍Revenue ¥9.24B, +0,4% YoY
• ▍Operating income −35,6% YoY
• ▍Net income −29,5% YoY
• ▍Free cash flow −58,4% YoY
• ▍Net margin 4.5%

Revenue ¥9.20B, −0,3% YoY; Operating income −14,4% YoY.

• ▍Revenue ¥9.20B, −0,3% YoY
• ▍Operating income −14,4% YoY
• ▍Net income −5,2% YoY
• ▍Free cash flow −26,1% YoY
• ▍Net margin 6.4%

Revenue ¥9.23B, +18,6% YoY; Operating income +111,6% YoY.

• ▍Revenue ¥9.23B, +18,6% YoY
• ▍Operating income +111,6% YoY
• ▍Net income +78,7% YoY
• ▍Free cash flow +35,2% YoY
• ▍Net margin 6.7%

Revenue ¥7.78B, +1,4% YoY; Operating income −6,9% YoY.

• ▍Revenue ¥7.78B, +1,4% YoY
• ▍Operating income −6,9% YoY
• ▍Net income +18,1% YoY
• ▍Free cash flow +31,1% YoY
• ▍Net margin 4.4%