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Arakawa Chemical Industries Ltd.

  • Market Cap: Small Cap
  • Industry: Specialty Chemicals
  • ISIN: JP3125000004
JPY
2,238.00
-14 (-0.62%)

Aug 10

TKS

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  • Price Points
  • Score
  • Mojo Parameters
  • Total Return
  • News and Corporate Actions
  • Key factors
  • Shareholding
  • Financials
  • CompanyCV
stock-recommendationScore
Click here to find our call on this stock
Strong Sell
Sell
Hold
Buy
Strong Buy

Comparison

Company
Score
Quality
Valuation
Financial
Technical
Harima Chemicals Group, Inc.
Tomoe Engineering Co., Ltd.
Parker Corp.
Nihon Kagaku Sangyo Co., Ltd.
Arakawa Chemical Industries Ltd.
Okura Industrial Co., Ltd.
Keiyo Gas Co., Ltd.
Sakai Chemical Industry Co., Ltd.
Gun Ei Chemical Industry Co., Ltd.
Tayca Corp.
Tanaka Chemical Corp.

Why is Arakawa Chemical Industries Ltd. ?

1
Poor Management Efficiency with a low ROCE of 1.91%
  • The company has been able to generate a Return on Capital Employed (avg) of 1.91% signifying low profitability per unit of total capital (equity and debt)
2
Low ability to service debt as the company has a high Debt to EBITDA ratio of 5.02 times
  • Low ability to service debt as the company has a high Debt to EBITDA ratio of 5.02 times
  • The company has been able to generate a Return on Equity (avg) of 1.96% signifying low profitability per unit of shareholders funds
3
Poor long term growth as Net Sales has grown by an annual rate of 3.40% and Operating profit at -11.95% over the last 5 years
4
With a growth in Net Profit of 48.97%, the company declared Outstanding results in Jun 26
  • OPERATING CASH FLOW(Y) Highest at JPY 5,507 MM
  • ROCE(HY) Highest at 4.83%
  • INTEREST COVERAGE RATIO(Q) Highest at 2,238.28
5
With ROE of 0.59%, it has a very attractive valuation with a 0.64 Price to Book Value
  • Over the past year, while the stock has generated a return of 98.07%, its profits have risen by 277.9% ; the PEG ratio of the company is 0.4
stock-recommendationReal-Time Research Report

Verdict Report

How much should you hold?

  1. Overall Portfolio exposure to Arakawa Chemical Industries Ltd. should be less than 10%
  2. Overall Portfolio exposure to Specialty Chemicals should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Specialty Chemicals)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Arakawa Chemical Industries Ltd. for you?

High Risk, High Return

Absolute
Risk Adjusted
Volatility
Arakawa Chemical Industries Ltd.
96.49%
1.76
55.72%
Japan Nikkei 225
60.14%
2.04
29.37%
stock-recommendationQuality
stock-summaryManagement Risk
stock-summaryGrowth
stock-summaryCapital Structure
stock-recommendation
Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor
Value
Sales Growth (5y)
3.40%
EBIT Growth (5y)
-11.95%
EBIT to Interest (avg)
0.47
Debt to EBITDA (avg)
7.08
Net Debt to Equity (avg)
0.51
Sales to Capital Employed (avg)
0.79
Tax Ratio
72.30%
Dividend Payout Ratio
45.07%
Pledged Shares
0
Institutional Holding
0
ROCE (avg)
1.44%
ROE (avg)
1.96%
stock-recommendationValuation

Valuation Scorecard stock-summary

stock-recommendation
Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors stock-summary

Factor
Value
P/E Ratio
110
Industry P/E
Price to Book Value
0.64
EV to EBIT
48.29
EV to EBITDA
9.43
EV to Capital Employed
0.77
EV to Sales
0.88
PEG Ratio
0.39
Dividend Yield
NA
ROCE (Latest)
1.60%
ROE (Latest)
0.59%
stock-recommendationTechnicals

Technical key factors

Indicator
Weekly
Monthly
MACD
Bullish
Bullish
RSI
No Signal
No Signal
Bollinger Bands
Mildly Bullish
Bullish
Moving Averages
Bullish (Daily)
KST
Bullish
Bullish
Dow Theory
No Trend
Mildly Bullish
OBV
No Trend
No Trend
stock-recommendation Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish  Turned 
Technical Movement
Analyse All Technical Factors stock-recommendation
stock-recommendationFinancial Trend

Financial Trend Scorecard stock-summary

stock-recommendation
Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

28What is working for the Company
OPERATING CASH FLOW(Y)

Highest at JPY 5,507 MM

ROCE(HY)

Highest at 4.83%

INTEREST COVERAGE RATIO(Q)

Highest at 2,238.28

RAW MATERIAL COST(Y)

Fallen by -11.79% (YoY

DEBT-EQUITY RATIO (HY)

Lowest at 46.14 %

DEBTORS TURNOVER RATIO(HY)

Highest at 2.99 times

NET SALES(Q)

Highest at JPY 22,282 MM

OPERATING PROFIT(Q)

Highest at JPY 2,865 MM

OPERATING PROFIT MARGIN(Q)

Highest at 12.86 %

PRE-TAX PROFIT(Q)

Highest at JPY 1,591 MM

NET PROFIT(Q)

Highest at JPY 1,296 MM

EPS(Q)

Highest at JPY 65.33

-5What is not working for the Company
INTEREST(HY)

At JPY 256 MM has Grown at 14.29%

Here's what is working for Arakawa Chemical Industries Ltd.

Operating Cash Flow
Highest at JPY 5,507 MM and Grown
In each year in the last three years
MOJO Watch
The company has generated higher cash revenues from business operations

Operating Cash Flows (JPY MM)

Interest Coverage Ratio
Highest at 2,238.28
in the last five periods
MOJO Watch
The company's ability to manage interest payments is improving

Operating Profit to Interest

Pre-Tax Profit
At JPY 1,591 MM has Grown at 133.54%
over average net sales of the previous four periods of JPY 681.25 MM
MOJO Watch
Near term Pre-Tax Profit trend is very positive

Pre-Tax Profit (JPY MM)

Net Profit
At JPY 1,296 MM has Grown at 133.18%
over average net sales of the previous four periods of JPY 555.8 MM
MOJO Watch
Near term Net Profit trend is very positive

Net Profit (JPY MM)

Net Sales
Highest at JPY 22,282 MM
in the last five periods
MOJO Watch
Near term sales trend is positive

Net Sales (JPY MM)

Operating Profit
Highest at JPY 2,865 MM
in the last five periods
MOJO Watch
Near term Operating Profit trend is positive

Operating Profit (JPY MM)

Operating Profit Margin
Highest at 12.86 %
in the last five periods
MOJO Watch
Company's profit margin has improved

Operating Profit to Sales

Pre-Tax Profit
Highest at JPY 1,591 MM
in the last five periods
MOJO Watch
Near term Pre-Tax Profit trend is positive

Pre-Tax Profit (JPY MM)

Net Profit
Highest at JPY 1,296 MM
in the last five periods
MOJO Watch
Near term Net Profit trend is positive

Net Profit (JPY MM)

EPS
Highest at JPY 65.33
in the last five periods
MOJO Watch
Increasing profitability; company has created higher earnings for shareholders

EPS (JPY)

Debt-Equity Ratio
Lowest at 46.14 %
in the last five Semi-Annual periods
MOJO Watch
The company has been reducing its borrowing as compared to equity capital

Debt-Equity Ratio

Debtors Turnover Ratio
Highest at 2.99 times
in the last five Semi-Annual periods
MOJO Watch
Company has been able to sell its Debtors faster

Debtors Turnover Ratio

Raw Material Cost
Fallen by -11.79% (YoY)
MOJO Watch
The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Here's what is not working for Arakawa Chemical Industries Ltd.

Interest
At JPY 256 MM has Grown at 14.29%
over previous Semi-Annual period
MOJO Watch
Rising interest cost signifies increased borrowings

Interest Paid (JPY MM)

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