Arakawa Chemical Industries Ltd. (4968) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

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.

Sakai Chemical Industry Co., Ltd.

Gun Ei Chemical Industry Co., Ltd.

Keiyo Gas Co., Ltd.

Tayca Corp.

Tanaka Chemical Corp.

Why is Arakawa Chemical Industries Ltd. ?

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)

Low ability to service debt as the company has a high Debt to EBITDA ratio of 5.65 times

Low ability to service debt as the company has a high Debt to EBITDA ratio of 5.65 times
The company has been able to generate a Return on Equity (avg) of 1.96% signifying low profitability per unit of shareholders funds

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

Flat results in Mar 26

INTEREST(Q) Highest at JPY 128 MM

With ROE of 0.59%, it has a very attractive valuation with a 0.48 Price to Book Value

Over the past year, while the stock has generated a return of 106.73%, its profits have risen by 277.9% ; the PEG ratio of the company is 0.3

Market Beating Performance

The stock has generated a return of 106.73% in the last 1 year, much higher than market (Japan Nikkei 225) returns of 85.83%

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Arakawa Chemical Industries Ltd. should be less than 10%
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?

Medium Risk, Medium Return

Absolute

Risk Adjusted

Volatility

Arakawa Chemical Industries Ltd.

106.73%

2.02

41.49%

Japan Nikkei 225

85.83%

3.09

27.80%

Quality

Management Risk

Growth

Capital Structure

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)

4.31

Debt to EBITDA (avg)

6.75

Net Debt to Equity (avg)

0.51

Sales to Capital Employed (avg)

0.78

Tax Ratio

62.96%

Dividend Payout Ratio

36.77%

Pledged Shares

Institutional Holding

ROCE (avg)

1.91%

ROE (avg)

1.96%

Valuation

Valuation Scorecard

Valuation grade scale :

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

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

0.48

EV to EBIT

41.97

EV to EBITDA

8.20

EV to Capital Employed

0.67

EV to Sales

0.76

PEG Ratio

0.30

Dividend Yield

ROCE (Latest)

1.60%

ROE (Latest)

0.59%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bullish

RSI

Bearish

No Signal

Bollinger Bands

Bullish

Moving Averages

Bullish (Daily)

KST

Bullish

Dow Theory

Mildly Bullish

OBV

Bullish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

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

8What is working for the Company

RAW MATERIAL COST(Y)

Fallen by -10.41% (YoY

DEBT-EQUITY RATIO (HY)

Lowest at 48.19 %

NET PROFIT(Q)

Highest at JPY 795.35 MM

EPS(Q)

Highest at JPY 43.85

-8What is not working for the Company

INTEREST(Q)

Highest at JPY 128 MM

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

Net Profit

Highest at JPY 795.35 MM

in the last five periods

MOJO Watch

Near term Net Profit trend is positive

Net Profit (JPY MM)

Net Profit

At JPY 795.35 MM has Grown at 76.27%

over average net sales of the previous four periods of JPY 451.22 MM

MOJO Watch

Near term Net Profit trend is positive

Net Profit (JPY MM)

EPS

Highest at JPY 43.85

in the last five periods

MOJO Watch

Increasing profitability; company has created higher earnings for shareholders

EPS (JPY)

Debt-Equity Ratio

Lowest at 48.19 %

in the last five Semi-Annual periods

MOJO Watch

The company has been reducing its borrowing as compared to equity capital

Debt-Equity Ratio

Raw Material Cost

Fallen by -10.41% (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 128 MM has Grown at 11.3%

period on period (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (JPY MM)

Interest

Highest at JPY 128 MM

in the last five periods and Increased by 11.3% (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (JPY MM)