Denka Co., Ltd. (4061) 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

Japan Material Co., Ltd.

Nifco, Inc.

Tosoh Corp.

Denka Co., Ltd.

Kaneka Corp.

NOF Corp.

Daicel Corp.

UBE Corp.

Resonac Holdings Corp.

Air Water, Inc.

Mitsubishi Gas Chemical Co., Inc.

Why is Denka Co., Ltd. ?

The company is Net-Debt Free

Poor long term growth as Net Sales has grown by an annual rate of 1.92% and Operating profit at -10.19% over the last 5 years
The company is Net-Debt Free

Poor long term growth as Net Sales has grown by an annual rate of 1.92% and Operating profit at -10.19% over the last 5 years

With a growth in Net Profit of 522.17%, the company declared Outstanding results in Mar 26

The company has declared positive results for the last 2 consecutive quarters
ROCE(HY) Highest at 5.17%
RAW MATERIAL COST(Y) Fallen by -33.58% (YoY)
DEBTORS TURNOVER RATIO(HY) Highest at 4.37 times

With ROCE of 4.26%, it has a risky valuation with a 1.02 Enterprise value to Capital Employed

The stock is trading at a premium compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of 139.15%, its profits have fallen by -89%
At the current price, the company has a high dividend yield of 0

Market Beating Performance

The stock has generated a return of 139.15% in the last 1 year, much higher than market (Japan Nikkei 225) returns of 88.41%

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Denka Co., 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 Denka Co., Ltd. for you?

Medium Risk, High Return

Absolute

Risk Adjusted

Volatility

Denka Co., Ltd.

139.15%

2.69

40.69%

Japan Nikkei 225

88.41%

3.25

27.24%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

1.92%

EBIT Growth (5y)

-10.19%

EBIT to Interest (avg)

25.70

Debt to EBITDA (avg)

2.82

Net Debt to Equity (avg)

0.61

Sales to Capital Employed (avg)

0.78

Tax Ratio

0.15%

Dividend Payout Ratio

Pledged Shares

Institutional Holding

0.17%

ROCE (avg)

6.45%

ROE (avg)

5.91%

Valuation

Valuation Scorecard

Valuation grade scale :

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

Valuation Key Factors

Factor

Value

P/E Ratio

190

Industry P/E

Price to Book Value

1.03

EV to EBIT

23.85

EV to EBITDA

9.96

EV to Capital Employed

1.02

EV to Sales

1.27

PEG Ratio

Dividend Yield

ROCE (Latest)

4.26%

ROE (Latest)

0.54%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bullish

RSI

No Signal

Bearish

Bollinger Bands

Bullish

Moving Averages

Bullish (Daily)

KST

Mildly Bearish

Bullish

Dow Theory

No Trend

Mildly Bullish

OBV

No Trend

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

23What is working for the Company

ROCE(HY)

Highest at 5.17%

RAW MATERIAL COST(Y)

Fallen by -33.58% (YoY

DEBTORS TURNOVER RATIO(HY)

Highest at 4.37 times

PRE-TAX PROFIT(Q)

Highest at JPY 12,398 MM

NET PROFIT(Q)

Highest at JPY 9,647.54 MM

EPS(Q)

Highest at JPY 117.87

-4What is not working for the Company

INTEREST(Q)

At JPY 534 MM has Grown at 23.04%

INVENTORY TURNOVER RATIO(HY)

Lowest at 2.25 times

NET SALES(Q)

Lowest at JPY 93,473 MM

Here's what is working for Denka Co., Ltd.

Pre-Tax Profit

At JPY 12,398 MM has Grown at 606.04%

over average net sales of the previous four periods of JPY 1,756 MM

MOJO Watch

Near term Pre-Tax Profit trend is very positive

Pre-Tax Profit (JPY MM)

Net Profit

At JPY 9,647.54 MM has Grown at 302.98%

over average net sales of the previous four periods of JPY 2,394.05 MM

MOJO Watch

Near term Net Profit trend is very positive

Net Profit (JPY MM)

Pre-Tax Profit

Highest at JPY 12,398 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 9,647.54 MM

in the last five periods

MOJO Watch

Near term Net Profit trend is positive

Net Profit (JPY MM)

EPS

Highest at JPY 117.87

in the last five periods

MOJO Watch

Increasing profitability; company has created higher earnings for shareholders

EPS (JPY)

Debtors Turnover Ratio

Highest at 4.37 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 -33.58% (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

Depreciation

Highest at JPY 7,472 MM

in the last five periods

MOJO Watch

The expenditure on assets done by the company may have gone into operation

Depreciation (JPY MM)

Here's what is not working for Denka Co., Ltd.

Interest

At JPY 534 MM has Grown at 23.04%

period on period (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (JPY MM)

Net Sales

Lowest at JPY 93,473 MM

in the last five periods

MOJO Watch

Near term sales trend is negative

Net Sales (JPY MM)

Inventory Turnover Ratio

Lowest at 2.25 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling inventory has slowed

Inventory Turnover Ratio