KH Neochem Co., Ltd. (4189) 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

Nippon Shokubai Co., Ltd.

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JCU Corp.

Nippon Soda Co., Ltd.

KH Neochem Co., Ltd.

Mitsui Chemicals, Inc.

Kuraray Co., Ltd.

Nippon Kayaku Co., Ltd.

Mitsui & Co., Ltd.

Mitsubishi Chemical Group Corp.

Why is KH Neochem Co., Ltd. ?

High Management Efficiency with a high ROCE of 16.34%

Company has very low debt and has enough cash to service the debt requirements

Poor long term growth as Operating profit has grown by an annual rate 7.72% of over the last 5 years

Negative results in Dec 25

INTEREST(HY) At JPY 96 MM has Grown at 74.55%
NET SALES(Q) At JPY 28,511 MM has Fallen at -13.54%
PRE-TAX PROFIT(Q) At JPY 2,535 MM has Fallen at -47.99%

With ROCE of 14.42%, it has a very attractive valuation with a 1.31 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 5.89%, its profits have risen by 19.2% ; the PEG ratio of the company is 0.6

Underperformed the market in the last 1 year

The stock has generated a return of 5.89% in the last 1 year, much lower than market (Japan Nikkei 225) returns of 36.73%

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to KH Neochem Co., Ltd. should be less than 10%
Overall Portfolio exposure to Chemicals & Petrochemicals should be less than 30%

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

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

Is KH Neochem Co., Ltd. for you?

Low Risk, Low Return

Absolute

Risk Adjusted

Volatility

KH Neochem Co., Ltd.

5.89%

0.70

30.74%

Japan Nikkei 225

36.73%

1.30

28.24%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

5.97%

EBIT Growth (5y)

7.72%

EBIT to Interest (avg)

100.00

Debt to EBITDA (avg)

0.98

Net Debt to Equity (avg)

0.27

Sales to Capital Employed (avg)

1.41

Tax Ratio

29.58%

Dividend Payout Ratio

39.86%

Pledged Shares

Institutional Holding

0.04%

ROCE (avg)

16.34%

ROE (avg)

14.82%

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

1.39

EV to EBIT

9.06

EV to EBITDA

6.36

EV to Capital Employed

1.31

EV to Sales

0.92

PEG Ratio

0.57

Dividend Yield

ROCE (Latest)

14.42%

ROE (Latest)

12.66%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bullish

RSI

No Signal

Bollinger Bands

Mildly Bullish

Moving Averages

Mildly Bullish (Daily)

KST

Bullish

Dow Theory

Mildly Bearish

No Trend

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

2What is working for the Company

DIVIDEND PAYOUT RATIO(Y)

Highest at 84.85%

DIVIDEND PER SHARE(HY)

Highest at JPY 3.28

-19What is not working for the Company

INTEREST(HY)

At JPY 96 MM has Grown at 74.55%

NET SALES(Q)

At JPY 28,511 MM has Fallen at -13.54%

PRE-TAX PROFIT(Q)

At JPY 2,535 MM has Fallen at -47.99%

RAW MATERIAL COST(Y)

Grown by 13.16% (YoY

CASH AND EQV(HY)

Lowest at JPY 10,735 MM

INVENTORY TURNOVER RATIO(HY)

Lowest at 4.01 times

DEBTORS TURNOVER RATIO(HY)

Lowest at 3.28 times

NET PROFIT(Q)

Fallen at -36.89%

Here's what is working for KH Neochem Co., Ltd.

Dividend per share

Highest at JPY 3.28

in the last five years

MOJO Watch

Company is distributing higher dividend from profits generated

DPS (JPY)

Dividend Payout Ratio

Highest at 84.85%

in the last five years

MOJO Watch

Company is distributing higher proportion of profits generated as dividend

DPR (%)

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

Interest

At JPY 96 MM has Grown at 74.55%

over previous Semi-Annual period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (JPY MM)

Net Sales

At JPY 28,511 MM has Fallen at -13.54%

Year on Year (YoY)

MOJO Watch

Near term sales trend is very negative

Net Sales (JPY MM)

Pre-Tax Profit

At JPY 2,535 MM has Fallen at -47.99%

Year on Year (YoY)

MOJO Watch

Near term Pre-Tax Profit trend is very negative

Pre-Tax Profit (JPY MM)

Net Profit

Fallen at -36.89%

Year on Year (YoY)

MOJO Watch

Near term Net Profit trend is negative

Net Profit (JPY MM)

Cash and Eqv

Lowest at JPY 10,735 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is deteriorating

Cash and Cash Equivalents

Inventory Turnover Ratio

Lowest at 4.01 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling inventory has slowed

Inventory Turnover Ratio

Debtors Turnover Ratio

Lowest at 3.28 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling Debtors has slowed

Debtors Turnover Ratio

Raw Material Cost

Grown by 13.16% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has deteriorated; this may lead to a fall in profit margin

Raw Material Cost as a percentage of Sales