Valuation Update With 7 Day Price Move • May 19
Investor sentiment improves as stock rises 16% After last week's 16% share price gain to JP¥2,061, the stock trades at a forward P/E ratio of 16x. Average forward P/E is 14x in the Chemicals industry in Japan. Total returns to shareholders of 89% over the past three years. Announcement • May 14
Nippon Kayaku Co., Ltd. (TSE:4272) announces an Equity Buyback for 13,000,000 shares, representing 8.75% for ¥15,000 million. Nippon Kayaku Co., Ltd. (TSE:4272) announces a share repurchase program. Under the program, the company will repurchase up to 13,000,000 shares, representing 8.75% of its issued share capital (excluding treasury stock), for a total purchase price of ¥15,000 million. The purpose of the program is to return profits to shareholders, improve capital efficiency and increase corporate value in accordance with Measures for Delivering Management with an Awareness of the Cost of Capital and Stock Prices. The program will continue through March 31, 2027. As of March 31, 2026, the company had 148,502,884 issued shares (excluding treasury stock) and 11,497,116 treasury shares. New Risk • May 13
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of Japanese stocks, typically moving 7.5% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 6.8% per year for the foreseeable future. Minor Risks Dividend is not well covered by cash flows (dividend per share is over 5x cash flows per share). Share price has been volatile over the past 3 months (7.5% average weekly change). Large one-off items impacting financial results. Reported Earnings • May 13
Full year 2026 earnings: EPS exceeds analyst expectations Full year 2026 results: EPS: JP¥161 (up from JP¥107 in FY 2025). Revenue: JP¥241.9b (up 8.7% from FY 2025). Net income: JP¥24.6b (up 41% from FY 2025). Profit margin: 10% (up from 7.9% in FY 2025). Revenue was in line with analyst estimates. Earnings per share (EPS) surpassed analyst estimates by 11%. Revenue is forecast to grow 3.0% p.a. on average during the next 2 years, compared to a 4.7% growth forecast for the Chemicals industry in Japan. Over the last 3 years on average, earnings per share has increased by 44% per year but the company’s share price has only increased by 21% per year, which means it is significantly lagging earnings growth. Announcement • May 12
Nippon Kayaku Co., Ltd., Annual General Meeting, Jun 25, 2026 Nippon Kayaku Co., Ltd., Annual General Meeting, Jun 25, 2026. Announcement • Mar 26
Denka Company Limited (TSE:4061) completed the acquisition of 77.65% stake in KAINOS Laboratories, Inc. (TSE:4556) from a group of shareholders. Denka Company Limited (TSE:4061) proposed to acquire 77.65% stake in KAINOS Laboratories, Inc. (TSE:4556) from a group of shareholders for ¥7.9 billion on February 6, 2026. A cash consideration of ¥7.89 billion valued at ¥2285 per share will be paid by Denka Company Limited. As part of consideration, ¥7.89 billion is paid towards common equity of KAINOS Laboratories, Inc. Denka Company Limited intends to launch a Squeeze-Out Procedures, if it acquires the minimum tender shares (1,990,000 shares) and fails to acquire all of the KAINOS Laboratories, Inc's Shares (excluding the Shares Agreed Not to Be Tendered and treasury shares).
The transaction is subject to minimum tender. The expected completion of the transaction is March 25, 2026.
Sumitomo Mitsui Banking Corporation acted as financial advisor for Denka Company Limited. AGS Consulting Co., Ltd. acted as financial advisor for KAINOS Laboratories, Inc. Nagashima Ohno & Tsunematsu acted as legal advisor for KAINOS Laboratories, Inc. TMI Associates acted as legal advisor for KAINOS Laboratories, Inc. Mizuho Securities Co., Ltd. acted as financial advisor for KAINOS Laboratories, Inc.
Denka Company Limited (TSE:4061) completed the acquisition of 77.65% stake in KAINOS Laboratories, Inc. (TSE:4556) from a group of shareholders on March 25, 2026. Upon closing of the offer period, 3,223,919 shares were tendered. Since it is more than the minimum number of shares to be purchased (1,990,000 shares), Denka Company Limited will purchase all of the Tendered Share Certificates and intends to implement a series of procedures for the purpose of making the Tender Offeror the sole shareholder of KAINOS Laboratories, Inc. As of today, the KAINOS Laboratories, Inc's Shares are listed on the Standard Market of the Tokyo Stock Exchange. If the procedures are implemented, the KAINOS Laboratories, Inc's Shares will be delisted pursuant to the prescribed procedures, in accordance with the criteria for delisting of Tokyo Stock Exchange. KAINOS Laboratories, Inc's Shares, after being delisted, will no longer be traded on the Standard Market of the Tokyo Stock Exchange. Upcoming Dividend • Mar 23
Upcoming dividend of JP¥30.00 per share Eligible shareholders must have bought the stock before 30 March 2026. Payment date: 29 June 2026. Payout ratio is a comfortable 49% but the company is paying out more than the cash it is generating. Trailing yield: 3.4%. Lower than top quartile of Japanese dividend payers (3.6%). Higher than average of industry peers (2.3%). Announcement • Feb 09
Denka Company Limited (TSE:4061) proposed to acquire 77.65% stake in KAINOS Laboratories, Inc. (TSE:4556) from a group of shareholders for ¥7.9 billion. Denka Company Limited (TSE:4061) proposed to acquire 77.65% stake in KAINOS Laboratories, Inc. (TSE:4556) from a group of shareholders for ¥7.9 billion on February 6, 2026. A cash consideration of ¥7.89 billion valued at ¥2285 per share will be paid by Denka Company Limited. As part of consideration, ¥7.89 billion is paid towards common equity of KAINOS Laboratories, Inc.
The transaction is subject to minimum tender. The expected completion of the transaction is March 25, 2026.
Sumitomo Mitsui Banking Corporation acted as financial advisor for Denka Company Limited. AGS Consulting Co., Ltd. acted as financial advisor for KAINOS Laboratories, Inc. Nagashima Ohno & Tsunematsu acted as legal advisor for KAINOS Laboratories, Inc. TMI Associates acted as legal advisor for KAINOS Laboratories, Inc. Mizuho Securities Co., Ltd. acted as financial advisor for KAINOS Laboratories, Inc. Reported Earnings • Feb 03
Third quarter 2026 earnings released: EPS: JP¥37.31 (vs JP¥45.03 in 3Q 2025) Third quarter 2026 results: EPS: JP¥37.31 (down from JP¥45.03 in 3Q 2025). Revenue: JP¥61.0b (up 3.7% from 3Q 2025). Net income: JP¥5.63b (down 23% from 3Q 2025). Profit margin: 9.2% (down from 13% in 3Q 2025). Revenue is forecast to grow 4.2% p.a. on average during the next 3 years, compared to a 4.4% growth forecast for the Chemicals industry in Japan. Over the last 3 years on average, earnings per share has increased by 26% per year but the company’s share price has only increased by 16% per year, which means it is significantly lagging earnings growth. Declared Dividend • Dec 02
First half dividend of JP¥30.00 announced Shareholders will receive a dividend of JP¥30.00. Ex-date: 30th March 2026 Payment date: 29th June 2026 Dividend yield will be 3.7%, which is higher than the industry average of 2.2%. Sustainability & Growth Dividend is covered by earnings (46% earnings payout ratio) but not covered by cash flows (dividend approximately 6x free cash flows). The dividend has increased by an average of 9.1% per year over the past 10 years. However, payments have been volatile during that time. EPS is expected to remain steady over the next 3 years, which should provide adequate earnings cover for the dividend. Reported Earnings • Nov 13
Second quarter 2026 earnings released: EPS: JP¥47.99 (vs JP¥14.66 in 2Q 2025) Second quarter 2026 results: EPS: JP¥47.99 (up from JP¥14.66 in 2Q 2025). Revenue: JP¥58.8b (up 6.0% from 2Q 2025). Net income: JP¥7.40b (up 207% from 2Q 2025). Profit margin: 13% (up from 4.3% in 2Q 2025). Revenue is forecast to grow 3.8% p.a. on average during the next 3 years, compared to a 4.2% growth forecast for the Chemicals industry in Japan. Over the last 3 years on average, earnings per share has increased by 8% per year and the company’s share price has also increased by 8% per year. Announcement • Nov 12
Nippon Kayaku Co., Ltd. to Report Fiscal Year 2026 Results on May 12, 2026 Nippon Kayaku Co., Ltd. announced that they will report fiscal year 2026 results on May 12, 2026 Reported Earnings • Aug 02
First quarter 2026 earnings released: EPS: JP¥27.29 (vs JP¥21.52 in 1Q 2025) First quarter 2026 results: EPS: JP¥27.29 (up from JP¥21.52 in 1Q 2025). Revenue: JP¥54.8b (up 2.1% from 1Q 2025). Net income: JP¥4.29b (up 20% from 1Q 2025). Profit margin: 7.8% (up from 6.6% in 1Q 2025). Revenue is forecast to grow 4.2% p.a. on average during the next 3 years, compared to a 4.0% growth forecast for the Chemicals industry in Japan. Over the last 3 years on average, earnings per share has fallen by 12% per year but the company’s share price has increased by 3% per year, which means it is well ahead of earnings. Declared Dividend • Jul 09
Final dividend increased to JP¥30.00 Dividend of JP¥30.00 is 33% higher than last year. Ex-date: 29th September 2025 Payment date: 2nd December 2025 Dividend yield will be 5.1%, which is higher than the industry average of 2.2%. Sustainability & Growth Dividend is covered by earnings (51% earnings payout ratio) but the company has no free cash flows available, indicating it may be using cash reserves or debt to pay the dividend. The dividend has increased by an average of 9.1% per year over the past 10 years. However, payments have been volatile during that time. EPS is expected to grow by 47% over the next 3 years, which should provide support to the dividend and adequate earnings cover. Reported Earnings • Jul 01
Full year 2025 earnings: EPS misses analyst expectations Full year 2025 results: EPS: JP¥107 (up from JP¥24.80 in FY 2024). Revenue: JP¥222.6b (up 10% from FY 2024). Net income: JP¥17.5b (up 326% from FY 2024). Profit margin: 7.9% (up from 2.0% in FY 2024). The increase in margin was driven by higher revenue. Revenue was in line with analyst estimates. Earnings per share (EPS) missed analyst estimates by 4.0%. Revenue is forecast to grow 4.1% p.a. on average during the next 3 years, compared to a 3.9% growth forecast for the Chemicals industry in Japan. Over the last 3 years on average, earnings per share has fallen by 25% per year but the company’s share price has increased by 6% per year, which means it is well ahead of earnings. Reported Earnings • May 15
Full year 2025 earnings: EPS misses analyst expectations Full year 2025 results: EPS: JP¥107 (up from JP¥24.80 in FY 2024). Revenue: JP¥222.6b (up 10% from FY 2024). Net income: JP¥17.5b (up 326% from FY 2024). Profit margin: 7.9% (up from 2.0% in FY 2024). The increase in margin was driven by higher revenue. Revenue was in line with analyst estimates. Earnings per share (EPS) missed analyst estimates by 4.0%. Revenue is forecast to grow 3.6% p.a. on average during the next 2 years, compared to a 4.6% growth forecast for the Chemicals industry in Japan. Over the last 3 years on average, earnings per share has fallen by 25% per year but the company’s share price has increased by 6% per year, which means it is well ahead of earnings. Announcement • May 13
Nippon Kayaku Co., Ltd., Annual General Meeting, Jun 26, 2025 Nippon Kayaku Co., Ltd., Annual General Meeting, Jun 26, 2025. Upcoming Dividend • Mar 21
Upcoming dividend of JP¥37.50 per share Eligible shareholders must have bought the stock before 28 March 2025. Payment date: 27 June 2025. Payout ratio is a comfortable 51% but the company is paying out more than the cash it is generating. Trailing yield: 5.3%. Within top quartile of Japanese dividend payers (3.7%). Higher than average of industry peers (2.6%). New Risk • Feb 04
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of Japanese stocks, typically moving 6.0% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. Currently, the following risks have been identified for the company: Minor Risks Dividend is not well covered by cash flows (194% cash payout ratio). Share price has been volatile over the past 3 months (6.0% average weekly change). Reported Earnings • Feb 04
Third quarter 2025 earnings released: EPS: JP¥45.03 (vs JP¥19.67 loss in 3Q 2024) Third quarter 2025 results: EPS: JP¥45.03 (up from JP¥19.67 loss in 3Q 2024). Revenue: JP¥58.8b (up 14% from 3Q 2024). Net income: JP¥7.34b (up JP¥10.6b from 3Q 2024). Profit margin: 13% (up from net loss in 3Q 2024). The move to profitability was primarily driven by higher revenue. Revenue is forecast to grow 3.3% p.a. on average during the next 3 years, compared to a 5.0% growth forecast for the Chemicals industry in Japan. Over the last 3 years on average, earnings per share has fallen by 39% per year but the company’s share price has increased by 7% per year, which means it is well ahead of earnings. Declared Dividend • Dec 03
First half dividend of JP¥22.50 announced Dividend of JP¥22.50 is the same as last year. Ex-date: 28th March 2025 Payment date: 27th June 2025 Dividend yield will be 3.5%, which is higher than the industry average of 2.2%. Sustainability & Growth Dividend is not covered by earnings (186% earnings payout ratio) nor is it covered by cash flows (196% cash payout ratio). The dividend has increased by an average of 8.4% per year over the past 10 years. However, payments have been volatile during that time. The company's earnings per share (EPS) would need to grow by 107% to bring the payout ratio under control. EPS is expected to grow by 157% over the next 3 years, which is sufficient to bring the dividend into a sustainable range. Announcement • Nov 19
Nippon Kayaku Co., Ltd. to Report Fiscal Year 2025 Results on May 13, 2025 Nippon Kayaku Co., Ltd. announced that they will report fiscal year 2025 results on May 13, 2025 Reported Earnings • Nov 13
Second quarter 2025 earnings released: EPS: JP¥14.66 (vs JP¥20.69 in 2Q 2024) Second quarter 2025 results: EPS: JP¥14.66 (down from JP¥20.69 in 2Q 2024). Revenue: JP¥55.5b (up 12% from 2Q 2024). Net income: JP¥2.41b (down 30% from 2Q 2024). Profit margin: 4.3% (down from 7.0% in 2Q 2024). Revenue is forecast to grow 4.2% p.a. on average during the next 3 years, compared to a 5.2% growth forecast for the Chemicals industry in Japan. Over the last 3 years on average, earnings per share has fallen by 47% per year but the company’s share price has increased by 2% per year, which means it is well ahead of earnings. Announcement • Nov 11
Nippon Kayaku Co., Ltd. (TSE:4272) announces an Equity Buyback for 6,500,000 shares, representing 3.97% for ¥7,000 million. Nippon Kayaku Co., Ltd. (TSE:4272) announces a share repurchase program. Under the program, the company will repurchase up to 6,500,000 shares, representing 3.97% of its issued share capital (excluding treasury stock), for a total purchase price of ¥7,000 million. The purpose of the program is to implement flexible capital policies in response to changes in the business environment. The program will continue through May 30, 2025. As of September 30, 2024, the company had 163,585,231 issued shares (excluding treasury stock) and 6,918,339 treasury shares. Upcoming Dividend • Sep 20
Upcoming dividend of JP¥22.50 per share Eligible shareholders must have bought the stock before 27 September 2024. Payment date: 02 December 2024. The company is paying out more than 100% of its earnings and cash flow. Trailing yield: 3.5%. Lower than top quartile of Japanese dividend payers (3.8%). Higher than average of industry peers (2.4%). Reported Earnings • Aug 02
First quarter 2025 earnings released: EPS: JP¥21.52 (vs JP¥16.05 in 1Q 2024) First quarter 2025 results: EPS: JP¥21.52 (up from JP¥16.05 in 1Q 2024). Revenue: JP¥53.6b (up 10% from 1Q 2024). Net income: JP¥3.57b (up 34% from 1Q 2024). Profit margin: 6.6% (up from 5.5% in 1Q 2024). Revenue is forecast to grow 3.9% p.a. on average during the next 3 years, compared to a 5.7% growth forecast for the Chemicals industry in Japan. Over the last 3 years on average, earnings per share has fallen by 38% per year but the company’s share price has increased by 2% per year, which means it is well ahead of earnings. Buy Or Sell Opportunity • Aug 01
Now 23% overvalued after recent price rise Over the last 90 days, the stock has risen 8.2% to JP¥1,411. The fair value is estimated to be JP¥1,143, however this is not to be taken as a sell recommendation but rather should be used as a guide only. Revenue has grown by 4.1% over the last 3 years. Earnings per share has declined by 26%. For the next 3 years, revenue is forecast to grow by 4.3% per annum. Earnings are also forecast to grow by 35% per annum over the same time period. Declared Dividend • Jul 11
Final dividend of JP¥22.50 announced Dividend of JP¥22.50 is the same as last year. Ex-date: 27th September 2024 Payment date: 2nd December 2024 Dividend yield will be 3.5%, which is higher than the industry average of 2.2%. Sustainability & Growth Dividend is not covered by earnings (306% earnings payout ratio) nor is it adequately covered by cash flows (96% cash payout ratio). The dividend has increased by an average of 8.4% per year over the past 10 years. However, payments have been volatile during that time. The company's earnings per share (EPS) would need to grow by 240% to bring the payout ratio under control. EPS is expected to grow by 146% over the next 3 years, which means the dividend may need to be reduced to reach a sustainable payout ratio. Announcement • May 16
Nippon Kayaku Co., Ltd. Announces Year End Dividend for the Fiscal Year Ended March 31, 2024, Payable on June 27, 2024 Nippon Kayaku Co., Ltd. announced year end dividend of JPY 22.50 per share for the Fiscal Year Ended March 31, 2024 compared to JPY 25.00 per share paid a year ago. Scheduled date for start of dividend payments: June 27, 2024. Reported Earnings • May 16
Full year 2024 earnings released: EPS: JP¥24.80 (vs JP¥89.36 in FY 2023) Full year 2024 results: EPS: JP¥24.80 (down from JP¥89.36 in FY 2023). Revenue: JP¥201.8b (up 1.7% from FY 2023). Net income: JP¥4.11b (down 73% from FY 2023). Profit margin: 2.0% (down from 7.6% in FY 2023). Over the last 3 years on average, earnings per share has fallen by 26% per year but the company’s share price has increased by 8% per year, which means it is well ahead of earnings. Announcement • May 15
Nippon Kayaku Co., Ltd., Annual General Meeting, Jun 26, 2024 Nippon Kayaku Co., Ltd., Annual General Meeting, Jun 26, 2024. Announcement • May 14
Nippon Kayaku Co., Ltd. (TSE:4272) announces an Equity Buyback for 2,800,000 shares, representing 1.69% for ¥3,000 million. Nippon Kayaku Co., Ltd. (TSE:4272) announces a share repurchase program. Under the program, the company will repurchase up to 2,800,000 shares, representing 1.69% of its issued share capital (excluding treasury stock), for a total purchase price of ¥3,000 million. The purpose of the program is to implement flexible capital policies in response to changes in the business environment. The program will continue through September 30, 2024. As of March 31, 2024, the company had 165,870,785 issued shares (excluding treasury stock) and 4,632,785 treasury shares. Announcement • Mar 28
Nippon Kayaku Co., Ltd. to Report Fiscal Year 2024 Results on May 13, 2024 Nippon Kayaku Co., Ltd. announced that they will report fiscal year 2024 results on May 13, 2024 Upcoming Dividend • Mar 21
Upcoming dividend of JP¥22.50 per share Eligible shareholders must have bought the stock before 28 March 2024. Payment date: 01 July 2024. The company is paying out more than 100% of its earnings and cash flow. Trailing yield: 3.6%. Within top quartile of Japanese dividend payers (3.2%). Higher than average of industry peers (2.1%). New Risk • Feb 10
New major risk - Revenue and earnings growth Earnings have declined by 1.7% per year over the past 5 years. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are declining over an extended period, then in most cases the share price will decline over time unless the company can turn around its fortunes. A trend of falling earnings can be very difficult to turn around. If the company is well already established it may also be a sign the company has matured and is in decline. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risks Dividend is not well covered by earnings and cash flows. Payout ratio: 161% Cash payout ratio: 146% Earnings have declined by 1.7% per year over the past 5 years. Minor Risks Large one-off items impacting financial results. Profit margins are more than 30% lower than last year (1.3% net profit margin). New Risk • Feb 02
New major risk - Revenue and earnings growth Earnings have declined by 1.7% per year over the past 5 years. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are declining over an extended period, then in most cases the share price will decline over time unless the company can turn around its fortunes. A trend of falling earnings can be very difficult to turn around. If the company is well already established it may also be a sign the company has matured and is in decline. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risks Dividend is not well covered by earnings and cash flows. Payout ratio: 161% Cash payout ratio: 146% Earnings have declined by 1.7% per year over the past 5 years. Minor Risks Large one-off items impacting financial results. Profit margins are more than 30% lower than last year (1.3% net profit margin). Reported Earnings • Feb 02
Third quarter 2024 earnings released: JP¥19.67 loss per share (vs JP¥23.57 profit in 3Q 2023) Third quarter 2024 results: JP¥19.67 loss per share (down from JP¥23.57 profit in 3Q 2023). Revenue: JP¥51.8b (up 1.9% from 3Q 2023). Net loss: JP¥3.26b (down 182% from profit in 3Q 2023). Over the last 3 years on average, earnings per share has fallen by 12% per year but the company’s share price has increased by 8% per year, which means it is well ahead of earnings. Announcement • Nov 10
Nippon Kayaku Co., Ltd. Announces Dividend for the Second Quarter of the Year Ending March 31, 2024, Payable on December 1, 2023 Nippon Kayaku Co., Ltd. announced dividend for the second quarter of the year ending March 31, 2024. For the second quarter, the company expects to pay JPY 22.50 against JPY 20.00 reported a year ago. Scheduled date for start of dividend payments is December 1, 2023. Reported Earnings • Nov 08
Second quarter 2024 earnings released: EPS: JP¥20.69 (vs JP¥31.63 in 2Q 2023) Second quarter 2024 results: EPS: JP¥20.69 (down from JP¥31.63 in 2Q 2023). Revenue: JP¥49.3b (down 9.4% from 2Q 2023). Net income: JP¥3.43b (down 36% from 2Q 2023). Profit margin: 7.0% (down from 9.8% in 2Q 2023). The decrease in margin was driven by lower revenue. Over the last 3 years on average, earnings per share has increased by 3% per year but the company’s share price has increased by 11% per year, which means it is tracking significantly ahead of earnings growth. Announcement • Nov 01
Nippon Kayaku Co., Ltd. Revises Consolidated Earnings Guidance for the Fiscal Year Ending March 31, 2024 Nippon Kayaku Co., Ltd. revised consolidated earnings guidance for the fiscal year ending March 31, 2024. For the year, the company expects revised net sales of JPY 202,300 million, operating income of JPY 6,000 million, profit attributable to owners of parent of JPY 5,800 million and profit attributable to owners of parent per share of JPY 34.98 compared to previously expected net sales of JPY 202,300 million, operating income of JPY 13,000 million, profit attributable to owners of parent of JPY 10,500 million and profit attributable to owners of parent per share of JPY 63.34. Announcement • Oct 31
Nippon Kayaku Co., Ltd. Revises Consolidated Earnings Guidance for the Six Months Ended September 30, 2023 Nippon Kayaku Co., Ltd. revised consolidated earnings guidance for the six months ended September 30, 2023. For the period, the company expects revised net sales of JPY 97,900 million, operating income of JPY 4,800 million, profit attributable to owners of parent of JPY 6,100 million and profit attributable to owners of parent per share of JPY 36.79 compared to previously expected net sales of JPY 97,100 million, operating income of JPY 5,300 million, profit attributable to owners of parent of JPY 4,400 million and profit attributable to owners of parent per share of JPY 26.54. Upcoming Dividend • Sep 21
Upcoming dividend of JP¥22.50 per share at 3.4% yield Eligible shareholders must have bought the stock before 28 September 2023. Payment date: 01 December 2023. Payout ratio is a comfortable 64% but the company is paying out more than the cash it is generating. Trailing yield: 3.4%. Within top quartile of Japanese dividend payers (3.3%). Higher than average of industry peers (2.5%). Announcement • Aug 04
Nippon Kayaku Co., Ltd. Provides Consolidated Earnings Guidance for the First Half and Full Year of Fiscal Ending March 31, 2024 Nippon Kayaku Co., Ltd. provided consolidated earnings guidance for the first half and full year of fiscal ending March 31, 2024. For the first half, The company expects net sales to be JPY 97,100 million, Operating profit to be JPY 5,300 million, profit attributable to owners of parent to be JPY 4,400 million or JPY 26.54 per share.For the full year, The company expects net sales to be JPY 202,300 million, Operating profit to be JPY 13,000 million, profit attributable to owners of parent to be JPY 10,500 million or JPY 63.34 per share. New Risk • Aug 02
New minor risk - Profit margin trend The company's profit margins are lower than last year and have reduced by more than 30%. Net profit margin: 5.9% Last year net profit margin: 9.6% This is considered a minor risk. A large drop in profit margin could indicate the company does not have strong competitive advantages or it is yet to establish itself and its core business. Even if it is a well established business, this may make it a much riskier investment than one that has a combination of proven competitive advantages and a stable or growing profit margin. Currently, the following risks have been identified for the company: Minor Risks Dividend is not well covered by cash flows (100% cash payout ratio). Profit margins are more than 30% lower than last year (5.9% net profit margin). Reported Earnings • Aug 01
First quarter 2024 earnings released: EPS: JP¥16.05 (vs JP¥35.41 in 1Q 2023) First quarter 2024 results: EPS: JP¥16.05 (down from JP¥35.41 in 1Q 2023). Revenue: JP¥48.6b (flat on 1Q 2023). Net income: JP¥2.66b (down 55% from 1Q 2023). Profit margin: 5.5% (down from 12% in 1Q 2023). Over the last 3 years on average, earnings per share has increased by 12% per year whereas the company’s share price has increased by 7% per year. Reported Earnings • May 20
Full year 2023 earnings released: EPS: JP¥89.36 (vs JP¥102 in FY 2022) Full year 2023 results: EPS: JP¥89.36 (down from JP¥102 in FY 2022). Revenue: JP¥198.4b (up 7.3% from FY 2022). Net income: JP¥15.0b (down 13% from FY 2022). Profit margin: 7.6% (down from 9.3% in FY 2022). The decrease in margin was driven by higher expenses. Over the last 3 years on average, earnings per share has increased by 17% per year but the company’s share price has only increased by 7% per year, which means it is significantly lagging earnings growth. Upcoming Dividend • Mar 23
Upcoming dividend of JP¥20.00 per share at 3.4% yield Eligible shareholders must have bought the stock before 30 March 2023. Payment date: 29 June 2023. Payout ratio is a comfortable 41% and this is well supported by cash flows. Trailing yield: 3.4%. Lower than top quartile of Japanese dividend payers (3.6%). Higher than average of industry peers (2.8%). Reported Earnings • Feb 01
Third quarter 2023 earnings released: EPS: JP¥23.57 (vs JP¥28.85 in 3Q 2022) Third quarter 2023 results: EPS: JP¥23.57 (down from JP¥28.85 in 3Q 2022). Revenue: JP¥50.9b (up 3.3% from 3Q 2022). Net income: JP¥3.96b (down 18% from 3Q 2022). Profit margin: 7.8% (down from 9.9% in 3Q 2022). The decrease in margin was driven by higher expenses. Over the last 3 years on average, earnings per share has increased by 17% per year but the company’s share price has fallen by 4% per year, which means it is significantly lagging earnings. Board Change • Nov 16
Less than half of directors are independent Following the recent departure of a director, there are only 3 independent directors on the board. The company's board is composed of: 3 independent directors. 6 non-independent directors. Independent Outside Director Seiichi Fusamura was the last independent director to join the board, commencing their role in 2020. The company's minority of independent directors is a risk according to the Simply Wall St Risk Model. Announcement • Nov 12
Nippon Kayaku Co., Ltd., Annual General Meeting, Jun 28, 2023 Nippon Kayaku Co., Ltd., Annual General Meeting, Jun 28, 2023.