Specialty and Performance Chemicals

Denka Co., Ltd.

Denka Considers Splitting Styrene-Related Business

4061

Denka (TSE:4061) reported a net profit of ¥15,695 million for the year ending March 31, 2026, despite lower sales of ¥384,247 million. The stock's P/E ratio stands at 20.9x, higher than industry averages, indicating a premium valuation. While the share price has increased 102.21% over the past year, concerns about future earnings growth and market sentiment persist. A discounted cash flow analysis suggests the stock may be undervalued at its current price of ¥3,804.

Simplywall

A Look At Denka (TSE:4061) Valuation After Its Swing Back To Profit Despite Lower Sales

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The Nikkei 225 Index fell over 2.2% to ¥53,855 amid rising energy prices, particularly Brent crude oil reaching $100. The surge in oil prices follows geopolitical tensions, including attacks on ships and production cuts in Iraq. Analysts predict continued price increases, raising concerns of stagflation in Japan, which heavily relies on oil imports. Most companies in the index declined, with Denka dropping 5.87%. Technical indicators suggest further declines, targeting ¥51,388 as the next key level.

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Denka (TSE:4061) reported nine-month earnings with sales of ¥290,774 million and net income of ¥5,535 million. Despite a recent share price increase of 30.86% over 90 days, concerns remain due to a net income loss of ¥9,342 million and a 5-year total return decline of 9.16%. The company trades at a Price-to-Sales (P/S) ratio of 0.7x, aligning with the industry average, but a DCF analysis suggests shares may be overvalued at ¥3,098. Investors are advised to consider both the potential rewards and risks before making decisions.

Assessing Denka (TSE:4061) Valuation After Earnings Show Stronger Profitability Despite Softer Sales

Denka Co., Ltd.(4061.JP)

A Look At Denka (TSE:4061) Valuation After Its Swing Back To Profit Despite Lower Sales

Nikkei 225 Index dips as Brent crude oil price jumps to $100

Assessing Denka (TSE:4061) Valuation After Earnings Show Stronger Profitability Despite Softer Sales