| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 1610.17 | -63 |
| Intrinsic value (DCF) | 1143.89 | -73 |
| Graham-Dodd Method | 2022.94 | -53 |
| Graham Formula | 1469.65 | -66 |
Shikoku Chemicals Corporation (4099.T) is a Japan-based specialty chemicals and housing materials company with a diversified business portfolio. Founded in 1947 and headquartered in Marugame, Japan, the company operates in three core segments: inorganic and organic chemicals, fine chemicals, and housing materials. Its chemical products include insoluble sulfur, carbon disulfide, epoxy resin curing agents, and water treatment solutions, catering to industrial and environmental applications. Additionally, Shikoku Chemicals provides housing-related products such as interior/exterior finishes, shutters, and solar photovoltaic generation services. The company also engages in ancillary businesses, including waste management, insurance agency services, and fast-food operations under the Mosburger brand. With a strong domestic presence and international operations, Shikoku Chemicals leverages its R&D capabilities to serve diverse industries, from construction to electronics. Its integrated business model and focus on environmental solutions position it as a key player in Japan's specialty chemicals sector.
Shikoku Chemicals presents a stable investment opportunity with moderate growth potential, supported by its diversified business model and strong cash position (JPY 29.9 billion). The company reported solid FY2023 results, with revenue of JPY 63.1 billion and net income of JPY 7.85 billion, reflecting a healthy profit margin. Its low beta (0.38) suggests lower volatility compared to the broader market, making it a defensive play in the chemicals sector. However, investors should note its exposure to cyclical industries (construction, electronics) and Japan's aging demographic, which may impact long-term housing demand. The dividend yield (~1.8%) is modest but sustainable given the company's strong cash flow generation (JPY 12.95 billion operating cash flow).
Shikoku Chemicals holds a niche position in Japan's specialty chemicals market, differentiating itself through a diversified product portfolio spanning industrial chemicals, housing materials, and environmental solutions. Its competitive advantage lies in vertical integration—combining chemical R&D with downstream applications in construction and water treatment. The company's expertise in epoxy resin curing agents and chlorinated isocyanurates provides stable demand from electronics and water purification industries. However, its housing materials segment faces intense competition from larger construction suppliers. While Shikoku's smaller scale limits economies of scale compared to global chemical giants, its focus on high-margin specialty products and domestic market expertise mitigates pricing pressures. The company's ancillary businesses (Mosburger, waste management) add revenue diversification but may dilute strategic focus. Its strong balance sheet (low debt-to-equity) and cash reserves provide flexibility for R&D or acquisitions in high-growth segments like environmental technologies.