Nippon Kayaku Co., Ltd. (NPKYF)
OvervaluedFundamental
66
Price
$2130.00
Market Cap
$307.91B
Part 1 · What the company is worth
Overview
Nippon Kayaku was founded in 1916 as Japan's first industrial explosives maker and has since turned its chemistry expertise into three unrelated businesses: specialty chemicals such as epoxy resins and dyes, pharmaceuticals including anti-cancer and cardiovascular drugs, and automotive safety components — airbag inflators and micro gas generators sold to seatbelt and airbag makers worldwide. It no longer sells explosives as a core line; that heritage lives on mainly in its name.
How it makes money
Each business earns money in a different way. Fine chemicals sell to electronics, textile and agrochemical manufacturers as industrial inputs priced on volume and specification. Life sciences revenue comes from drug sales, largely covered by national health insurance systems, with pricing set through negotiation and regulatory approval cycles rather than open competition. Mobility and imaging revenue comes from supplying safety components under long-term contracts with automakers and their tier-one suppliers.
Revenue by segment
Airbag inflators and micro gas generators for automotive safety systems, plus imaging-related chemical products — the largest business domain.
Epoxy resins, UV-curable resins, dyes and electronic materials sold to industrial manufacturers.
Prescription pharmaceuticals, including anti-cancer, cardiovascular and anti-inflammatory drugs.
Competitive moat
Switching costs · NarrowAutomakers qualify safety components like airbag inflators through lengthy testing before they go into a vehicle program, so once Nippon Kayaku is designed into a platform it tends to stay there for the life of that model. The same is not true across its other two businesses, where chemicals and drugs face more open competition, which is why the advantage is narrow rather than covering the whole company.
What drives demand
Moderately cyclicalThe three businesses pull in different directions: pharmaceutical demand is largely defensive, since patients keep needing medication regardless of the economy, while fine chemicals and automotive safety components track industrial and vehicle production, which slow in downturns. The blend leaves the group somewhere between the two extremes rather than firmly cyclical or firmly defensive.
The case for
Buyers argue that spreading revenue across defensive pharmaceuticals, industrial chemicals and automotive safety components gives Nippon Kayaku more balance than a single-industry supplier, and that its long history as a qualified airbag-inflator supplier makes that business hard for a new entrant to displace.
The case against
Sellers fear that running three unrelated businesses under one roof dilutes management focus and makes it harder for investors to value the company against single-industry peers, and that two of the three segments remain exposed to the same automotive and industrial production cycle at the same time.
Written by the editors, published on August 18, 2026
Direct competitors
Who this company fights with for the same customers
Generated on September 19, 2026 with claude-haiku-4-5 — shared with all users
Another Japanese chemical group that, like Nippon Kayaku, turns pyrotechnic know-how into airbag inflators and micro gas generators sold to the same global car makers and safety-system integrators.
The largest maker of automotive passive safety systems, it produces its own inflators and seatbelt pretensioner gas generators and bids for the same carmaker programmes as Nippon Kayaku's Safety Systems segment.
A major supplier of airbag modules and inflators (the former Takata business, now under Ningbo Joyson) competing for the same airbag and seatbelt contracts with car makers in Asia, Europe and North America.
Competes head-on in epoxy materials for semiconductor encapsulation, selling molding compounds and resins to the same chip packaging and assembly customers.
Supplies epoxy encapsulation materials for semiconductor packages and power modules, addressing the same electronic-materials customers as Nippon Kayaku's functional chemicals business.
Balance Sheet & Liquidity
Revenue
$247.90B
Trailing 12 months to the last reported quarter — estimated from per-share metrics
Net Income
$25.30B
Trailing 12 months to the last reported quarter — estimated from per-share metrics
Free Cash Flow
-
Total Equity
$276.68B
Total Liabilities
$68.18B
Current Ratio
2.71
Interest Coverage
-
Debt/EBITDA
1.66
Earnings Per Share
Revenue & Net Income
Free Cash Flow
Income Breakdown
Historical statement
Margins over time
Debt over time
How heavy the debt is
Growth grid
Growth — Revenue
Fair Value Estimation
Fair Value
$1558.08
Current Price
$2130.00
Margin of Safety
-36.7%
Fair Value Range
$1293.68 - $1822.48
Spread across the valuation methods used, not a statistically calibrated confidence interval.
Estimation Methods
Valuation Metrics
P/E Ratio
11.98
ROE
8.9%
P/B Ratio
1.10
P/FCF
-
Gross Margin
30.3%
ROIC
5.8%
Profitability Radar
Value Creation (Economic Moat)
ROIC
5.8%
WACC
7.6%
ROIC − WACC
-1.8 pp
ROIC is below the cost of capital — the company is destroying value for every dollar invested.
Fundamental Analysis Criteria
Passed (14)
- ROIC 5.8%
- Gross Margin 30.3%
- P/B Ratio 1.10
- Debt/Equity ratio
- Operating Margin 9.5%
- Current Ratio
- Debt/EBITDA
- Price below Graham Number
- ROE 9.6%
- Revenue Growth 5Y 6.9%
- Analyst Consensus 80% Buy
- Earnings Surprise avg 37.3%
- PEG Ratio 0.68
- Net Margin Trend 17.0% vs 5.1%
Failed (3)
- Price CAGR 3.66%
- DCF valuation (Unknown)
- Piotroski F-Score 0/9
Unavailable (10)
- EPS data insufficient
- P/FCF NaN
- Dividend Payout NaN%
- Positive Free Cash Flow
- CapEx intensity
- Interest Coverage
- Return on Tangible Assets
- Low reliance on intangibles
- Earnings Quality (OCF/Net Income)
- Share Dilution (missing shares data)
Piotroski F-Score
Serious financial concerns
Earnings Quality
Low quality: investigate accounting
Share Dilution
Buying back shares. Shareholder friendly
Institutional Holdings
No institutional filings reported for this company.
Governance
Executive Team
| Name | Title | Age |
|---|---|---|
| Mr. Shigeyuki Kawamura | President, CEO & Representative Director | 62 |
| Mr. Tsutomu Kawamura | General Manager of Finance & Accounting Division | - |
| Yasuhito Kato | MD of Technology & Director | 60 |
| Ichio Kohinata | General Manager of Legal Affairs Division | - |
| Shinji Inoue | Senior Executive Officer of planning, Corp. Communication & Accounting and Director | 59 |
| Makoto Takeda | MD of Human Resource & Director | 61 |
| Hiroshi Shimada | Senior MD, Head of Pharmaceuticals Group & Director | 60 |
| Hideyuki Yuya | MD & Head of Polatechno Group | - |
| Shigehide Kagaya | Head of Catalysts Group, Fine Chemicals Business Unit | - |
| Yoshiki Akatani | Managing Director of Fine Chemicals Business Area | - |
Audit Risk
1
Board Risk
9
Compensation Risk
1
Shareholder Rights Risk
1
Part 2 · The price and when to enter
This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.
Latest News
Recent headlines for NPKYF, sourced from Markets Gazette.