# Sumitomo Chemical Company (4005.JP)

Canonical: https://gigainvestors.com/s/4005.JP

Analysis as of: 2026-10-15T07:10:07.590Z. Financial observations: FY2013–FY2026.

Listing currency: JPY. Reporting currency: JPY.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: JPY 584.20 per share; close as of 2026-10-15.

## Checklist

### understandable: fail

- 3 revenue declines in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 3

- Years with a net loss: 1

- Operating margin variation: 2.17×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.07×

- FY2018: 0.11×

- FY2019: 0.08×

- FY2020: 0.06×

- FY2021: 0.06×

- FY2022: 0.08×

- FY2023: -0.01×

- FY2024: -0.20×

- FY2025: 0.07×

- FY2026: 0.07×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 8.0%

- ROIC, second-lowest year: -1.0%

- Typical minus recent gross margin: 3.8 pp

- Typical gross margin (annual median): 31.7%

- Recent gross margin (lower of latest and 3-year median): 27.8%

- Years with nonpositive capital: 0

- Capital spending / revenue: 5.3%

- ROIC including acquisitions, ten-year median: 3.7%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 7.8%

- FY2018: 13.1%

- FY2019: 9.8%

- FY2020: 4.8%

- FY2021: 5.0%

- FY2022: 8.1%

- FY2023: -1.0%

- FY2024: -18.9%

- FY2025: 8.3%

- FY2026: 9.0%

### economics: fail

- Cash conversion uses consolidated free cash flow after all capital expenditure and consolidated net income (informational).

- owner earnings cash conversion below threshold

- Cash conversion uses consolidated totals: Yes

- Owner earnings, five-year total: JPY -47B

- Net income, five-year total: JPY -168B

- Return on incremental invested capital: 21.4%

- Working capital / revenue, annual change: 0.5 pp

- Working capital / revenue, change between three-year averages: 4.5 pp

- Working capital / revenue, final three-year average: 30.6%

### management: fail

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 9.8% vs 8.3%

- Per-share earnings: 46.81 to 23.59 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -0.1%

- Ordinary dilution, 5-year annual growth: 0.1%

- Market cap gain: JPY -198B

- Cumulative retained earnings: JPY 51B

- Diluted shares, 10-year annual growth: -0.1%

- Diluted shares, 5-year annual growth: 0.1%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: -8.2%

- Per-share value change: JPY -23.22

- Per-share value, starting three-year median: JPY 46.81

- Per-share value, ending three-year median: JPY 23.59

- Average buyback yield: 0.0%

- Buyback history: 1 years

- Debt-funded buybacks: No

- Acquisition spending: JPY 542B

- Cumulative net income, 10 years: JPY 362B

- ROIC, first three-year median: 9.8%

- ROIC, last three-year median: 8.3%

Chart: Earnings per share; fiscal year observations.

- FY2017: JPY 46.81

- FY2018: JPY 81.81

- FY2019: JPY 72.17

- FY2020: JPY 18.91

- FY2021: JPY 28.16

- FY2022: JPY 99.16

- FY2023: JPY 4.27

- FY2024: JPY -190.69

- FY2025: JPY 23.59

- FY2026: JPY 37.16

### accounting: pass

- Sloan accruals: -5.1%

- Receivables to sales index (DSRI): 1.15×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 3.85×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.50×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -3.8%

- FY2018: -5.2%

- FY2019: -2.8%

- FY2020: -2.1%

- FY2021: -8.2%

- FY2022: -0.2%

- FY2023: -2.5%

- FY2024: -6.6%

- FY2025: -5.7%

- FY2026: -5.1%

## Holders

## Price story

Up 53% since Oct 2023 · sales -10.7%

Story as of 2026-10-16T10:00:14.075Z; price observation 2026-10-15.

### Sales · FY2025–2026

sales -10.7%; source https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YAUO.pdf; observed 2026-06-22.

- FY2017: JPY 1.94T 

- FY2018: JPY 2.19T 

- FY2019: JPY 2.32T 

- FY2020: JPY 2.23T 

- FY2021: JPY 2.29T 

- FY2022: JPY 2.77T 

- FY2023: JPY 2.90T 

- FY2024: JPY 2.45T 

- FY2025: JPY 2.61T 

- FY2026: JPY 2.33T 

### Gross margin · FY2026

gross margin 28.7%; source https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YAUO.pdf; observed 2026-06-22.

- FY2017: 34.5% 

- FY2018: 34.2% 

- FY2019: 32.0% 

- FY2020: 31.8% 

- FY2021: 33.7% 

- FY2022: 31.6% 

- FY2023: 28.4% 

- FY2024: 20.4% 

- FY2025: 27.8% 

- FY2026: 28.7% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in chemicals; annual sales are JPY 2.3 trillion.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YAUO.pdf (filed 2026-06-22); FY2026: revenue 2328515000000; grossProfit 668268000000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 20.4% to 28.7% during 2024–26; it earns 8% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2024: grossProfit / revenue = 20.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2025: grossProfit / revenue = 27.8%.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YAUO.pdf (filed 2026-06-22); FY2026: grossProfit / revenue = 28.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); 10-year return on capital observations [[2017,0.07822181265103169],[2018,0.13123786551577316],[2019,0.09809585261666258],[2020,0.04837975592013821],[2021,0.049815883332411076],[2022,0.08149225951179175],[2023,-0.009777235773936499],[2024,-0.18855777226245865],[2025,0.08250299814888677],[2026,0.09003066033206446]]; median 0.07985703608141172. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2017: growth capex 29618000000; upkeep 102137000000; owner earnings 75823988449.67664. Growth capex / owner earnings = 0.39061516817539965.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2018: growth capex 42104000000; upkeep 107103000000; owner earnings 131304496772.52776. Growth capex / owner earnings = 0.32065923890589276.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2019: growth capex 40503322016.80759; upkeep 134312677983.19241; owner earnings 98650402131.66975. Growth capex / owner earnings = 0.41057432247207026.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2020: growth capex 0; upkeep 120449000000; owner earnings 28944198202.172832. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2021: growth capex 0; upkeep 120812000000; owner earnings 46080876546.11159. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2022: growth capex 0; upkeep 107467000000; owner earnings 191015414805.00116. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2025: growth capex 0; upkeep 130465000000; cash acquisitions 0; owner earnings 22256180401.986504. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YAUO.pdf (filed 2026-06-22); FY2026: growth capex 0; upkeep 121566000000; cash acquisitions 0; owner earnings 49782379109.54749. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); Dividend observations: [[2017,21258000000],[2018,27797000000],[2019,37606000000],[2020,35970000000],[2021,19620000000],[2022,31068000000],[2023,42484000000],[2024,19639000000],[2025,9866000000],[2026,19680000000]]. Zero only counted when supported by a complete cash-flow statement.

### What the price says

The price is 0.4 times annual sales.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); Closing price 584.2000122070312 JPY; reporting-to-trading FX 1; FY2026 annual sales per share 1419.7190575417985; price multiple 0.41148987125562453. FY2026 cash earnings/share 30.352818148732254. Closing-price date 2026-10-15.

## Monthly share-price history (JPY per share)

- 2016-11: JPY 523.00 per share

- 2016-12: JPY 556.00 per share

- 2017-01: JPY 603.00 per share

- 2017-02: JPY 626.00 per share

- 2017-03: JPY 622.00 per share

- 2017-04: JPY 629.00 per share

- 2017-05: JPY 578.00 per share

- 2017-06: JPY 646.00 per share

- 2017-07: JPY 648.00 per share

- 2017-08: JPY 659.00 per share

- 2017-09: JPY 703.00 per share

- 2017-10: JPY 794.00 per share

- 2017-11: JPY 782.00 per share

- 2017-12: JPY 810.00 per share

- 2018-01: JPY 800.00 per share

- 2018-02: JPY 669.00 per share

- 2018-03: JPY 620.00 per share

- 2018-04: JPY 629.00 per share

- 2018-05: JPY 659.00 per share

- 2018-06: JPY 628.00 per share

- 2018-07: JPY 641.00 per share

- 2018-08: JPY 631.00 per share

- 2018-09: JPY 665.00 per share

- 2018-10: JPY 566.00 per share

- 2018-11: JPY 616.00 per share

- 2018-12: JPY 533.00 per share

- 2019-01: JPY 566.00 per share

- 2019-02: JPY 552.00 per share

- 2019-03: JPY 515.00 per share

- 2019-04: JPY 552.00 per share

- 2019-05: JPY 470.00 per share

- 2019-06: JPY 500.00 per share

- 2019-07: JPY 500.00 per share

- 2019-08: JPY 465.00 per share

- 2019-09: JPY 485.00 per share

- 2019-10: JPY 499.00 per share

- 2019-11: JPY 494.00 per share

- 2019-12: JPY 498.00 per share

- 2020-01: JPY 472.00 per share

- 2020-02: JPY 393.00 per share

- 2020-03: JPY 321.00 per share

- 2020-04: JPY 334.00 per share

- 2020-05: JPY 334.00 per share

- 2020-06: JPY 322.00 per share

- 2020-07: JPY 303.00 per share

- 2020-08: JPY 345.00 per share

- 2020-09: JPY 347.00 per share

- 2020-10: JPY 340.00 per share

- 2020-11: JPY 370.00 per share

- 2020-12: JPY 415.00 per share

- 2021-01: JPY 493.00 per share

- 2021-02: JPY 515.00 per share

- 2021-03: JPY 573.00 per share

- 2021-04: JPY 557.00 per share

- 2021-05: JPY 600.00 per share

- 2021-06: JPY 589.00 per share

- 2021-07: JPY 567.00 per share

- 2021-08: JPY 558.00 per share

- 2021-09: JPY 585.00 per share

- 2021-10: JPY 560.00 per share

- 2021-11: JPY 524.00 per share

- 2021-12: JPY 542.00 per share

- 2022-01: JPY 574.00 per share

- 2022-02: JPY 550.00 per share

- 2022-03: JPY 562.00 per share

- 2022-04: JPY 551.00 per share

- 2022-05: JPY 531.00 per share

- 2022-06: JPY 531.00 per share

- 2022-07: JPY 522.00 per share

- 2022-08: JPY 550.00 per share

- 2022-09: JPY 497.00 per share

- 2022-10: JPY 501.00 per share

- 2022-11: JPY 498.00 per share

- 2022-12: JPY 474.00 per share

- 2023-01: JPY 497.00 per share

- 2023-02: JPY 477.00 per share

- 2023-03: JPY 445.00 per share

- 2023-04: JPY 458.00 per share

- 2023-05: JPY 416.00 per share

- 2023-06: JPY 436.50 per share

- 2023-07: JPY 438.10 per share

- 2023-08: JPY 403.40 per share

- 2023-09: JPY 407.00 per share

- 2023-10: JPY 382.00 per share

- 2023-11: JPY 377.50 per share

- 2023-12: JPY 344.00 per share

- 2024-01: JPY 349.40 per share

- 2024-02: JPY 303.80 per share

- 2024-03: JPY 337.30 per share

- 2024-04: JPY 337.30 per share

- 2024-05: JPY 322.30 per share

- 2024-06: JPY 344.70 per share

- 2024-07: JPY 388.80 per share

- 2024-08: JPY 417.90 per share

- 2024-09: JPY 407.50 per share

- 2024-10: JPY 410.10 per share

- 2024-11: JPY 362.20 per share

- 2024-12: JPY 349.00 per share

- 2025-01: JPY 336.20 per share

- 2025-02: JPY 352.70 per share

- 2025-03: JPY 361.40 per share

- 2025-04: JPY 343.70 per share

- 2025-05: JPY 346.80 per share

- 2025-06: JPY 348.50 per share

- 2025-07: JPY 379.70 per share

- 2025-08: JPY 445.90 per share

- 2025-09: JPY 466.10 per share

- 2025-10: JPY 453.60 per share

- 2025-11: JPY 477.00 per share

- 2025-12: JPY 445.60 per share

- 2026-01: JPY 470.00 per share

- 2026-02: JPY 569.70 per share

- 2026-03: JPY 499.50 per share

- 2026-04: JPY 509.60 per share

- 2026-05: JPY 610.20 per share

- 2026-06: JPY 513.50 per share

- 2026-07: JPY 521.30 per share

- 2026-08: JPY 572.20 per share

- 2026-09: JPY 580.10 per share

- 2026-10: JPY 598.90 per share

## Annual estimated value (JPY per share)

- FY2021: low JPY 728.20 per share, central JPY 810.63 per share, high JPY 920.36 per share

- FY2022: low JPY 951.50 per share, central JPY 1,059.94 per share, high JPY 1,204.31 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original EDINET filing](https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YAUO.pdf); period 2026-03-31, filed 2026-06-22.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.