# Shin-Etsu Chemical (4063.JP)

Canonical: https://gigainvestors.com/s/4063.JP

Analysis as of: 2026-10-15T07:10:09.101Z. Financial observations: FY2013–FY2026.

Listing currency: JPY. Reporting currency: JPY.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: JPY 5,963.00 per share; close as of 2026-10-15.

Estimated value: low JPY 3,433.57 per share, central JPY 3,786.55 per share, high JPY 4,256.45 per share. Buy at or below the central value JPY 3,786.55 per share. Valuation as of 2026-10-15T07:10:09.101Z; scenarios are not confidence intervals.

Expected annual return: 6.9% at the stated quote. About 6.9% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; JP 10-year bond 2.9% + 4 points).

## Checklist

### understandable: pass

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

- Financial history: 10 years

- Years with declining revenue: 4

- Years with a net loss: 0

- Operating margin variation: 0.16×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.19×

- FY2018: 0.23×

- FY2019: 0.25×

- FY2020: 0.26×

- FY2021: 0.26×

- FY2022: 0.33×

- FY2023: 0.36×

- FY2024: 0.29×

- FY2025: 0.29×

- FY2026: 0.25×

### moat: pass

- ROIC, median of available years: 19.3%

- ROIC, second-lowest year: 15.1%

- Typical minus recent gross margin: 1.9 pp

- Typical gross margin (annual median): 36.2%

- Recent gross margin (lower of latest and 3-year median): 34.2%

- Years with nonpositive capital: 0

- Capital spending / revenue: 14.1%

- ROIC including acquisitions, ten-year median: 14.5%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 14.6%

- FY2018: 20.4%

- FY2019: 21.3%

- FY2020: 19.2%

- FY2021: 17.3%

- FY2022: 26.6%

- FY2023: 32.5%

- FY2024: 19.4%

- FY2025: 18.4%

- FY2026: 15.1%

### economics: pass

- Owner earnings / net income, 5-yr: 0.87×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: JPY 2.38T

- Net income, five-year total: JPY 2.74T

- Return on incremental invested capital: 18.2%

- Working capital / revenue, annual change: 1.2 pp

- Working capital / revenue, change between three-year averages: 9.9 pp

- Working capital / revenue, final three-year average: 43.6%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 1.00×

- FY2023: 1.00×

- FY2024: 0.71×

- FY2025: 0.81×

- FY2026: 0.78×

### management: pass

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

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 20.4% vs 18.4%

- Per-share earnings: 82.57 to 259.41 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -1.3%

- Ordinary dilution, 5-year annual growth: -2.0%

- Market cap gain: JPY 7.64T

- Cumulative retained earnings: JPY 2.16T

- Diluted shares, 10-year annual growth: -1.3%

- Diluted shares, 5-year annual growth: -2.0%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: 15.4%

- Per-share value change: JPY 176.84

- Per-share value, starting three-year median: JPY 82.57

- Per-share value, ending three-year median: JPY 259.41

- Buybacks concentrated in cheaper years (correlation): 0.24

- Average buyback yield: 1.2%

- Buyback history: 10 years

- Debt-funded buybacks: No

- Acquisition spending: JPY 30B

- Cumulative net income, 10 years: JPY 4.10T

- ROIC, first three-year median: 20.4%

- ROIC, last three-year median: 18.4%

Chart: Earnings per share; fiscal year observations.

- FY2017: JPY 82.57

- FY2018: JPY 124.86

- FY2019: JPY 145.20

- FY2020: JPY 151.03

- FY2021: JPY 141.35

- FY2022: JPY 240.76

- FY2023: JPY 347.84

- FY2024: JPY 259.41

- FY2025: JPY 269.52

- FY2026: JPY 252.69

### accounting: pass

- Sloan accruals: -4.2%

- Receivables to sales index (DSRI): 1.04×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.50×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.01×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -4.3%

- FY2018: -2.3%

- FY2019: -3.0%

- FY2020: -3.0%

- FY2021: -3.2%

- FY2022: -1.3%

- FY2023: -1.7%

- FY2024: -4.6%

- FY2025: -6.2%

- FY2026: -4.2%

## Holders

## Price story

Down 23% since May 2026 · sales +0.5%

Story as of 2026-10-16T10:00:14.115Z; price observation 2026-10-15.

Price needs cash profits to grow 7.9% a year for ten years

### Sales · FY2025–2026

sales +0.5%; source https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YE9I.pdf; observed 2026-06-19.

- FY2017: JPY 1.24T 

- FY2018: JPY 1.44T 

- FY2019: JPY 1.59T 

- FY2020: JPY 1.54T 

- FY2021: JPY 1.50T 

- FY2022: JPY 2.07T 

- FY2023: JPY 2.81T 

- FY2024: JPY 2.41T 

- FY2025: JPY 2.56T 

- FY2026: JPY 2.57T 

### Gross margin · FY2026

gross margin 34.2%; source https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YE9I.pdf; observed 2026-06-19.

- FY2017: 29.8% 

- FY2018: 33.2% 

- FY2019: 34.8% 

- FY2020: 36.0% 

- FY2021: 36.3% 

- FY2022: 41.8% 

- FY2023: 43.2% 

- FY2024: 37.7% 

- FY2025: 38.4% 

- FY2026: 34.2% 

## Owner memo

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

### How it makes money

Annual sales are JPY 2.6 trillion.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YE9I.pdf (filed 2026-06-19); FY2026: revenue 2573969000000; grossProfit 880793000000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 34.2% to 38.4% during 2024–26; it earns 19.3% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-19); FY2024: grossProfit / revenue = 37.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-19); FY2025: grossProfit / revenue = 38.4%.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YE9I.pdf (filed 2026-06-19); FY2026: grossProfit / revenue = 34.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-19); 10-year return on capital observations [[2017,0.14599441039532154],[2018,0.20388545407945172],[2019,0.21268683248208783],[2020,0.1915408872459],[2021,0.1731897771647948],[2022,0.2661297181906881],[2023,0.325218440154557],[2024,0.1944275277608815],[2025,0.18385421694287674],[2026,0.1509317139916624]]; median 0.19298420750339074. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Spends 2.4% of cash earnings on expansion; earns 18.2% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-19); FY2017: growth capex 0; upkeep 136274000000; owner earnings 132725000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-19); FY2018: growth capex 51702000000; upkeep 112016000000; owner earnings 266235000000. Growth capex / owner earnings = 0.19419685616091048.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-19); FY2019: growth capex 90532000000; upkeep 137570000000; owner earnings 309125000000. Growth capex / owner earnings = 0.2928653457339264.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-19); FY2020: growth capex 0; upkeep 269428000000; owner earnings 175771000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-19); FY2021: growth capex 0; upkeep 237372000000; owner earnings 200167000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-19); FY2022: growth capex 28768000000; upkeep 168788000000; owner earnings 500117000000. Growth capex / owner earnings = 0.05752253972570418.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-19); FY2023: growth capex 85735000000; upkeep 213632000000; owner earnings 708238000000. Growth capex / owner earnings = 0.12105393949491555.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-19); FY2024: growth capex 0; upkeep 377478000000; owner earnings 370281000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-19); FY2025: growth capex 101560191078.66052; upkeep 341276808921.3395; owner earnings 431101191078.6605. Growth capex / owner earnings = 0.2355831836709758.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YE9I.pdf (filed 2026-06-19); FY2026: growth capex 8977428355.682068; upkeep 346972571644.31793; owner earnings 370459428355.68207. Growth capex / owner earnings = 0.024233229521324916.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-19); Incremental return on capital 0.18161117337661917, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-19); Dividend observations: [[2017,48987000000],[2018,53301000000],[2019,74655000000],[2020,87410000000],[2021,91420000000],[2022,120481000000],[2023,195365000000],[2024,211242000000],[2025,204724000000],[2026,203162000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YE9I.pdf (filed 2026-06-19); FY2026: cash repurchases 500006000000 JPY.

### What could break it

"② 為替相場の変動による影響" (4063 filing, Jun 2026)

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YE9I.pdf (filed 2026-06-19); ② 為替相場の変動による影響

### What the price says

The price assumes cash profits grow 7.9% yearly over ten years; actual growth was 13.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-19); Ten-year compound average after fade. Initial solved rate 0.10044498396255308. Price 5963; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 54.71643495419308 → FY2026 197.30133257288261. Closing-price date 2026-10-15.

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

- 2016-11: JPY 1,692.00 per share

- 2016-12: JPY 1,813.40 per share

- 2017-01: JPY 1,949.40 per share

- 2017-02: JPY 1,900.60 per share

- 2017-03: JPY 1,928.80 per share

- 2017-04: JPY 1,936.80 per share

- 2017-05: JPY 1,986.40 per share

- 2017-06: JPY 2,037.00 per share

- 2017-07: JPY 2,022.00 per share

- 2017-08: JPY 1,944.80 per share

- 2017-09: JPY 2,012.00 per share

- 2017-10: JPY 2,382.00 per share

- 2017-11: JPY 2,353.00 per share

- 2017-12: JPY 2,290.00 per share

- 2018-01: JPY 2,482.00 per share

- 2018-02: JPY 2,275.00 per share

- 2018-03: JPY 2,201.00 per share

- 2018-04: JPY 2,201.00 per share

- 2018-05: JPY 2,178.00 per share

- 2018-06: JPY 1,974.60 per share

- 2018-07: JPY 2,254.00 per share

- 2018-08: JPY 2,085.00 per share

- 2018-09: JPY 2,013.00 per share

- 2018-10: JPY 1,893.80 per share

- 2018-11: JPY 2,027.00 per share

- 2018-12: JPY 1,707.20 per share

- 2019-01: JPY 1,835.20 per share

- 2019-02: JPY 1,854.20 per share

- 2019-03: JPY 1,856.00 per share

- 2019-04: JPY 2,086.00 per share

- 2019-05: JPY 1,809.40 per share

- 2019-06: JPY 2,007.00 per share

- 2019-07: JPY 2,231.00 per share

- 2019-08: JPY 2,143.00 per share

- 2019-09: JPY 2,312.00 per share

- 2019-10: JPY 2,432.00 per share

- 2019-11: JPY 2,342.00 per share

- 2019-12: JPY 2,412.00 per share

- 2020-01: JPY 2,543.00 per share

- 2020-02: JPY 2,429.00 per share

- 2020-03: JPY 2,146.00 per share

- 2020-04: JPY 2,403.00 per share

- 2020-05: JPY 2,524.00 per share

- 2020-06: JPY 2,519.00 per share

- 2020-07: JPY 2,455.00 per share

- 2020-08: JPY 2,577.00 per share

- 2020-09: JPY 2,737.00 per share

- 2020-10: JPY 2,778.00 per share

- 2020-11: JPY 3,427.00 per share

- 2020-12: JPY 3,608.00 per share

- 2021-01: JPY 3,635.00 per share

- 2021-02: JPY 3,470.00 per share

- 2021-03: JPY 3,722.00 per share

- 2021-04: JPY 3,690.00 per share

- 2021-05: JPY 3,771.00 per share

- 2021-06: JPY 3,716.00 per share

- 2021-07: JPY 3,550.00 per share

- 2021-08: JPY 3,641.00 per share

- 2021-09: JPY 3,780.00 per share

- 2021-10: JPY 4,051.00 per share

- 2021-11: JPY 3,800.00 per share

- 2021-12: JPY 3,984.00 per share

- 2022-01: JPY 3,808.00 per share

- 2022-02: JPY 3,534.00 per share

- 2022-03: JPY 3,758.00 per share

- 2022-04: JPY 3,597.00 per share

- 2022-05: JPY 3,667.00 per share

- 2022-06: JPY 3,060.00 per share

- 2022-07: JPY 3,392.00 per share

- 2022-08: JPY 3,263.00 per share

- 2022-09: JPY 2,866.00 per share

- 2022-10: JPY 3,108.00 per share

- 2022-11: JPY 3,514.00 per share

- 2022-12: JPY 3,245.00 per share

- 2023-01: JPY 3,815.00 per share

- 2023-02: JPY 3,830.00 per share

- 2023-03: JPY 4,275.00 per share

- 2023-04: JPY 3,863.00 per share

- 2023-05: JPY 4,297.00 per share

- 2023-06: JPY 4,768.00 per share

- 2023-07: JPY 4,679.00 per share

- 2023-08: JPY 4,659.00 per share

- 2023-09: JPY 4,343.00 per share

- 2023-10: JPY 4,468.00 per share

- 2023-11: JPY 5,212.00 per share

- 2023-12: JPY 5,917.00 per share

- 2024-01: JPY 5,875.00 per share

- 2024-02: JPY 6,387.00 per share

- 2024-03: JPY 6,598.00 per share

- 2024-04: JPY 6,195.00 per share

- 2024-05: JPY 5,855.00 per share

- 2024-06: JPY 6,238.00 per share

- 2024-07: JPY 6,748.00 per share

- 2024-08: JPY 6,422.00 per share

- 2024-09: JPY 5,977.00 per share

- 2024-10: JPY 5,755.00 per share

- 2024-11: JPY 5,554.00 per share

- 2024-12: JPY 5,296.00 per share

- 2025-01: JPY 4,877.00 per share

- 2025-02: JPY 4,492.00 per share

- 2025-03: JPY 4,236.00 per share

- 2025-04: JPY 4,330.00 per share

- 2025-05: JPY 4,641.00 per share

- 2025-06: JPY 4,772.00 per share

- 2025-07: JPY 4,395.00 per share

- 2025-08: JPY 4,557.00 per share

- 2025-09: JPY 4,853.00 per share

- 2025-10: JPY 4,655.00 per share

- 2025-11: JPY 4,702.00 per share

- 2025-12: JPY 4,873.00 per share

- 2026-01: JPY 5,129.00 per share

- 2026-02: JPY 6,168.00 per share

- 2026-03: JPY 6,259.00 per share

- 2026-04: JPY 7,246.00 per share

- 2026-05: JPY 7,758.00 per share

- 2026-06: JPY 7,008.00 per share

- 2026-07: JPY 5,800.00 per share

- 2026-08: JPY 6,023.00 per share

- 2026-09: JPY 5,945.00 per share

- 2026-10: JPY 6,172.00 per share

## Annual estimated value (JPY per share)

- FY2020: low JPY 1,432.34 per share, central JPY 1,559.74 per share, high JPY 1,729.34 per share

- FY2021: low JPY 1,593.25 per share, central JPY 1,738.42 per share, high JPY 1,931.67 per share

- FY2022: low JPY 2,687.47 per share, central JPY 2,965.44 per share, high JPY 3,335.49 per share

- FY2023: low JPY 4,395.52 per share, central JPY 5,954.05 per share, high JPY 6,861.59 per share

- FY2024: low JPY 3,344.18 per share, central JPY 4,420.04 per share, high JPY 5,046.51 per share

- FY2025: low JPY 3,846.45 per share, central JPY 5,114.01 per share, high JPY 5,852.11 per share

- FY2026: low JPY 3,382.48 per share, central JPY 3,730.22 per share, high JPY 4,193.12 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/S100YE9I.pdf); period 2026-03-31, filed 2026-06-19.

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.