KH Neochem Co., Ltd.
4189・Prime Market・Chemicals
KH Neochem Co., Ltd. (Chemicals Business, single segment)
A petrochemical manufacturer developing Functional Materials, Electronic Materials, and Basic Chemicals businesses centered on Oxo technology
| Period | Current | Previous | Change |
|---|---|---|---|
| Net sales (Q1 FY2026 cumulative) | ¥25,581 million | ¥28,809 million (Q1 FY2025) | ↓ |
| Operating profit (Q1 FY2026 cumulative) | ¥2,094 million | ¥2,706 million (Q1 FY2025) | ↓ |
| Operating margin (Q1 FY2026 cumulative) | 8.2% | 9.4% (Q1 FY2025) | ↓ |
| Ordinary profit (Q1 FY2026 cumulative) | ¥1,927 million | ¥2,608 million (Q1 FY2025) | ↓ |
| Quarterly net income attributable to owners of parent (Q1 FY2026 cumulative) | ¥1,348 million | ¥1,769 million (Q1 FY2025) | ↓ |
| Quarterly net income per share (Q1 FY2026 cumulative) | ¥38.49 | ¥47.98 (Q1 FY2025) | ↓ |
| Total assets (end of Q1 FY2026) | ¥122,251 million | ¥130,102 million (end of FY2025) | ↓ |
| Equity ratio (end of Q1 FY2026) | 57.0% | 53.6% (end of FY2025) | ↑ |
| Depreciation (Q1 FY2026 cumulative) | ¥1,492 million | ¥1,406 million (Q1 FY2025) | ↑ |
| Full-year net sales forecast (FY2026, ending March... ) | ¥114,000 million | ¥115,098 million (FY2025 actual) | ↓ |
| Full-year operating profit forecast (FY2026) | ¥13,500 million | ¥11,248 million (FY2025 actual) | ↑ |
Business Details
Utilizing 'Oxo technology' as its core technology, the company operates across three fields: refrigerator oil raw materials and cosmetics raw materials (Functional Materials), high-purity solvents (Electronic Materials), and solvents and plasticizer raw materials (Basic Chemicals). It supplies distinctive chemical products to a diverse range of domestic and overseas industrial customers, and claims the world's top position in refrigerator oil raw materials. Major customers are Idemitsu Kosan (17.5% of net sales) and Miyako Chemical (9.9%). Domestic sales account for 76.1% of net sales, with the remainder going to China, Asia, and other overseas markets.
Recent Overview
Q1 saw decreased sales and profit due to weakness in Functional Materials and Basic Chemicals, with only Electronic Materials achieving increased sales and profit
In Q1 FY2026 (fiscal year ending December 2026), net sales were ¥25,581 million (down 11.2% year on year) and operating profit was ¥2,094 million (down 22.6%), representing decreased sales and profit. In Functional Materials, sales volume of refrigerator oil raw materials declined due to continued inventory adjustment stemming from U.S. refrigerant regulations and the impact of China's real estate slump (net sales down 17.6%, operating profit down 16.1%). Basic Chemicals was directly hit by increased manufacturing costs from large-scale periodic maintenance, with operating profit deteriorating sharply by 58.2%. On the other hand, Electronic Materials performed well, capturing demand for cutting-edge semiconductors related to generative AI, with net sales up 22.5% and operating profit up 33.0%. The full-year earnings forecast remains unchanged (net sales of ¥114,000 million, operating profit of ¥13,500 million). No forecast revision was made due to the uncertainty surrounding the Middle East situation. The annual dividend forecast is ¥110.00 (an increase of ¥5.00 from the previous fiscal year).
Key Products
Growth Drivers
- Increasing demand for high-purity solvents and cutting-edge semiconductor materials against the backdrop of the expanding generative AI and semiconductor markets
- Growth in demand for refrigerator oil raw materials driven by the medium-term expansion of the global air conditioner market (particularly in Asia, centered on China and India)
- Expanded production capacity and room for sales growth from the refrigerator oil raw materials facility enhancement completed in 2024
- Growth in sales of high-quality grade cosmetics raw materials (1,3-butylene glycol), centered on the domestic market
- Creation of new businesses such as PHB (polyhydroxybutyrate) and sugar chains, and carbon neutrality initiatives leveraging the CO₂ recovery equipment at the Chiba Plant
Risks
- Continued sluggish market conditions for Basic Chemicals due to oversupply of petrochemical products in China and inflows of low-priced imported products
- Risk of increased manufacturing costs due to sharp fluctuations in raw material and fuel (such as naphtha) prices (FY2026 assumption: domestic naphtha at ¥60,000/KL)
- Foreign exchange risk (FY2026 assumption: ¥150 to the U.S. dollar) affecting export profitability and raw material procurement costs
- Fluctuations in demand for Functional Materials in the air conditioner market due to inventory adjustments, unusual weather, and changes in subsidy policy (the rebound decrease stemming from U.S. refrigerant regulations is ongoing)
- Structural stagnation in demand for Basic Chemicals due to the continued slump in domestic automobile production and housing starts
- Impact on raw material procurement and logistics costs from uncertainty in the Middle East situation (the company has explicitly stated it is difficult to reasonably reflect this in earnings forecasts)
- Profit pressure from increased manufacturing costs during large-scale periodic maintenance (materialized in Basic Chemicals in Q1 FY2026)
Last updated: March 25, 2026