Kumiai Chemical Industry Co., Ltd.

TICKER 4996.T

ISIN JP3267600009

Market cap. JPY

84,898,537,890

Shs outstanding 120,423,458

Kumiai Chemical Industry Co., Ltd. manufactures and sells agrochemicals. Its agricultural chemicals comprise herbicides, fungicides, acaricide, microbial pesticide, and PGR; and fine chemicals include chlorotoluenes, chlorobenzyl chlorides, chlorobenzotrichlorides, chlorobenzaldehydes, chlorobenzoyl chlorides, chlorobenzoic acids, phenoxyphenols, and phosphines. The company also offers curing agents. It markets its products in Japan, as well as in approximately 50 countries. The company was formerly known as Ihara Agrochemical Co., Ltd. and changed its name to Kumiai Chemical Industry Co., Ltd. in 1968. Kumiai Chemical Industry Co., Ltd. was founded in 1928 and is headquartered in Tokyo, Japan.

Strategy: Japan Tech Titans

Return at exit: 1.9%

Market underperformance amid profit concerns

• Rotated out as market metrics lagged peers despite attractive valuation metrics. • Stock has declined across multiple timeframes (-11.4% over 3 months, ~10% over 6 months), underperforming relative to other opportunities in our universe. • Profitability challenges evident with EBITDA declining ~2% despite revenue growth, and concerning forward guidance projecting a 32% operating profit decrease for fiscal 2026. • Significant extraordinary losses (¥3.8 billion) from asset impairment in Thailand operations have pressured financial performance. • Positive revenue growth (+5.8% LTM, +13% quarterly) and trading below book value (P/B: 0.59) suggest underlying business stability despite current challenges. • This change reflects portfolio rotation, not a sell signal.