Kyowa Leather Cloth Co., Ltd. (3553) AI Stock Analysis

• Market Cap: ¥29.59B
• Dividend Yield: 4.09%
• Average Volume (3M): 67.29K
• Price to Earnings (P/E): 97.3
• Beta (1Y): 0.84
• Revenue Growth: 3.31%
• EPS Growth: -70.30%
• Country: JP
• Employees: 1,395
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals
• EPS (TTM): 15.19
• Shares Outstanding: 24,500,000
• 10 Day Avg. Volume: 44,920
• 30 Day Avg. Volume: 67,286
• PEG Ratio: -0.35
• Price to Book (P/B): 0.47
• Price to Sales (P/S): 0.30
• P/FCF Ratio: -6.92
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: ¥1,260.00 ▲(46.68% Upside)
• Action: Downgraded Date: 12/03/25
• Date: Action: Downgraded 12/03/25

Kyowa Leather Cloth Co., Ltd. has a solid financial foundation with stable revenue growth and a strong balance sheet. However, the high P/E ratio and overbought technical indicators suggest caution. The attractive dividend yield partially offsets valuation concerns, making it appealing for income investors.

Positive Factors

Strong balance sheet / low leverage

Conservative leverage and a robust equity ratio provide durable financial flexibility. This supports capital allocation for maintenance capex, working capital and selective investments, helps absorb industry cyclicality, and reduces refinancing risk over a multi‑quarter horizon.

Stable revenue growth trend

Consistent ~6% revenue growth indicates steady end-market demand and customer retention in core synthetic leather markets. That revenue stability supports predictable cash flow generation, scale advantages and multi‑period planning for operations and product development.

Resilient gross and EBITDA margins

Sustained gross and EBITDA margin resilience signals durable manufacturing efficiency or pricing power in coated sheet materials. That margin stability underpins long‑term profitability, funds reinvestment and dividends, and cushions the business through raw material cycles.

Negative Factors

Significant free cash flow decline

A sharp fall in free cash flow weakens the firm's ability to self‑fund capex, deleverage or sustain payouts without tapping reserves or external financing. Over several quarters this can constrain growth projects, increase financing costs and force tighter capital allocation.

Large EPS contraction / net margin pressure

A near‑80% EPS decline and falling net margin signal material earnings volatility or one‑off pressures. Persisting profit weakness reduces retained earnings, undermines payout sustainability and raises questions on long‑term operational or cost issues that can impair investor confidence.

Slight decline in total assets and equity

Erosion of assets and equity, even if modest, shrinks the capital base and reduces financial cushion. Continued declines would limit borrowing capacity, hamper investment in capacity or product upgrades, and increase vulnerability to industry downturns over the medium term.

Kyowa Leather Cloth Co., Ltd. Business Overview & Revenue Model

Company Description

Kyowa Leather Cloth Co., Ltd. (3553) is a leading manufacturer specializing in synthetic leather and related materials. The company operates primarily in the textile and fashion sectors, providing high-quality products for various applications, including automotive interiors, fashion accessories, and upholstery. With a focus on innovation and sustainability, Kyowa Leather Cloth integrates advanced technologies and eco-friendly practices into its production process, catering to both domestic and international markets.

How the Company Makes Money

Kyowa Leather Cloth Co., Ltd. generates revenue primarily through the sale of synthetic leather products to various industries, including automotive, fashion, and interior design. The company has established key partnerships with manufacturers and brands that require durable and aesthetically pleasing materials, which helps secure bulk orders and steady demand. Additional revenue streams may include licensing agreements and collaborations for specialized applications of their materials. By continuously investing in research and development, Kyowa Leather Cloth aims to enhance product offerings and expand into new markets, contributing to its overall financial growth.

Kyowa Leather Cloth Co., Ltd. Financial Statement Overview

Summary

Kyowa Leather Cloth Co., Ltd. showcases stable revenue growth and a strong balance sheet, supported by efficient operations. However, challenges in cash flow management, particularly in free cash flow generation, warrant attention.

Income Statement

Kyowa Leather Cloth Co., Ltd. has demonstrated a stable revenue growth trajectory with a noticeable increase from 2024 to 2025. The gross profit margin is relatively strong, although there was a slight decline in net profit margin in 2025, indicating some pressure on profitability. EBIT and EBITDA margins have shown resiliency, supporting the company's operational efficiency.

Balance Sheet

The company maintains a strong balance sheet with a low debt-to-equity ratio, indicating conservative leverage and financial stability. The equity ratio is robust, reflecting a solid capital structure. However, the slight decrease in total assets and equity from 2024 to 2025 could be a point of concern if the trend continues.

Cash Flow

Kyowa Leather Cloth Co., Ltd. experienced a significant drop in free cash flow in 2025, raising concerns about cash generation capabilities. The operating cash flow to net income ratio remains positive, indicating reasonable cash conversion, but the free cash flow to net income ratio highlights the need for improved capital expenditure management.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	56.43B	56.40B	52.04B	45.79B	47.07B	41.18B
Gross Profit	9.45B	9.80B	9.94B	7.28B	8.56B	7.54B
EBITDA	3.30B	4.22B	5.32B	3.14B	4.83B	3.83B
Net Income	781.00M	1.10B	1.96B	347.00M	1.68B	1.44B
Balance Sheet
Total Assets	56.39B	59.47B	60.65B	52.95B	54.27B	52.64B
Cash, Cash Equivalents and Short-Term Investments	10.73B	11.13B	14.77B	10.71B	10.58B	11.66B
Total Debt	569.00M	390.00M	358.00M	342.00M	433.00M	698.00M
Total Liabilities	19.57B	22.07B	23.08B	18.42B	19.60B	19.20B
Stockholders Equity	35.69B	36.23B	36.33B	33.49B	33.79B	32.69B
Cash Flow
Free Cash Flow	0.00	-2.44B	4.33B	-81.00M	276.00M	1.10B
Operating Cash Flow	0.00	1.33B	7.11B	2.96B	2.97B	2.75B
Investing Cash Flow	0.00	-4.49B	-1.92B	-1.94B	-2.75B	-2.37B
Financing Cash Flow	0.00	-1.29B	-587.00M	-703.00M	-1.42B	-781.00M

Kyowa Leather Cloth Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 859.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3553, the sentiment is Positive. The current price of 859 is below the 20-day moving average (MA) of 1139.30, below the 50-day MA of 1095.82, and below the 200-day MA of 896.18, indicating a bullish trend. The MACD of 22.62 indicates Negative momentum. The RSI at 70.33 is Negative, neither overbought nor oversold. The STOCH value of 85.79 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3553.

Kyowa Leather Cloth Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5013	78 Outperform	¥43.82B	8.53	―	3.53%	-3.45%	30.52%
4045	73 Outperform	¥204.68B	16.43	4.41%	3.80%	-1.50%	-32.46%
4189	67 Neutral	¥115.56B	14.28	―	3.88%	2.61%	30.29%
4970	65 Neutral	¥91.59B	35.93	―	0.67%	10.18%	-14.36%
3553	64 Neutral	¥29.59B	97.25	―	4.09%	3.31%	-70.30%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
5142	53 Neutral	¥25.83B	-45.30	―	1.39%	-0.12%	―