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

• Market Cap: ¥23.89B
• Dividend Yield: 4.09%
• Average Volume (3M): 67.29K
• Price to Earnings (P/E): 17.3
• Beta (1Y): 0.88
• 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: ¥1,247.00 ▲(45.17% 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

Balance sheet strength

Conservative leverage and a robust equity ratio provide durable financial flexibility. This lowers interest burden risk, preserves borrowing capacity for capex or working capital needs, and helps the company withstand sector cyclicality without forcing asset sales or dilutive financing.

Revenue and margin resilience

Consistent top-line expansion alongside resilient gross and operating margins supports sustainable cash generation. Stable revenue growth and protected operating margins enable reinvestment in product development and customer relationships, strengthening competitive position over the medium term.

Operational efficiency

Reported operational efficiency suggests good cost control and manufacturing discipline in synthetic leather production. Sustained efficiency preserves margins through raw-material cycles, enabling steady returns on sales and better funding of strategic initiatives without excessive capital requirements.

Negative Factors

Free cash flow weakness

A material decline in free cash flow undermines the company’s ability to self-fund capex, working capital, or distributions. If persistent, weaker FCF forces reliance on cash reserves or external financing, reducing strategic optionality and increasing sensitivity to interest or liquidity shocks.

Earnings volatility (EPS collapse)

An ~-79% EPS change signals meaningful earnings volatility or one-off pressures that impair internal funding and strategic planning. Persistent earnings swings can constrain reinvestment, complicate multi-year forecasting, and weaken stakeholder confidence in management’s execution.

Erosion in asset/equity base

Declining total assets and equity may indicate shrinking scale or retained-earnings pressure. If the trend persists, it limits capacity to pursue growth projects, weakens credit metrics, and reduces strategic flexibility, making the firm more vulnerable in downturns or when competing for large contracts.

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	9.73B	9.80B	9.72B	7.09B	8.31B	7.27B
EBITDA	4.25B	4.67B	5.17B	2.79B	4.33B	3.83B
Net Income	781.00M	1.10B	1.96B	348.00M	1.68B	1.44B
Balance Sheet
Total Assets	56.39B	60.50B	61.84B	53.58B	54.92B	52.97B
Cash, Cash Equivalents and Short-Term Investments	10.73B	11.13B	14.77B	10.71B	10.58B	11.66B
Total Debt	569.00M	595.00M	358.00M	456.00M	544.00M	854.00M
Total Liabilities	19.57B	23.09B	24.27B	19.05B	20.24B	19.53B
Stockholders Equity	35.69B	36.23B	36.33B	33.49B	33.79B	32.69B
Cash Flow
Free Cash Flow	0.00	-2.44B	4.52B	248.00M	476.00M	1.12B
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: Negative
• Last Price: 859.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3553, the sentiment is Negative. The current price of 859 is below the 20-day moving average (MA) of 1092.65, below the 50-day MA of 1104.94, and below the 200-day MA of 920.08, indicating a neutral trend. The MACD of -39.14 indicates Positive momentum. The RSI at 32.35 is Neutral, neither overbought nor oversold. The STOCH value of 8.92 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	76 Outperform	¥40.23B	5.81	―	3.53%	-3.45%	30.52%
4045	73 Outperform	¥181.15B	14.03	4.41%	3.80%	-1.50%	-32.46%
4189	67 Neutral	¥103.03B	10.01	―	3.88%	2.61%	30.29%
4970	65 Neutral	¥78.42B	17.82	―	0.67%	10.18%	-14.36%
3553	64 Neutral	¥23.89B	17.30	―	4.09%	3.31%	-70.30%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
5142	50 Neutral	¥20.98B	15.68	―	1.39%	-0.12%	―