Ultrafabrics Holdings Co.,Ltd. (4235) AI Stock Analysis

• Market Cap: ¥11.06B
• Dividend Yield: 5.16%
• Average Volume (3M): 43.39K
• Price to Earnings (P/E): 14.5
• Beta (1Y): 0.79
• Revenue Growth: -1.44%
• EPS Growth: -43.25%
• Country: JP
• Employees: 321
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Furnishings, Fixtures & Appliances
• EPS (TTM): 12.18
• Shares Outstanding: 16,965,200
• 10 Day Avg. Volume: 68,300
• 30 Day Avg. Volume: 43,386
• PEG Ratio: -0.28
• Price to Book (P/B): 0.65
• Price to Sales (P/S): 0.56
• P/FCF Ratio: 6.93
• 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): 58
• Revenue Forecast (FY): ¥21.40B

• Rating: 60 Neutral
• Price Target: ¥763.00 ▲(0.00% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is primarily held back by weakened profitability and only moderate cash conversion/debt coverage despite stable revenue and improving leverage. Technical signals are mixed but lean soft near term with the stock below key short-term averages. Valuation is a relative support, driven by a high dividend yield and a moderate P/E.

Positive Factors

Durable B2B materials business

Ultrafabrics is a focused materials manufacturer supplying engineered PU synthetic leather into mobility, marine, furniture and commercial interiors. This B2B, specification-driven model creates repeat OEM programs and durable demand less exposed to retail cycles, supporting stable revenue over the medium term.

Improving leverage

Reported reduction in leverage signals strengthening balance-sheet resilience: equity has grown versus 2022–2023 and debt-to-equity moved to ~0.94. A lower leverage profile improves financial flexibility for capex, product development and selective M&A over the 2–6 month horizon.

Positive free cash flow recovery

Cash generation improved materially in 2025, producing ~¥1.65B of free cash flow. Stronger FCF supports ongoing reinvestment into product development, dividend support and gradual deleveraging, helping the business fund strategic priorities without immediate capital market dependence.

Negative Factors

Margin compression

Material gross and net margin deterioration signals weaker pricing power or rising input costs. Lower margins reduce earnings power and the firm's buffer against demand shocks, increasing sensitivity to raw-material inflation and pressure on funds available for R&D, capex and dividends over coming months.

Limited cash coverage of debt

While cash flow improved, operating cash covers only ~27% of debt and FCF was ~55% of net income. This modest cash conversion constrains the company's ability to rapidly pay down debt or absorb profit shocks, limiting strategic flexibility and heightening refinancing sensitivity.

Sizable absolute debt amid earnings volatility

Even with improved ratios, absolute debt levels are still meaningful and recent earnings volatility reduces coverage margins. If profitability remains depressed, leverage could re-emerge as a constraint, increasing refinancing risk and limiting investment or dividend capacity in the medium term.

Ultrafabrics Holdings Co.,Ltd. Business Overview & Revenue Model

Company Description

Ultrafabrics Holdings Co., Ltd. (4235) specializes in the production of high-performance synthetic fabrics, primarily designed for a wide range of applications including automotive, furniture, and aviation sectors. The company is known for its innovative approach to material development, focusing on sustainability and durability, while providing premium quality alternatives to traditional leather. Ultrafabrics is recognized for its commitment to environmental responsibility, employing advanced technology to create textiles that are both functional and aesthetically appealing.

How the Company Makes Money

Ultrafabrics generates revenue through the sale of its synthetic fabrics to various industries, including automotive manufacturers, furniture producers, and aviation companies. The company benefits from a diverse revenue model that includes direct sales, partnerships with key distributors, and collaborations with design firms. Significant revenue streams come from long-term contracts with major automotive brands for interior upholstery materials, as well as custom fabric solutions for commercial and residential furniture markets. Additionally, Ultrafabrics invests in research and development to create innovative products that meet evolving market demands, which helps in maintaining a competitive edge and attracting new clients.

Ultrafabrics Holdings Co.,Ltd. Financial Statement Overview

Summary

Revenue has been steady, and leverage has improved to a more moderate level, but profitability weakened materially with notable gross and net margin compression. Cash flow improved year over year, yet cash conversion and debt coverage remain only moderate, limiting financial flexibility.

Income Statement

Revenue has been relatively stable in the last two years (2025 up ~1%, after a small decline in 2024), but profitability has weakened materially. Gross margin compressed meaningfully in 2025 versus 2024, and net margin fell to ~3.8% from ~8.1% (and ~11.3% in 2023), indicating higher costs and/or pricing pressure. While the business remains profitable, the downshift in earnings power and margins is the key offset to the otherwise steady top line.

Balance Sheet

Leverage looks moderate for the group: debt is roughly in line with equity (debt-to-equity ~0.94 in 2025, improved from >1.1–1.6 earlier years), suggesting balance-sheet risk has been trending down. Equity has also grown versus 2022–2023, supporting the capital base. The main watch item is that debt remains sizable in absolute terms, so earnings volatility (as seen in 2025) could matter for future balance-sheet flexibility.

Cash Flow

Cash generation is positive with free cash flow of ~¥1.65B in 2025 and a sharp year-over-year improvement versus 2024. However, operating cash flow covers only a modest portion of debt (coverage ~0.27 in 2025), and free cash flow was only about ~55% of net income in 2025, pointing to less-than-ideal cash conversion. Overall, cash flow improved recently but remains a relative constraint given the company’s debt load.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	20.55B	20.30B	21.05B	19.59B	14.13B
Gross Profit	9.33B	9.84B	10.12B	8.80B	5.44B
EBITDA	3.34B	4.43B	5.15B	4.74B	2.89B
Net Income	786.00M	1.64B	2.38B	2.05B	986.00M
Balance Sheet
Total Assets	38.47B	39.00B	36.19B	34.86B	31.38B
Cash, Cash Equivalents and Short-Term Investments	2.26B	2.72B	3.63B	4.07B	3.52B
Total Debt	16.56B	16.85B	16.97B	17.33B	15.67B
Total Liabilities	20.86B	21.57B	20.92B	21.64B	19.30B
Stockholders Equity	17.61B	17.43B	15.26B	13.22B	12.08B
Cash Flow
Free Cash Flow	1.65B	872.00M	980.00M	1.63B	1.47B
Operating Cash Flow	2.98B	3.64B	2.93B	2.17B	2.08B
Investing Cash Flow	-2.02B	-2.87B	-2.03B	425.00M	-957.00M
Financing Cash Flow	-1.40B	-1.49B	-1.39B	-2.11B	-754.00M

Ultrafabrics Holdings Co.,Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 763.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4235, the sentiment is Negative. The current price of 763 is above the 20-day moving average (MA) of 686.90, above the 50-day MA of 720.20, and above the 200-day MA of 704.33, indicating a bearish trend. The MACD of -14.99 indicates Negative momentum. The RSI at 39.99 is Neutral, neither overbought nor oversold. The STOCH value of 49.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4235.

Ultrafabrics Holdings Co.,Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7887	76 Outperform	¥10.63B	3.04	―	1.66%	8.56%	2690.35%
8130	76 Outperform	¥181.90B	11.81	―	4.91%	6.35%	14.05%
7840	75 Outperform	¥44.92B	13.60	―	2.97%	0.89%	-14.25%
7972	67 Neutral	¥174.39B	12.83	―	2.20%	7.63%	29.07%
7898	66 Neutral	¥9.51B	3.19	―	2.65%	1.11%	―
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
4235	60 Neutral	¥11.06B	14.52	―	5.16%	-1.44%	-43.25%

Ultrafabrics Holdings Co.,Ltd. Corporate Events

Ultrafabrics Sets New Rolling Three-Year Plan After FY2025 Headwinds

Ultrafabrics Holdings has adopted a new rolling three-year Medium-Term Management Plan covering fiscal years 2026 to 2028, recalibrating its strategy after FY2025 results were pressured by economic uncertainty, additional tariffs, persistently high interest rates, inflation concerns, and intensifying competition and slowdown in the EV sector. The plan, which targets FY2028 sales revenue of ¥27.4 billion, operating profit of ¥3.5 billion, and EBITDA of ¥5.3 billion, focuses on diversifying and expanding the sales base, strengthening product development capabilities, restoring profitability, and advancing sustainability initiatives, signaling a push to improve resilience and enhance its competitive position amid a volatile operating environment.

By rolling its three-year targets annually, the company aims to respond more swiftly to market shifts and macroeconomic headwinds while reassuring investors and stakeholders that performance shortfalls in FY2025 have been incorporated into a refreshed roadmap. The emphasis on profitability recovery and sustainability, alongside diversification, suggests a strategic effort to reduce dependence on vulnerable segments such as EV-related demand and to stabilize earnings over the medium term, potentially supporting a more balanced growth profile.

The most recent analyst rating on (JP:4235) stock is a Hold with a Yen782.00 price target. To see the full list of analyst forecasts on Ultrafabrics Holdings Co.,Ltd. stock, see the JP:4235 Stock Forecast page.

Ultrafabrics Beats 2025 Profit Forecasts but Trims Dividends Amid Ongoing Earnings Pressure

Ultrafabrics reported full-year 2025 sales of ¥20.55 billion, slightly below its forecast, but operating income and net profit significantly beat estimates thanks to a weaker yen and lower-than-expected losses at an equity-method joint venture. Despite these earnings outperformance factors, results remained well below the prior year, underscoring ongoing profit pressure even as foreign exchange gains and cost controls provided a temporary boost.

The company announced a year-end dividend cut, setting common share payouts at ¥35 versus the previously forecast ¥39 and reducing Type A preferred dividends accordingly, funded from retained earnings. This more conservative distribution signals a preference to preserve internal reserves for future expansion and balance-sheet strength, which may temper short-term investor income expectations but supports longer-term financial resilience.

The most recent analyst rating on (JP:4235) stock is a Hold with a Yen782.00 price target. To see the full list of analyst forecasts on Ultrafabrics Holdings Co.,Ltd. stock, see the JP:4235 Stock Forecast page.

Ultrafabrics Holdings Sees Profit Slump Despite Modest Sales Growth in FY2025

Ultrafabrics Holdings reported consolidated sales of ¥20.55 billion for the year ended December 2025, a modest 1.3% increase from the previous year, but profitability deteriorated sharply as operating profit fell 42.1% to ¥1.62 billion and net profit dropped 52.1% to ¥786 million. Margins weakened notably, with the operating margin sliding from 13.8% to 7.9%, even as the company maintained a solid financial base, keeping total assets broadly flat at around ¥38.5 billion and slightly improving its equity ratio to 45.8%, signaling resilience in its balance sheet despite earnings pressure.

Basic earnings per share declined from ¥88.95 to ¥42.23, underscoring the impact of lower profits on shareholder returns, while total comprehensive income plunged 75.1%, suggesting additional hits from non-operating or valuation factors. Cash flow from operating activities eased to ¥2.98 billion but remained positive and sufficient to fund continued investment outflows, as the company sustained capital spending and reduced financing cash outflows, indicating a cautious yet ongoing commitment to investment amid a tougher profit environment.

The most recent analyst rating on (JP:4235) stock is a Hold with a Yen782.00 price target. To see the full list of analyst forecasts on Ultrafabrics Holdings Co.,Ltd. stock, see the JP:4235 Stock Forecast page.