Kawakami Paint Manufacturing Co., Ltd. (4616) AI Stock Analysis

• Market Cap: ¥1.94B
• Dividend Yield: 2.34%
• Average Volume (3M): 4.57K
• Price to Earnings (P/E): 26.9
• Beta (1Y): 0.35
• Revenue Growth: -2.27%
• EPS Growth: -12.76%
• Country: JP
• Employees: 137
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 53.59
• Shares Outstanding: 1,000,000
• 10 Day Avg. Volume: 2,230
• 30 Day Avg. Volume: 4,570
• PEG Ratio: -0.51
• Price to Book (P/B): 0.63
• Price to Sales (P/S): 0.35
• P/FCF Ratio: 272.80
• 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: 51 Neutral
• Price Target: ¥2,008.00 ▼(-3.60% Downside)

The score is constrained mainly by weakening profitability and especially weak/volatile free cash flow, despite an improving and moderately leveraged balance sheet. Technical indicators are broadly neutral with only modest positive momentum. Valuation appears relatively high given the recent margin and cash-conversion pressures.

Positive Factors

Diverse product portfolio

A broad portfolio across architectural, automotive and industrial coatings reduces reliance on any single end market and supports more stable demand over cycles. Combined with R&D and customized solutions, this fosters durable customer relationships and pricing premium potential.

Improving leverage

Progressively lower leverage strengthens the balance sheet and reduces financial risk, increasing capacity for capex or working-capital needs. A healthier capital structure enhances resilience to downturns and supports longer-term strategic investment without excessive refinancing pressure.

Consistent operating cash flow

Sustained positive operating cash flow indicates the core coatings business generates cash from operations, underpinning day-to-day liquidity and debt servicing. Over months, this provides a base to fund investment or stabilize operations even if free cash flow is volatile.

Negative Factors

Volatile, weak free cash flow

Recurrent negative or near-zero free cash flow reduces the company’s ability to self-fund growth, pay dividends, or buy back shares. Over the medium term this creates dependence on external financing and raises vulnerability to working-capital swings or capex timing mismatches.

Margin compression

Material decline in gross, operating and net margins suggests persistent cost or pricing pressures that erode profitability. If sustained, lower margins impair cash generation, limit reinvestment in R&D and product development, and weaken competitive positioning long-term.

Low return on equity

A declining and very low ROE signals limited value creation on shareholder capital and may reflect weak pricing power or operational inefficiency. Over months, persistently low ROE can constrain investor support and restrict access to cost-effective capital for strategic initiatives.

Kawakami Paint Manufacturing Co., Ltd. Business Overview & Revenue Model

Company Description

Kawakami Paint Manufacturing Co., Ltd. (4616) is a prominent player in the coatings industry, specializing in the production of high-quality paints and coatings for various applications. The company operates primarily in the manufacturing sector, delivering innovative products that cater to both industrial and consumer markets. Kawakami Paint offers a diverse range of coatings, including architectural paints, automotive coatings, and industrial finishes, which are known for their durability and performance.

How the Company Makes Money

Kawakami Paint Manufacturing Co., Ltd. generates revenue through the sale of its paint and coating products across multiple sectors. The primary revenue streams include direct sales to distributors, retailers, and large industrial clients. The company capitalizes on its reputation for high-quality products, which allows it to command premium pricing in the market. Additionally, Kawakami Paint often engages in partnerships with construction companies and automotive manufacturers, providing customized coatings tailored to specific needs. These strategic alliances not only enhance sales volumes but also foster long-term contracts that contribute to stable revenue growth. The company also invests in research and development to innovate and improve its product offerings, ensuring it meets market demands and remains competitive, thus driving further profitability.

Kawakami Paint Manufacturing Co., Ltd. Financial Statement Overview

Summary

Revenue has been roughly flat, but profitability deteriorated in the latest year (material net and EBIT margin compression) and ROE fell. The biggest concern is weak and volatile free cash flow, including negative FCF in 2023–2024 and near-breakeven in 2025, despite consistently positive operating cash flow.

Income Statement

Revenue has been broadly flat over the last several years (2025 up ~2.3% after a slight decline in 2024), but profitability has weakened meaningfully. 2025 net margin fell to ~1.2% from ~2.9% in 2024 and ~3.3% in 2023, and operating profitability also compressed (EBIT margin ~1.9% vs ~4.2% in 2024). Gross margin has trended lower versus 2021–2022 levels, suggesting cost pressure and/or weaker pricing power. Positives include a recovery from the 2020 loss and generally positive earnings since, but the recent step-down in margins is a clear concern.

Balance Sheet

Leverage is moderate and improving: debt-to-equity has moved down from ~0.84 (2020) to ~0.57 (2025), while equity has steadily increased. Total assets have also grown over the period, indicating balance sheet expansion without a proportional increase in leverage. The key weakness is profitability on equity: return on equity fell to ~2.2% in 2025 from ~5.3% in 2024 and ~6.6% in 2023, which limits the balance sheet’s value creation despite healthier capital structure.

Cash Flow

Cash generation looks inconsistent and recently weak. Operating cash flow improved in 2025 versus 2024, but free cash flow in 2025 was close to breakeven (~¥7.7m) and was negative in both 2023 and 2024. Free cash flow relative to net income is very low in 2025 (~2.7%), indicating limited cash conversion, and 2024’s negative free cash flow despite positive earnings highlights volatility and potential working-capital or capital spending drag. The main positive is that operating cash flow has remained positive across the period shown.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	5.80B	5.93B	5.91B	6.14B	5.63B	5.31B
Gross Profit	952.71M	1.01B	1.05B	1.10B	1.08B	1.03B
EBITDA	294.33M	270.58M	375.25M	362.13M	343.99M	359.22M
Net Income	100.34M	72.32M	170.58M	203.00M	162.21M	146.16M
Balance Sheet
Total Assets	8.46B	8.67B	8.46B	8.34B	8.00B	7.65B
Cash, Cash Equivalents and Short-Term Investments	2.16B	1.89B	1.91B	1.90B	2.04B	2.02B
Total Debt	2.12B	1.91B	1.91B	1.86B	1.89B	1.99B
Total Liabilities	5.31B	5.34B	5.24B	5.29B	5.28B	5.12B
Stockholders Equity	3.16B	3.33B	3.22B	3.06B	2.72B	2.53B
Cash Flow
Free Cash Flow	0.00	7.72M	-125.60M	-78.87M	139.36M	402.16M
Operating Cash Flow	0.00	283.93M	139.53M	165.67M	206.13M	447.29M
Investing Cash Flow	0.00	-277.39M	-148.76M	-242.76M	-66.87M	-45.54M
Financing Cash Flow	0.00	-33.01M	20.49M	-62.70M	-121.80M	-44.91M

Kawakami Paint Manufacturing Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2083.00
• 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:4616, the sentiment is Neutral. The current price of 2083 is above the 20-day moving average (MA) of 1981.85, above the 50-day MA of 1988.44, and above the 200-day MA of 1886.45, indicating a neutral trend. The MACD of -1.59 indicates Positive momentum. The RSI at 46.11 is Neutral, neither overbought nor oversold. The STOCH value of 18.79 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4616.

Kawakami Paint Manufacturing Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4625	78 Outperform	¥3.85B	10.68	―	2.27%	1.79%	31.63%
4628	74 Outperform	¥162.56B	12.60	6.87%	1.11%	2.88%	16.60%
4623	72 Outperform	¥6.56B	10.51	―	3.50%	-8.27%	-3.23%
4624	66 Neutral	¥5.63B	11.44	―	1.39%	2.67%	37.55%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
4616	51 Neutral	¥1.94B	26.87	―	2.34%	-2.27%	-12.76%
4615	44 Neutral	¥4.32B	-22.10	―	―	8.66%	-239.07%