Kawase Computer Supplies Co., Ltd. (7851) AI Stock Analysis

• Market Cap: ¥1.05B
• Dividend Yield: 2.07%
• Average Volume (3M): 6.66K
• Price to Earnings (P/E): 109.0
• Beta (1Y): 0.63
• Revenue Growth: 7.89%
• EPS Growth: N/A
• Country: JP
• Employees: 98
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): 0.53
• Shares Outstanding: 5,160,000
• 10 Day Avg. Volume: 10,560
• 30 Day Avg. Volume: 6,660
• PEG Ratio: -0.06
• Price to Book (P/B): 0.46
• Price to Sales (P/S): 0.39
• P/FCF Ratio: 10.52
• 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: 67 Neutral
• Price Target: ¥238.00 ▼(-3.25% Downside)
• Action: Reiterated Date: 10/29/25
• Date: Action: Reiterated 10/29/25

The overall stock score of 66.5 reflects a strong financial performance with a solid recovery in profitability and stable balance sheet metrics. However, technical indicators suggest a bearish trend, which tempers the positive financial outlook. The valuation is reasonable, providing a balanced view of the stock's potential.

Positive Factors

Strong balance sheet

A low debt-to-equity ratio (0.25) and high equity ratio (69.84%) provide durable financial flexibility, reducing refinancing and solvency risk. This capital structure supports investment and weathering cycles, enabling sustainable operations and strategic choices without heavy leverage constraints.

Improved cash generation

A large free cash flow increase (87.41% y/y) and operating cash flow exceeding net income (OCF/NI 1.21) indicate stronger cash conversion. Persistent cash generation underpins reinvestment, dividends or debt reduction, and makes capital allocation more reliable over the medium term.

Return to profitability and revenue growth

Rebounding revenue (+9.16%) with gross margin at 25.85% and a return to net profitability (3.54%) reflects operational recovery and pricing or cost discipline. If sustained, this supports incremental margin expansion and stable earnings that underpin long-term cash flow expectations.

Negative Factors

Low absolute net margin

A net margin of 3.54% remains slim, leaving limited buffer versus input cost inflation or demand softness. Low absolute profitability constrains internal reinvestment capacity and makes earnings more sensitive to small revenue or cost swings, challenging durable earnings growth.

Modest return on equity

ROE at 4.19% signals modest returns on shareholder capital despite improved profitability. Over the medium term this may limit the company's ability to generate high shareholder returns or attract capital compared with higher-return peers, constraining strategic investment scope.

Historical volatility in profits and cash flows

Management has evidenced swings in profitability and cash flow historically, increasing execution risk. Recurring volatility undermines predictability of free cash flow, complicates planning for capex/dividends, and raises the bar for sustained improvement to be deemed structural.

Kawase Computer Supplies Co., Ltd. Business Overview & Revenue Model

Company Description

Kawase Computer Supplies Co., Ltd. (7851) is a prominent player in the technology sector, specializing in the manufacturing and distribution of computer peripherals and supplies. The company offers a wide range of products, including printers, ink cartridges, and other essential accessories that cater to both individual consumers and businesses. With a focus on innovation and quality, Kawase aims to enhance the productivity and efficiency of its clients through reliable technological solutions.

How the Company Makes Money

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Kawase Computer Supplies Co., Ltd. Financial Statement Overview

Summary

Kawase Computer Supplies Co., Ltd. demonstrates a strong financial recovery with improved profitability, stable balance sheet metrics, and enhanced cash flow generation. The company's return to profitability and revenue growth are positive indicators, while low leverage and strong equity position provide financial stability. However, past volatility in profitability and cash flows should be considered as potential risks.

Income Statement

Kawase Computer Supplies Co., Ltd. has shown a strong recovery in its income statement metrics over the past year. The gross profit margin for 2025 was 25.85%, indicating efficient cost management. The net profit margin improved significantly to 3.54% from negative figures in previous years, reflecting a return to profitability. Revenue growth rate was 9.16% from 2024 to 2025, indicating a positive growth trajectory. EBIT and EBITDA margins also improved to 2.79% and 7.77%, respectively, showing enhanced operational efficiency. However, the company has experienced volatility in profitability in prior years, which could pose a risk.

Balance Sheet

The balance sheet of Kawase Computer Supplies Co., Ltd. is robust, with a debt-to-equity ratio of 0.25, indicating low leverage and financial stability. The return on equity (ROE) for 2025 was 4.19%, a significant improvement from previous years, suggesting effective use of equity to generate profits. The equity ratio stands at 69.84%, highlighting a strong equity base relative to total assets. These metrics suggest a solid financial position, although past fluctuations in equity and liabilities warrant cautious optimism.

Cash Flow

The cash flow statement reflects a positive trend with a free cash flow growth rate of 87.41% from 2024 to 2025, indicating improved cash generation capabilities. The operating cash flow to net income ratio is 1.21, suggesting strong cash flow relative to net income. The free cash flow to net income ratio is 1.05, further supporting the company's ability to generate cash. Despite these strengths, historical volatility in cash flows and capital expenditures should be monitored.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	2.88B	2.83B	2.59B	2.50B	2.50B	2.63B
Gross Profit	734.71M	732.05M	629.33M	652.29M	740.14M	743.95M
EBITDA	207.53M	219.99M	31.16M	-22.58M	64.06M	144.58M
Net Income	88.31M	100.11M	-112.97M	-136.91M	4.27M	93.92M
Balance Sheet
Total Assets	3.47B	3.42B	3.45B	3.72B	3.50B	3.62B
Cash, Cash Equivalents and Short-Term Investments	1.10B	1.11B	1.15B	1.51B	1.84B	1.92B
Total Debt	527.85M	606.81M	719.23M	816.07M	490.17M	616.99M
Total Liabilities	1.06B	1.03B	1.16B	1.33B	952.05M	1.06B
Stockholders Equity	2.41B	2.39B	2.29B	2.39B	2.55B	2.56B
Cash Flow
Free Cash Flow	0.00	104.72M	55.90M	-308.37M	62.78M	89.10M
Operating Cash Flow	0.00	120.89M	166.22M	-22.90M	101.41M	165.51M
Investing Cash Flow	0.00	-28.56M	-385.18M	-231.04M	-87.37M	41.66M
Financing Cash Flow	0.00	-129.77M	-134.46M	-41.00M	-140.96M	65.71M

Kawase Computer Supplies Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 246.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7851, the sentiment is Negative. The current price of 246 is above the 20-day moving average (MA) of 234.00, below the 50-day MA of 249.22, and below the 200-day MA of 252.37, indicating a bearish trend. The MACD of -8.18 indicates Positive momentum. The RSI at 31.03 is Neutral, neither overbought nor oversold. The STOCH value of 30.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7851.

Kawase Computer Supplies Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7805	77 Outperform	¥3.54B	4.67	―	1.93%	-1.00%	105.56%
7793	76 Outperform	¥4.57B	10.64	―	2.05%	―	―
7851	67 Neutral	¥1.05B	109.03	―	2.07%	7.89%	―
7919	66 Neutral	¥3.62B	6.84	―	3.69%	0.62%	-24.08%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7916	61 Neutral	¥5.59B	-22.35	―	2.72%	-1.30%	―
3948	53 Neutral	¥6.76B	45.76	―	2.94%	-2.81%	57.37%