Kawai Musical Instruments Manufacturing Co., Ltd. (7952) AI Stock Analysis

• Market Cap: ¥22.82B
• Dividend Yield: 3.58%
• Average Volume (3M): 17.68K
• Price to Earnings (P/E): 56.4
• Beta (1Y): 0.64
• Revenue Growth: -9.07%
• EPS Growth: -85.45%
• Country: JP
• Employees: 2,895
• Sector: Consumer Cyclical
• Sector Strength: 60
• Industry: Leisure
• EPS (TTM): 66.82
• Shares Outstanding: 9,011,560
• 10 Day Avg. Volume: 22,470
• 30 Day Avg. Volume: 17,676
• PEG Ratio: -0.26
• Price to Book (P/B): 0.69
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -12.69
• 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

• Rating: 51 Neutral
• Price Target: ¥2,630.00 ▼(-0.94%Downside)

The company's financial challenges and high valuation negatively impact the stock score. While the balance sheet remains strong, declining revenues and profitability are concerning. Technical analysis suggests a bearish trend, and the high P/E ratio indicates overvaluation, which weighs heavily on the overall score.

Kawai Musical Instruments Manufacturing Co., Ltd. Business Overview & Revenue Model

Company Description

Kawai Musical Instruments Manufacturing Co., Ltd. (7952) is a renowned Japanese company specializing in the production and distribution of musical instruments. Established in 1927, Kawai is recognized globally for its high-quality pianos, digital pianos, and other electronic musical instruments. The company operates in the music industry, catering to both amateur and professional musicians worldwide. Kawai's commitment to innovation and craftsmanship has solidified its reputation as a leading manufacturer in the musical instruments sector.

How the Company Makes Money

Kawai Musical Instruments Manufacturing Co., Ltd. generates revenue primarily through the sale of its musical instruments, including grand pianos, upright pianos, digital pianos, and other electronic instruments. The company reaches its customers via a network of distributors and retailers across the globe, ensuring its products are available in major markets. Additionally, Kawai invests in research and development to enhance its product offerings and maintain its competitive edge. Partnerships with music education institutions and artists also contribute to brand recognition and sales, supporting its revenue growth.

Kawai Musical Instruments Manufacturing Co., Ltd. Financial Statement Overview

Summary

Kawai Musical Instruments Manufacturing Co., Ltd. faces challenges in maintaining profitability amidst declining revenues, with a significant drop in net profit margin and negative operating cash flow. While the balance sheet remains robust with low leverage and a strong equity base, the company needs to address operational inefficiencies and cash flow constraints to improve its financial health.

Income Statement

The income statement shows a decline in total revenue over the past year, with the latest figure at ¥72.918 billion compared to ¥80.192 billion in the previous year, indicating a revenue decrease of approximately 9.06%. The gross profit margin remained relatively stable at around 25.1%, but the net profit margin significantly dropped from 3.47% to 0.56%, reflecting reduced profitability. EBIT and EBITDA margins also declined, illustrating decreased operational efficiency. The company faces challenges in maintaining profitability amidst declining revenues.

Balance Sheet

The balance sheet reveals a solid equity base, with the equity ratio improving to 60.2% from 58.4% last year, indicating financial stability. The debt-to-equity ratio is relatively low at 0.19, suggesting conservative leverage. However, the return on equity decreased to 0.91% from 6.48%, reflecting diminished profitability on shareholders' investments. Overall, the balance sheet remains strong but faces profitability challenges.

Cash Flow

The cash flow analysis highlights significant challenges, with operating cash flow turning negative at ¥-1.611 billion from a positive ¥1.442 billion, and free cash flow dropping to ¥-3.171 billion from ¥0.102 billion, reflecting cash flow constraints. The operating cash flow to net income ratio is negative, indicating difficulties in converting net income to cash. The free cash flow to net income ratio also turned negative, pointing to operational cash flow struggles and potential liquidity issues.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	74.71B	72.92B	80.19B	87.77B	85.70B	67.52B
Gross Profit	18.43B	18.30B	20.71B	22.82B	23.48B	18.10B
EBITDA	2.37B	2.28B	4.87B	6.71B	8.93B	4.82B
Net Income	495.00M	405.00M	2.78B	3.67B	5.05B	2.58B
Balance Sheet
Total Assets	70.07B	73.99B	73.54B	70.82B	68.39B	60.70B
Cash, Cash Equivalents and Short-Term Investments	13.36B	13.30B	18.23B	19.32B	22.66B	19.47B
Total Debt	8.08B	8.45B	8.12B	8.93B	10.29B	11.44B
Total Liabilities	27.93B	29.45B	30.40B	32.36B	34.84B	32.77B
Stockholders Equity	42.14B	44.54B	42.93B	38.26B	33.38B	27.82B
Cash Flow
Free Cash Flow	0.00	-3.17B	102.00M	-2.06B	4.02B	4.08B
Operating Cash Flow	0.00	-1.61B	1.44B	-613.00M	5.08B	4.94B
Investing Cash Flow	0.00	-2.54B	-943.00M	-1.36B	-877.00M	-899.00M
Financing Cash Flow	0.00	-875.00M	-1.84B	-2.27B	-1.80B	4.80B

Kawai Musical Instruments Manufacturing Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2655.00
• 50DMA: Positive
• 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:7952, the sentiment is Positive. The current price of 2655 is above the 20-day moving average (MA) of 2615.30, above the 50-day MA of 2632.28, and below the 200-day MA of 2781.87, indicating a neutral trend. The MACD of -5.24 indicates Negative momentum. The RSI at 54.07 is Neutral, neither overbought nor oversold. The STOCH value of 41.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7952.

Kawai Musical Instruments Manufacturing Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7944	76 Outperform	¥80.80B	12.43		5.50%	-1.74%	-11.79%
7990	74 Outperform	¥49.67B	10.39		3.70%	-1.61%	-14.35%
7951	72 Outperform	$491.68B	36.82	2.69%	2.56%	-0.17%	-54.29%
7906	68 Neutral	$257.32B	24.10	16.08%	0.07%	18.75%	20.42%
Sector *	67 Neutral	¥253.34B	13.18	6.44%	2.78%	5.06%	-11.83%
7952	51 Neutral	¥22.82B	56.37		3.58%	-9.07%	-85.45%

Kawai Musical Instruments Manufacturing Co., Ltd. Corporate Events

Kawai Musical Instruments Corrects Financial Results for FY 2025

Kawai Musical Instruments Manufacturing Co., Ltd. has announced corrections to its consolidated financial results for the fiscal year ending March 31, 2025. The corrections address errors in the classification of activities in the consolidated statement of cash flows, impacting the reported figures for cash flows from investing and financing activities.

Kawai Musical Instruments Focuses on Capital and Stock Price Management

Kawai Musical Instruments Manufacturing Co., Ltd. has announced a strategic initiative to enhance management practices by focusing on the cost of capital and stock price. This move is expected to improve the company’s financial performance and strengthen its market position, benefiting shareholders and stakeholders.

Kawai Musical Instruments Faces Financial Decline but Forecasts Recovery

Kawai Musical Instruments reported a significant decline in its financial performance for the fiscal year ended March 31, 2025, with net sales decreasing by 9.1% and operating profit plummeting by 90.3% compared to the previous year. Despite these challenges, the company forecasts a recovery for the next fiscal year, expecting a 4.2% increase in net sales and a substantial rebound in operating profit by 374.6%, indicating a positive outlook for stakeholders.

Kawai Musical Instruments Reports Better-Than-Expected Profits for FY 2025

Kawai Musical Instruments Manufacturing Co., Ltd. announced a discrepancy between its financial forecast and actual results for the fiscal year ended March 31, 2025. While net sales were slightly below expectations, profit levels exceeded forecasts due to reduced selling, general, and administrative expenses, resulting in a positive impact on the company’s financial performance.