Kurogane Kosakusho Ltd. (7997) AI Stock Analysis

• Market Cap: ¥1.61B
• Dividend Yield: 2.23%
• Average Volume (3M): 22.99K
• Price to Earnings (P/E): 4.0
• Beta (1Y): 0.56
• Revenue Growth: -9.48%
• EPS Growth: -66.01%
• Country: JP
• Employees: 254
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Furnishings, Fixtures & Appliances
• EPS (TTM): 133.75
• Shares Outstanding: 1,857,113
• 10 Day Avg. Volume: 16,990
• 30 Day Avg. Volume: 22,990
• PEG Ratio: 0.04
• Price to Book (P/B): 0.34
• Price to Sales (P/S): 0.26
• P/FCF Ratio: 54.76
• 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: 68 Neutral
• Price Target: ¥1,026.00 ▲(8.57% Upside)

The score is primarily supported by very attractive valuation (low P/E and solid dividend yield). Financial performance is improving but remains mixed due to contracting revenue, negative EBIT in recent years, and weak/volatile cash conversion. Technical signals are neutral to slightly positive, adding limited support.

Positive Factors

Conservative leverage

A low debt-to-equity (~0.19) provides durable balance-sheet resilience for a cyclical machinery manufacturer. This reduces interest burden, preserves borrowing capacity for capex or downturns, and supports longer-term investment and operational continuity.

Return to profitability

Net income turning positive with a ~6.4% margin shows meaningful operating recovery versus prior loss years. Sustained profitability improves reinvestment potential, supports dividend capacity and equity rebuilding, and signals operational fixes that can endure if trends hold.

Diversified revenue streams

Revenue from new machines, aftermarket parts, service contracts and international sales creates recurring, less-cyclical cash sources. Long-term service contracts and partnerships diversify demand across automotive, aerospace and electronics, supporting steadier revenue over cycles.

Negative Factors

Weak cash conversion

Very low operating cash flow relative to earnings (~0.04) and prior negative free cash flow indicate poor cash conversion. Persistent working-capital swings and uneven cash generation can limit capex funding, constrain dividends and reduce financial flexibility over time.

Top-line weakness

Declining revenue and negative multi-year growth weaken scale in a machinery business where fixed costs are meaningful. Continued top-line erosion pressures margin sustainability, hampers capacity utilization and limits the firm's ability to leverage recent profitability into durable growth.

Inconsistent operating results

Negative EBIT in recent years and a history of much higher leverage point to volatile operating performance. This inconsistency raises questions about earnings quality, operational resilience and the company's ability to withstand future demand shocks without returning to stressed balance-sheet settings.

Kurogane Kosakusho Ltd. Business Overview & Revenue Model

Company Description

Kurogane Kosakusho Ltd. manufactures and sells furniture in Japan. The company offers air conditioning and clean-room-related equipment. It is also involved in manufacturing interiors and construction-related equipment. Kurogane Kosakusho Ltd. was founded in 1927 and is headquartered in Osaka, Japan.

How the Company Makes Money

Kurogane Kosakusho generates revenue through the sale of its precision machinery and tools to various sectors, with a significant portion of its income derived from both domestic and international markets. The company’s revenue model is primarily based on direct sales to industrial clients, as well as long-term contracts for maintenance and support services. Key revenue streams include new machine sales, aftermarket parts, and service contracts. Additionally, Kurogane Kosakusho has established partnerships with other manufacturing firms and technology providers, enhancing its product offerings and market reach. These collaborations not only bolster its revenue but also contribute to the company's reputation for quality and innovation in the machinery sector.

Kurogane Kosakusho Ltd. Financial Statement Overview

Summary

Profitability has improved with net income turning positive and net margin rising to ~6.4% in 2025, and the balance sheet is currently conservative (debt-to-equity ~0.19). Offsetting this, revenue declined ~4.8% YoY, EBIT was negative in 2024–2025, and cash-flow quality is weak/volatile with low cash conversion (operating cash flow to net income ~0.04).

Income Statement

Profitability has improved meaningfully versus earlier loss years: net income turned positive and rose from 2024 to 2025, with net margin improving to ~6.4% in 2025 (from ~2.9% in 2024). Gross margin also strengthened versus 2023–2024 levels. However, top-line momentum is weak (2025 revenue down ~4.8% year over year), and operating performance looks inconsistent (EBIT was negative in 2024–2025), suggesting earnings quality and operating leverage remain a concern despite positive bottom-line results.

Balance Sheet

Leverage appears conservative in the most recent years, with debt-to-equity around ~0.19 in 2024–2025 and equity building over time, supporting balance-sheet resilience. Returns on equity improved from 2024 to 2025 (~4.6% to ~8.3%), indicating better profitability on the capital base. The main weakness is historical volatility: leverage was much higher in 2020–2022 (debt-to-equity ~1.0), and returns were negative in those periods, showing the balance sheet has been through stress before even if it is currently healthier.

Cash Flow

Cash generation is uneven. 2025 returned to positive operating cash flow and free cash flow, but operating cash flow is small relative to reported earnings (operating cash flow to net income ~0.04), implying limited cash conversion. Prior years were volatile, including negative operating cash flow and deeply negative free cash flow in 2023–2024, which raises questions about working-capital swings and the durability of the recent improvement.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	6.66B	6.34B	7.20B	7.18B	6.92B	8.37B
Gross Profit	1.49B	1.47B	1.55B	1.45B	1.38B	1.68B
EBITDA	334.94M	722.04M	393.97M	1.51B	-337.08M	280.31M
Net Income	153.95M	403.10M	209.38M	1.21B	-566.03M	-5.37M
Balance Sheet
Total Assets	8.30B	8.55B	8.06B	8.20B	8.52B	9.64B
Cash, Cash Equivalents and Short-Term Investments	1.00B	1.53B	907.86M	1.32B	658.82M	775.12M
Total Debt	886.64M	939.25M	883.32M	931.73M	2.86B	3.43B
Total Liabilities	3.67B	3.70B	3.48B	3.92B	5.60B	6.25B
Stockholders Equity	4.62B	4.85B	4.58B	4.27B	2.91B	3.37B
Cash Flow
Free Cash Flow	0.00	29.66M	-710.24M	-445.98M	172.22M	233.90M
Operating Cash Flow	0.00	76.48M	-248.97M	-428.43M	181.12M	290.34M
Investing Cash Flow	0.00	208.10M	-81.60M	3.01B	238.81M	-26.69M
Financing Cash Flow	0.00	-16.09M	-61.98M	-2.03B	-591.22M	-118.44M

Kurogane Kosakusho Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 945.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7997, the sentiment is Positive. The current price of 945 is below the 20-day moving average (MA) of 949.65, below the 50-day MA of 948.00, and above the 200-day MA of 864.60, indicating a neutral trend. The MACD of 0.52 indicates Negative momentum. The RSI at 50.34 is Neutral, neither overbought nor oversold. The STOCH value of 24.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7997.

Kurogane Kosakusho Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7807	80 Outperform	¥4.20B	7.86	―	1.44%	0.65%	-39.91%
7887	76 Outperform	¥9.64B	6.54	―	1.66%	8.56%	2690.35%
7791	69 Neutral	¥3.53B	7.79	―	4.00%	11.73%	37.16%
7997	68 Neutral	¥1.61B	3.98	―	2.23%	-9.48%	-66.01%
7898	66 Neutral	¥9.22B	3.86	―	2.65%	1.11%	―
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7822	46 Neutral	¥10.39B	32.87	―	4.41%	2.78%	-88.37%