Kyushu Leasing Service Co., Ltd. (8596) AI Stock Analysis

• Market Cap: ¥34.50B
• Dividend Yield: 4.66%
• Average Volume (3M): 33.14K
• Price to Earnings (P/E): 9.5
• Beta (1Y): 0.97
• Revenue Growth: -13.01%
• EPS Growth: 9.74%
• Country: JP
• Employees: 129
• Sector: Industrials
• Sector Strength: 72
• Industry: Rental & Leasing Services
• EPS (TTM): 41.07
• Shares Outstanding: 25,952,374
• 10 Day Avg. Volume: 31,100
• 30 Day Avg. Volume: 33,140
• PEG Ratio: 0.36
• Price to Book (P/B): 0.54
• Price to Sales (P/S): 0.58
• P/FCF Ratio: -6.85
• 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: ¥1,636.00 ▲(16.19% Upside)
• Action: Reiterated Date: 10/17/25
• Date: Action: Reiterated 10/17/25

Kyushu Leasing Service Co., Ltd. scores well due to strong revenue growth and profitability, coupled with an attractive valuation. However, high leverage and negative cash flows present significant risks. Technical indicators show mild bullish momentum, but potential bearish trends could emerge.

Positive Factors

Profitability Margins

Sustained gross margin of 22.5% and net margin of 9.1% indicate the core leasing business converts revenue to profit efficiently. Stable EBIT/EBITDA margins (14.4%/17.3%) support durable profitability and cushion earnings through industry cycles, underpinning long-term cash generation potential.

Revenue Growth Momentum

A 17.4% revenue jump reflects expanding lease volumes or pricing power. Given the company’s business model—recurring lease-related income, financing interest and service fees—revenue growth is likely to translate into predictable, repeatable cash inflows and stronger contract visibility over the medium term.

Improving Capital Efficiency

An improved ROE (8.4%) alongside rising stockholders' equity suggests management is deploying capital more effectively. Better return on equity signals improved asset utilization in leasing operations and supports sustainable shareholder returns if the company maintains disciplined underwriting and asset management.

Negative Factors

High Leverage

A debt-to-equity ratio of 3.30 denotes material financial leverage. For a leasing firm that funds assets and receivables, high leverage raises funding cost sensitivity and refinancing risk. In a rising-rate or stressed environment, interest burden could compress margins and limit strategic flexibility.

Weak Cash Flow Generation

Negative operating cash flow despite reported profitability indicates timing or working capital strains in converting lease revenue to cash. Persistent negative free cash flow can force reliance on external financing to fund new leases and liabilities, increasing liquidity and refinancing risk over the medium term.

Regional Concentration Risk

Concentration of clients and operations in Kyushu limits geographic diversification versus national peers. Regional exposure can amplify credit, economic and sector shocks locally, making revenue and asset performance more sensitive to region-specific downturns or regulatory changes over the next several quarters.

Kyushu Leasing Service Co., Ltd. Business Overview & Revenue Model

Company Description

Kyushu Leasing Service Co., Ltd. operates as a financial services company in Japan. It is involved in the leasing and installment sale of machinery and equipment; and provision of corporate loans and project loans, as well as real estate services, including investment and liquidation, real estate mortgage loans, real estate rental and sale, and real estate project loans. The company also provides car leasing and life insurance services; and operates as a non-life insurance agency. In addition, it is involved in the activities, such as power sale, products sale, etc.; and building leasing, LED lighting rental, and roof-mounted solar businesses. The company was founded in 1974 and is headquartered in Fukuoka, Japan.

How the Company Makes Money

Kyushu Leasing Service generates revenue through multiple streams, primarily from leasing contracts in which it provides equipment, vehicles, and real estate to clients in exchange for regular lease payments. The company profits from the difference between the acquisition cost of the leased assets and the income generated from lease payments. Additionally, it may earn income from installment sales, where customers purchase equipment through financing options. Strategic partnerships with manufacturers and suppliers enhance its offerings, allowing for competitive lease terms and expanded market reach, contributing significantly to its overall earnings.

Kyushu Leasing Service Co., Ltd. Financial Statement Overview

Summary

Kyushu Leasing Service Co., Ltd. shows strong revenue growth and profitability improvements, with a robust gross profit margin of 22.5% and a net profit margin of 9.1%. However, high leverage with a debt-to-equity ratio of 3.30 and negative cash flows are significant concerns, indicating financial risks and liquidity issues.

Income Statement

Kyushu Leasing Service Co., Ltd. has demonstrated strong revenue growth with a 17.4% increase from 2024 to 2025, indicating a positive trajectory. The gross profit margin remained robust at 22.5%, while the net profit margin improved to 9.1%, highlighting enhanced profitability. EBIT and EBITDA margins were stable at 14.4% and 17.3%, respectively, showing efficient cost management. However, the decline in net income in 2023 suggests some volatility in earnings.

Balance Sheet

The company's debt-to-equity ratio of 3.30 indicates high leverage, which could pose financial risks. Return on equity improved to 8.4%, reflecting better utilization of shareholder funds. The equity ratio of 21% suggests moderate financial stability. The high level of total debt compared to equity is a potential concern, although the company has shown consistent growth in stockholders' equity.

Cash Flow

Kyushu Leasing Service Co., Ltd. faces challenges in cash flow management, with negative operating cash flow in 2025, though improved from 2024. The free cash flow remains negative, indicating potential liquidity issues. The operating cash flow to net income ratio is negative, suggesting cash flow struggles despite profitability. The company needs to enhance cash flow generation to support ongoing operations and growth.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	32.77B	39.34B	33.51B	36.80B	29.55B	28.26B
Gross Profit	8.59B	8.99B	8.01B	8.46B	5.97B	6.09B
EBITDA	7.47B	6.81B	5.79B	6.72B	4.39B	4.91B
Net Income	3.65B	3.57B	3.05B	5.86B	2.13B	1.86B
Balance Sheet
Total Assets	209.69B	201.93B	193.40B	175.51B	169.42B	148.52B
Cash, Cash Equivalents and Short-Term Investments	5.57B	4.91B	5.09B	6.09B	4.95B	4.72B
Total Debt	147.10B	140.28B	135.74B	119.57B	120.48B	100.04B
Total Liabilities	166.67B	159.30B	153.26B	137.63B	135.95B	116.49B
Stockholders Equity	42.87B	42.49B	39.78B	37.55B	33.34B	31.89B
Cash Flow
Free Cash Flow	0.00	-3.33B	-14.93B	-1.41B	-19.89B	-1.28B
Operating Cash Flow	0.00	-3.25B	-14.87B	-1.30B	-19.88B	-1.27B
Investing Cash Flow	0.00	-68.00M	-903.00M	3.62B	-81.00M	-2.00M
Financing Cash Flow	0.00	3.14B	14.73B	-1.16B	20.19B	665.00M

Kyushu Leasing Service Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1408.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:8596, the sentiment is Positive. The current price of 1408 is below the 20-day moving average (MA) of 1496.45, below the 50-day MA of 1452.24, and above the 200-day MA of 1322.66, indicating a bullish trend. The MACD of 19.37 indicates Positive momentum. The RSI at 60.36 is Neutral, neither overbought nor oversold. The STOCH value of 49.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:8596.

Kyushu Leasing Service Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7081	76 Outperform	¥15.27B	7.84	―	3.03%	5.72%	60.38%
9763	76 Outperform	¥16.66B	11.67	―	3.57%	6.66%	13.62%
8439	72 Outperform	¥1.12T	8.63	―	3.37%	5.24%	69.92%
8596	68 Neutral	¥34.50B	9.55	―	4.66%	-13.01%	9.74%
8424	64 Neutral	¥420.83B	15.12	―	3.62%	-0.03%	-42.34%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
5834	62 Neutral	¥51.86B	8.18	―	3.90%	0.17%	58.30%