Kyowa Leather Cloth Co., Ltd. (3553) AI Stock Analysis

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Kyowa Leather Cloth Co., Ltd.

(TSE/TYO:3553)

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Rating:53Neutral

Price Target:JPY 888.00▲(0.34% Upside)

Action:reiterated

Date:11/12/26

The overall score is heavily weighed down by severe fundamental deterioration, particularly collapsing profit margins and aggressive cash burn, outweighing the safety of a virtually debt-free balance sheet. While an attractive dividend yield of nearly 6% provides a bright spot for income-focused investors, the elevated P/E ratio and mixed-to-bearish long-term technical indicators suggest significant caution is warranted until core operational inefficiencies are resolved.

Positive Factors

Conservative Balance SheetVery low leverage and a substantial equity base provide financial resilience and flexibility. This structure can help Kyowa withstand operating volatility, support continued investment in its materials business, and reduce dependence on external financing over the next several quarters.

Negative Factors

Operating Margin CompressionThe sharp decline in operating margin indicates that recent revenue is converting into substantially less operating profit. Unless profitability recovers, the weaker earnings base could limit reinvestment, reduce returns on capital, and leave the business more sensitive to cost or demand changes.

Kyowa Leather Cloth Co., Ltd. (3553) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 21.09B
Dividend Yield: 5.88%
Average Volume (3M): 35.38K
Price to Earnings (P/E): 23.2
Beta (1Y): 0.85
Revenue Growth: 4.28%
EPS Growth: 67.90%
Country: Japan
Employees: 1,393
Sector: General
Sector Strength: 55
Industry: Chemicals

Kyowa Leather Cloth Co., Ltd. Business Overview & Revenue Model

Company Description

Established in 1935 and headquartered in Hamamatsu, Japan, Kyowa Leather Cloth Co., Ltd. operates as a global enterprise focused on the manufacturing, processing, and distribution of a wide array of synthetic resin products. The company's offerings f...

Kyowa Leather Cloth Co., Ltd. Financial Statement Overview

Summary

Despite a pristine, virtually debt-free balance sheet that removes immediate solvency risks, financial performance is dragged down by severe operational degradation. Collapsing profit margins (net margin at 1.17%), plummeting net income, and a severe free cash flow burn of 4.1 billion highlight critical inefficiencies.

Income Statement

35Negative

Balance Sheet

78Positive

Cash Flow

25Negative

Financial statement breakdown
Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	58.28B	55.82B	56.40B	52.04B	45.79B	47.07B
Gross Profit	9.44B	8.89B	9.80B	9.72B	7.09B	8.31B
EBITDA	2.90B	3.63B	4.67B	5.17B	2.79B	4.33B
Net Income	910.00M	655.00M	1.10B	1.96B	348.00M	1.68B
Balance Sheet
Total Assets	56.43B	57.46B	60.50B	61.84B	53.58B	54.92B
Cash, Cash Equivalents and Short-Term Investments	7.03B	8.14B	11.13B	14.77B	10.71B	10.58B
Total Debt	1.16B	983.00M	595.00M	358.00M	456.00M	544.00M
Total Liabilities	19.04B	19.82B	23.09B	24.27B	19.05B	20.24B
Stockholders Equity	36.33B	36.57B	36.23B	36.33B	33.49B	33.79B
Cash Flow
Free Cash Flow	0	-4.11B	-2.44B	4.52B	248.00M	476.00M
Operating Cash Flow	0	799.00M	1.33B	7.11B	2.96B	2.97B
Investing Cash Flow	0	-3.23B	-4.49B	-1.92B	-1.94B	-2.75B
Financing Cash Flow	0	-661.00M	-1.29B	-587.00M	-703.00M	-1.42B

Kyowa Leather Cloth Co., Ltd. Technical Analysis

Technical Analysis SentimentPositive

Last Price885.00

Price Trends

50DMA882.90Positive

100DMA874.74Positive

200DMA913.55Negative

Market Momentum

MACD-2.36Negative

RSI56.44Neutral

STOCH93.92Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3553, the sentiment is Positive. The current price of 885.00 is above the 20-day moving average (MA) of 869.45, above the 50-day MA of 882.90, and below the 200-day MA of 913.55, indicating a neutral trend. The MACD of -2.36 indicates Negative momentum. The RSI at 56.44 is Neutral, neither overbought nor oversold. The STOCH value of 93.92 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3553.

Kyowa Leather Cloth Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

JP:3553 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:5013	84Outperform	JPY 41.31B	8.94	―	3.82%	-0.92%	0.66%
JP:4189	76Outperform	JPY 124.10B	12.21	―	3.26%	-6.23%	8.54%
JP:4045	69Neutral	JPY 191.69B	14.05	6.32%	3.80%	2.33%	50.31%
JP:5142	66Neutral	JPY 31.88B	7.86	―	1.98%	8.06%	1948.66%
JP:4970	61Neutral	JPY 60.32B	12.66	―	0.67%	20.83%	89.46%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
JP:3553	53Neutral	JPY 21.61B	23.17	―	5.88%	4.28%	67.90%

* General Sector Average

Performance Comparison

JP:3553 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:3553	Kyowa Leather Cloth Co., Ltd.	885.00	55.17	6.65%
JP:4045	Toagosei Co	1803.50	306.54	20.48%
JP:4189	KH Neochem Co.,Ltd.	3300.00	1002.76	43.65%
JP:4970	Toyo Gosei Co., Ltd.	7430.00	770.42	11.57%
JP:5013	Yushiro Chemical Industry Co., Ltd.	3195.00	1014.39	46.52%
JP:5142	Achilles Corporation	2023.00	787.61	63.75%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Date of analysis: Nov 12, 2026

Kyowa Leather Cloth Co., Ltd. AI Stock Analysis