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

Kyowa Leather Cloth Co., Ltd.

(TSE/TYO:3553)

Select Model

Rating:53Neutral

Price Target:JPY 940.00▲(9.18% Upside)

Action:reiterated

Date:08/11/26

The overall score of 53 reflects a fundamentally challenged business buoyed slightly by an attractive dividend yield and positive short-term technical momentum. While the pristine balance sheet mitigates immediate solvency risks, severe operational degradation and negative free cash flow are the most significant factors weighing down the score. The high dividend yield of 5.62% and recent bullish price action provide some upside, but the elevated P/E ratio demands caution until core profitability and cash generation improve.

Positive Factors

Conservative Balance SheetExtremely low leverage and a large equity base provide durable financial flexibility and downside protection. This capital structure supports sustained operations through industry cycles, funds selective investment or R&D, and reduces bankruptcy and refinancing risk over the medium term.

Negative Factors

Weak cash generationA sharp decline in operating cash flow and sustained negative free cash flow materially reduce internal funding for capex, dividends, and working-capital needs. Over months, this elevates the risk of external financing, curtails reinvestment capacity, and weakens resilience to demand shocks.

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

Market Cap: JPY 20.52B
Dividend Yield: 6.04%
Average Volume (3M): 33.15K
Price to Earnings (P/E): 28.1
Beta (1Y): 0.85
Revenue Growth: 0.96%
EPS Growth: -6.54%
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...

How the Company Makes Money

Kyowa Leather Cloth Co., Ltd. makes money primarily by selling manufactured synthetic leather (leather cloth/artificial leather) and related sheet-material products to business customers. Revenue is generated through (1) product sales to manufacturer...

Kyowa Leather Cloth Co., Ltd. Financial Statement Overview

Summary

While the balance sheet is an absolute fortress with negligible debt, the company faces severe operational headwinds. This is evidenced by plunging net income, razor-thin profit margins, and a deeply negative free cash flow burn.

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	56.97B	55.82B	56.40B	52.04B	45.79B	47.07B
Gross Profit	9.12B	8.89B	9.80B	9.72B	7.09B	8.31B
EBITDA	3.43B	3.63B	4.67B	5.17B	2.79B	4.33B
Net Income	729.00M	655.00M	1.10B	1.96B	348.00M	1.68B
Balance Sheet
Total Assets	55.01B	57.46B	60.50B	61.84B	53.58B	54.92B
Cash, Cash Equivalents and Short-Term Investments	6.23B	8.14B	11.13B	14.77B	10.71B	10.58B
Total Debt	1.44B	983.00M	595.00M	358.00M	456.00M	544.00M
Total Liabilities	17.91B	19.82B	23.09B	24.27B	19.05B	20.24B
Stockholders Equity	36.01B	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 SentimentNegative

Last Price861.00

Price Trends

50DMA889.32Negative

100DMA871.69Negative

200DMA920.76Negative

Market Momentum

MACD-5.30Positive

RSI38.24Neutral

STOCH34.85Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3553, the sentiment is Negative. The current price of 861.00 is below the 20-day moving average (MA) of 873.85, below the 50-day MA of 889.32, and below the 200-day MA of 920.76, indicating a bearish trend. The MACD of -5.30 indicates Positive momentum. The RSI at 38.24 is Neutral, neither overbought nor oversold. The STOCH value of 34.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	77Outperform	JPY 41.24B	9.76	―	4.03%	-9.00%	-15.37%
JP:4045	76Outperform	JPY 193.29B	14.14	6.32%	3.77%	2.33%	50.31%
JP:4189	76Outperform	JPY 122.06B	12.61	―	3.27%	-10.56%	6.77%
JP:5142	64Neutral	JPY 26.16B	8.58	―	2.20%	7.74%	350.67%
JP:4970	61Neutral	JPY 68.97B	18.24	―	0.52%	16.43%	50.52%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
JP:3553	53Neutral	JPY 21.09B	28.15	―	6.04%	0.96%	-6.54%

* 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.	861.00	34.96	4.23%
JP:4045	Toagosei Co	1815.50	344.97	23.46%
JP:4189	KH Neochem Co.,Ltd.	3290.00	638.08	24.06%
JP:4970	Toyo Gosei Co., Ltd.	8690.00	1691.97	24.18%
JP:5013	Yushiro Chemical Industry Co., Ltd.	3030.00	986.70	48.29%
JP:5142	Achilles Corporation	1816.00	586.48	47.70%

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: Aug 11, 2026

Kyowa Leather Cloth Co., Ltd. AI Stock Analysis