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:54Neutral

Price Target:JPY 893.00▲(2.06% Upside)

Action:reiterated

Date:11/12/26

The score is held back primarily by weakening profitability and very weak/negative recent free cash flow, despite the company’s strong, low-debt balance sheet. Technical indicators are neutral-to-soft, while valuation is supported by a high dividend yield but offset by a mid-to-high P/E relative to the current fundamentals.

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 20.95B
Dividend Yield: 5.94%
Average Volume (3M): 36.25K
Price to Earnings (P/E): 23.0
Beta (1Y): 0.84
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

Financials are mixed: a very strong, low-leverage balance sheet (debt-to-equity ~0.03) provides stability, but operating performance has weakened with stalled revenue growth (2026 -1.09%), sharp margin compression (EBIT margin ~1.6% vs ~5.2% in 2024), and deteriorating cash generation (free cash flow deeply negative in 2025–2026 and operating cash flow down materially vs 2024).

Income Statement

52Neutral

Balance Sheet

82Very Positive

Cash Flow

38Negative

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 SentimentNeutral

Last Price875.00

Price Trends

50DMA883.94Negative

100DMA873.92Positive

200DMA914.90Negative

Market Momentum

MACD-5.99Negative

RSI52.19Neutral

STOCH73.34Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3553, the sentiment is Neutral. The current price of 875.00 is above the 20-day moving average (MA) of 868.05, below the 50-day MA of 883.94, and below the 200-day MA of 914.90, indicating a neutral trend. The MACD of -5.99 indicates Negative momentum. The RSI at 52.19 is Neutral, neither overbought nor oversold. The STOCH value of 73.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 41.58B	9.66	―	3.92%	-0.92%	0.66%
JP:4189	76Outperform	JPY 125.40B	12.40	―	3.27%	-6.23%	8.54%
JP:4045	69Neutral	JPY 189.19B	14.03	6.32%	3.83%	2.33%	50.31%
JP:5142	63Neutral	JPY 25.47B	8.79	―	2.21%	7.74%	350.67%
JP:4970	61Neutral	JPY 56.75B	16.31	―	0.66%	20.83%	89.46%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
JP:3553	54Neutral	JPY 21.36B	22.96	―	5.94%	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.	875.00	58.42	7.15%
JP:4045	Toagosei Co	1789.00	275.22	18.18%
JP:4189	KH Neochem Co.,Ltd.	3290.00	983.14	42.62%
JP:4970	Toyo Gosei Co., Ltd.	7610.00	930.51	13.93%
JP:5013	Yushiro Chemical Industry Co., Ltd.	3110.00	928.43	42.56%
JP:5142	Achilles Corporation	1813.00	520.83	40.31%

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