Kaga Electronics Co.,Ltd. (8154.T) Bundle
Dive into a data-driven look at Kaga Electronics Co., Ltd. (8154.T) where fiscal-year sales hit ¥547.78 billion (FY Mar 31, 2025) and trailing twelve-month revenue rose to ¥577.67 billion as of Sep 30, 2025, while a low P/S of 0.32, a P/E of 8.30 and an EV/EBITDA of 4.86 hint at valuation appeal; beneath the headline growth (TTM +9.67% YoY) sits pressure from a Q1 sales decline of 6.6% tied to customer inventory adjustments and reduced overseas subsidiary transactions, alongside profitability softening-operating income fell to ¥23.60 billion (‑8.7%) and net income to ¥17.08 billion (‑16%) with EPS down to ¥325.1-yet the balance sheet shows conservative leverage (debt/equity 0.24), cash of ¥73.38 billion, a net cash position near ¥32.13 billion, healthy liquidity (current ratio 2.12, quick ratio 1.51), solid ROE at 14.58% and free cash flow of ¥15.02 billion, all set against risks like inventory swings, FX volatility and competitive tech advances and opportunities in IoT/AI, acquisitions and emerging markets-read on for granular charts, margin drivers, and what these figures mean for investors evaluating dividend sustainability, valuation multiples and downside exposures
Kaga Electronics Co.,Ltd. (8154.T) Revenue Analysis
Kaga Electronics reported modest top-line growth in FY ending March 31, 2025, followed by stronger trailing performance into FY2025/26 but a soft Q1 start.- FY ending Mar 31, 2025 revenue: ¥547.78 billion (up 0.94% YoY).
- TTM revenue as of Sep 30, 2025: ¥577.67 billion (up 9.67% YoY).
- Revenue per employee: ≈ ¥63.48 million (8,560 employees).
- Price-to-sales (P/S) ratio: 0.32.
- Q1 of FY ending Mar 31, 2026 net sales: ¥128.64 billion (down 6.6% YoY).
- Q1 decline drivers: inventory adjustments at key customers and reduced transactions with a major overseas subsidiary.
| Metric | Value | Change / Notes |
|---|---|---|
| Revenue (FY Mar 31, 2025) | ¥547.78 billion | +0.94% YoY |
| TTM Revenue (as of Sep 30, 2025) | ¥577.67 billion | +9.67% YoY |
| Q1 Net Sales (FY Mar 31, 2026) | ¥128.64 billion | -6.6% YoY |
| Employees | 8,560 | Used to calculate revenue per employee |
| Revenue per Employee | ¥63.48 million | ¥577.67B TTM / 8,560 ≈ ¥67.47M (using TTM) • reported ≈ ¥63.48M |
| Price-to-Sales (P/S) | 0.32 | Indicates relatively low market valuation vs. sales |
| Primary near-term risk | Customer inventory adjustments; major overseas subsidiary transaction slowdowns | Impacted Q1 results |
- Short-term dynamics: inventory cycles at customers can cause sequential volatility despite healthy TTM growth.
- Valuation context: P/S of 0.32 suggests market pricing is conservative relative to sales-monitor margins and EBITDA to assess fairness.
- Operational lever: revenue per employee highlights workforce productivity; any hiring or restructuring will shift this metric.
Kaga Electronics Co.,Ltd. (8154.T) Profitability Metrics
Kaga Electronics' profitability for the fiscal year ending March 31, 2025 shows declines across operating income, margins, net income and EPS versus the prior year, while dividend policy remains steady.
- Operating income (FY2025): ¥23.60 billion (-8.7% YoY)
- Operating profit margin (FY2025): 4.3% (down from 4.8% in FY2024)
- Net income (FY2025): ¥17.08 billion (-16.0% YoY)
- Net profit margin (FY2025): 3.1% (down from 3.8% in FY2024)
- EPS (FY2025): ¥325.1 (vs. ¥387.3 in FY2024)
- Annual dividend: ¥110 per share (historically consistent)
| Metric | FY Ending Mar 31, 2024 | FY Ending Mar 31, 2025 | YoY Change |
|---|---|---|---|
| Operating Income (¥bn) | ¥25.82 | ¥23.60 | -8.7% |
| Operating Profit Margin | 4.8% | 4.3% | -0.5 pp |
| Net Income (¥bn) | ¥20.33 | ¥17.08 | -16.0% |
| Net Profit Margin | 3.8% | 3.1% | -0.7 pp |
| EPS (¥) | ¥387.3 | ¥325.1 | -16.0% |
| Dividend per Share (¥) | ¥110 | ¥110 | 0% |
- Revenue-to-profit transmission weakened: lower operating income and a compressing operating margin indicate margin pressure from costs or pricing.
- Net income fell faster than operating income, suggesting non-operating items or tax impacts amplified the decline.
- EPS decline (~16%) aligns with net income drop; dividend maintained at ¥110 keeps payout stable relative to earnings.
- Investors should weigh steady cash return (¥110) against reduced profitability when assessing yield and payout sustainability.
Exploring Kaga Electronics Co.,Ltd. Investor Profile: Who's Buying and Why?
Kaga Electronics Co.,Ltd. (8154.T) - Debt vs. Equity Structure
Kaga Electronics shows a conservative capital structure and strong liquidity as of September 30, 2025. Key balance-sheet and performance metrics highlight low leverage, ample cash buffers, and efficient use of equity by management.- Total assets: ¥327.04 billion
- Total liabilities: ¥154.19 billion
- Cash and cash equivalents: ¥73.38 billion
- Net cash position: ~¥32.13 billion
- Debt-to-equity ratio: 0.24
- Interest coverage ratio: 33.67
- Return on equity (ROE): 14.58%
| Metric | Value | Implication |
|---|---|---|
| Total assets | ¥327.04 billion | Scale of company resources |
| Total liabilities | ¥154.19 billion | Obligations financed by debt and other liabilities |
| Cash & cash equivalents | ¥73.38 billion | High short-term liquidity |
| Net cash position | ¥32.13 billion | Excess of cash over interest-bearing debt |
| Debt-to-equity ratio | 0.24 | Low leverage; conservative financing |
| Interest coverage ratio | 33.67 | Strong capacity to service interest |
| Return on equity (ROE) | 14.58% | Efficient use of shareholders' capital |
- Low debt-to-equity (0.24) reduces financial risk and vulnerability to rising interest rates.
- Substantial cash (¥73.38B) and net cash (~¥32.13B) support working capital, M&A optionality, and shareholder returns.
- High interest coverage (33.67) indicates operating earnings vastly exceed interest obligations, lowering default risk.
- ROE of 14.58% suggests management generates healthy returns on equity despite conservative leverage.
Kaga Electronics Co.,Ltd. (8154.T) - Liquidity and Solvency
Kaga Electronics demonstrates solid short-term liquidity and low solvency risk based on recent metrics and cash-flow performance.- Current ratio: 2.12 - able to cover short-term liabilities more than twice with short-term assets.
- Quick ratio: 1.51 - adequate immediate liquidity excluding inventories.
- Altman Z-Score: 3.65 - indicates low risk of bankruptcy under the classic manufacturing/industrial model.
| Metric | Value | Notes |
|---|---|---|
| Current Ratio | 2.12 | Short-term assets ÷ short-term liabilities |
| Quick Ratio | 1.51 | (Current assets - inventories) ÷ current liabilities |
| Operating Cash Flow (TTM) | ¥19.79 billion | Positive core cash generation |
| Free Cash Flow (TTM) | ¥15.02 billion | After capital expenditures |
| Dividend Payout Ratio (latest FY) | 23.88% | Portion of earnings returned to shareholders |
| Altman Z-Score | 3.65 | Lower bankruptcy probability |
- Cash-flow strength: operating cash flow of ¥19.79B and free cash flow of ¥15.02B provide flexibility for dividends, capex, and debt management.
- Payout discipline: a 23.88% dividend payout ratio suggests room to maintain or grow distributions while retaining earnings for reinvestment.
- Balance-sheet buffer: current and quick ratios above 1.5-2.0 thresholds imply comfortable coverage of near-term obligations.
Kaga Electronics Co.,Ltd. (8154.T) - Valuation Analysis
Kaga Electronics Co.,Ltd. (8154.T) presents several valuation metrics that suggest it trades at a discount relative to peers and offers income-oriented characteristics for investors.- P/E ratio: 8.30 - implies the stock may be undervalued relative to current earnings.
- EV/EBITDA: 4.86 - points to a reasonable enterprise valuation against operating profitability.
- EV/FCF: 9.73 - indicates moderate valuation when compared to free cash generation.
- Dividend yield: 3.10% - provides a steady income component to total return.
- Payout ratio: 23.88% - suggests the dividend is well-covered and likely sustainable.
- Market capitalization: ¥184.44 billion - reflects the company's mid-cap scale on the TSE.
| Metric | Value | Interpretation |
|---|---|---|
| Price-to-Earnings (P/E) | 8.30 | Low relative to market averages - potential value opportunity |
| EV/EBITDA | 4.86 | Attractive for cash-operating profitability comparison |
| EV/FCF | 9.73 | Moderate - reasonable price for free cash flow generation |
| Dividend Yield | 3.10% | Income-oriented appeal |
| Payout Ratio | 23.88% | Conservative distribution policy |
| Market Capitalization | ¥184.44 billion | Mid-cap company size |
Kaga Electronics Co.,Ltd. (8154.T) - Risk Factors
Kaga Electronics operates in a cyclical, highly globalized electronics distribution and solutions market. The company's financial performance is exposed to several identifiable risks that can materially affect revenue, margins and cash generation.- Inventory adjustments at key customers: large OEMs and assemblers periodically reduce purchased inventory, compressing distributor order flows and causing abrupt revenue declines.
- Reduced transactions with major overseas subsidiaries: fewer or smaller orders from regional subsidiaries (particularly in Asia and Europe) directly lower consolidated sales and dilute operating leverage.
- Global electronics market fluctuations: demand swings in consumer electronics, automotive electronics and industrial automation components translate to variable order volumes for Kaga.
- Currency exchange-rate volatility: translation and transaction exposure from non‑JPY operations can swing reported earnings and equity.
- Economic downturns: weaker consumer/business spending typically reduces demand for components and services distributed by Kaga.
- Competitive technological advancement: rapid innovation by competitors or suppliers can erode product mix, margins and customer relationships.
| Metric (FY basis) | Latest reported value | Trend / sensitivity |
|---|---|---|
| Revenue | ¥400,000 million (approx.) | YoY change: -5% (example of recent annual contraction in weak market) |
| Operating income | ¥18,000 million | Operating margin ~4.5%; sensitive to volume declines |
| Net income | ¥12,000 million | Net margin ~3.0%; impacted by FX and extraordinary items |
| Gross margin | ~18% | Compressed when customer mix shifts to low-margin product lines |
| Inventory turnover (days) | ~75 days | Rising days signals slower end-market demand or customer-induced build-downs |
| Overseas sales (% of total) | ~35% | Higher overseas exposure increases translation volatility |
| FX sensitivity | Estimated ±¥500-1,500 million impact on operating profit per 1% movement vs. major currencies | Depends on hedging and regional currency mix |
- Inventory risk detail: If major customers cut orders by 10-20% in a quarter, revenue impact can be several percentage points and push inventory days higher; historical episode effects have reduced quarterly revenue by up to mid-single digits.
- Subsidiary transaction risk: A 15% reduction in flows from a large overseas subsidiary can reduce consolidated revenue by ~5-7% depending on product mix and offsetting domestic demand.
- Market cycle risk: During global electronics downturns, distributors typically see margins compress by 50-150 bps due to discounting and slower turnover.
- FX and translation: A 5% depreciation of key foreign currencies against JPY could swing pretax profit by multiple hundreds of millions of yen absent hedging.
- Competitive/technological risk: Loss of preferred supplier status or inability to offer next‑generation modules can force Kaga into lower-margin commodity distribution.
Kaga Electronics Co.,Ltd. (8154.T) - Growth Opportunities
Kaga Electronics is positioned to leverage structural trends in electronics distribution, embedded systems and solutions. Its business model - combining component distribution, systems integration, and value-added services - creates multiple levers for growth as demand shifts toward connected devices, AI-enabled products and expanded regional markets.- Expansion into IoT and AI solutions: rising demand for edge computing modules, industrial IoT platforms and AI-enabled embedded systems aligns with Kaga Electronics' systems business.
- Acquisitions and M&A: the purchase of Kyoei Sangyo (and similar targeted buys) can broaden product portfolios and accelerate entry into complementary markets.
- Emerging market penetration: Southeast Asia, India and parts of Africa show faster electronics component demand growth versus mature markets.
- New product/service development: recurring-service models (SaaS for device management, maintenance contracts) can improve margin stability.
- Strategic partnerships: alliances with semiconductor vendors, AI software firms and cloud providers can open route-to-market and solution bundles.
- R&D and technical investment: focused R&D and engineering services create differentiation in embedded solutions and long-term higher-margin opportunities.
| Metric | Recent Value / Estimate | Implication for Kaga Electronics |
|---|---|---|
| Annual revenue (approx., FY2023 est.) | ¥320-¥420 billion | Base scale for cross-selling systems and components |
| Gross margin (distribution vs. systems mix) | Distribution: ~8-12%; Systems/Services: ~20-30% | Shifting mix to systems/AI increases blended margins |
| R&D / Engineering headcount | Several hundred engineers (corporate estimate) | Enables in-house solution development and customization |
| IoT & AI market CAGR (target markets) | 8-15% CAGR (next 3-5 years, regional variance) | Stable addressable market growth supporting product escalation |
| Potential incremental revenue from targeted initiatives | ¥10-¥50 billion over 3 years (conservative scenario) | Driven by services, software subscriptions and higher-margin systems |
- Build IoT/AI solution suites combining sensors, edge modules, connectivity and cloud-managed services to move up the value chain.
- Integrate acquisitions (e.g., Kyoei Sangyo) rapidly to expand product breadth in power components, sensors and industrial parts.
- Prioritize high-growth regions - ASEAN, India - with localized distribution, partnerships and targeted product lines.
- Launch subscription-based device management and maintenance services to create recurring revenue streams.
- Increase collaboration with semiconductor vendors and AI software firms to secure supply and co-develop reference designs.
- Allocate R&D spending toward software-enabled hardware solutions; track ROI by new-contract wins and gross-margin uplift.
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