Kadokawa's Global Chinese Animation Release Might Change the Case for Investing in Kadokawa (TSE:9468)

• On October 13, 2025, iQIYI announced a collaboration with Kadokawa Corporation to distribute original Chinese animated series, including "The Fated Magical Princess" and "The Forbidden City: Cat Imperial Study," to key global markets.
• This marks Kadokawa's first simultaneous international release of a premium Chinese animation produced by a Chinese streaming platform, highlighting its expanding content strategy.
• We'll explore how Kadokawa's move to launch Chinese animation internationally could shape its investment narrative and future content reach.

Find companies with promising cash flow potential yet trading below their fair value.

What Is Kadokawa's Investment Narrative?

For shareholders in Kadokawa, the core belief is in the company’s ability to build on its global content platform and alliances. The recent partnership with iQIYI marks a meaningful step, positioning Kadokawa to capitalize on surging demand for Asian content beyond Japan’s domestic market and could strengthen its long-term growth narrative if these series gain global traction. This move may also serve as a near-term catalyst for interest in the stock, given investor focus on expanding intellectual property (IP) reach and diversified content. However, any potential financial upside will depend on actual audience reception and the monetization of these new titles, which is difficult to forecast at this early stage. Risks around stretched valuation multiples remain, especially as recent share price moves suggest the market may already be pricing in strong growth expectations. But it’s clear Kadokawa’s approach to global expansion is evolving and could influence both catalysts and risk factors ahead.

But, the question of whether current profit margins can support this expansion effort remains unresolved. Despite retreating, Kadokawa's shares might still be trading above their fair value and there could be some more downside. Discover how much.

Exploring Other Perspectives

Simply Wall St Community members offered just two fair value estimates, spanning from ¥3,947 to a very large ¥7,257 per share. While you may see opportunity or excess optimism in these numbers, keep in mind the near-term impact of new content collaborations and the wider risks to profitability. There’s value in comparing diverse market opinions.

Explore 2 other fair value estimates on Kadokawa - why the stock might be worth over 2x more than the current price!

Build Your Own Kadokawa Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Kadokawa research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Kadokawa research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Kadokawa's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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