| Metric | Current Period | YoY (Prior Year) | YoY |
|---|---|---|---|
| Revenue | ¥82.9B | ¥73.6B | +12.5% |
| Operating Income | ¥1.8B | ¥0.1B | -61.2% |
| Ordinary Income | ¥14.4B | ¥23.6B | -38.9% |
| Net Income | ¥13.5B | ¥23.1B | -41.6% |
| ROE | 4.8% | 8.2% | - |
FY2026 Q3 results: Revenue ¥82.9B (YoY +¥9.3B +12.5%), Operating Income ¥1.8B (YoY -¥2.9B -61.2%), Ordinary Income ¥14.4B (YoY -¥9.2B -38.9%), Net Income ¥13.5B (YoY -¥9.6B -41.6%). Despite higher revenue, operating profit declined, and the operating margin fell to 2.2%. Ordinary Income was supported by ¥12.0B in dividend income, securing ¥14.4B, but declined YoY. Earnings generation driven by core operations remains weak, and the profit structure continues to rely on investment income.
[Profitability] ROE 4.8% (well below the industry median of 10.4%), Operating Margin 2.2% (below the industry median of 4.5% and showing a large gap versus the company’s gross margin of 16.2%), Net Margin 16.2% (well above the industry median of 4.7% but dependent on non-operating income), Return on Assets 4.3% (below the industry median of 5.7%). [Cash Quality] Cash and deposits ¥75.6B (down -50.8% from ¥153.5B YoY), current assets ¥220.6B with coverage of short-term liabilities of ¥26.8B at 8.2x. Working capital remains ample at ¥193.7B. [Investment Efficiency] Total asset turnover 0.27x; inventories at ¥41.1B (YoY +31.0%), indicating a notable inventory build; investment securities at ¥41.6B (YoY +48.1%). [Financial Soundness] Equity Ratio 89.1% (far above the industry median of 52.3%), Current Ratio 821.7% (significantly exceeding the industry median of 225.0%), and Debt-to-equity ratio 0.12x, indicating extremely low financial leverage.
While detailed data for Operating Cash Flow (OCF), investing CF, and financing CF are not disclosed, we analyze cash movements based on BS trends. Cash and deposits decreased by -¥77.9B YoY to ¥75.6B, while investment securities increased by +¥13.5B and inventories by +¥10.0B during the same period. Despite Net Income of ¥13.5B, cash declined significantly, likely due to a combination of dividend payments (¥30.0 per share; total approx. ¥17.9B), inventory buildup, and cash outflows for purchasing securities. Accounts payable increased by +¥23.9B, suggesting extended payment terms or increased use of short-term liabilities in response to supply chain needs. Cash coverage of short-term liabilities is ample at 8.2x; however, the halving of cash YoY indicates a shift in capital allocation. Working capital remains thick at ¥193.7B and liquidity risk is low, but the balance of rising inventories and declining cash will affect future turnover efficiency and cash generation.
Against Ordinary Income of ¥14.4B, Operating Income was ¥1.8B, implying a net non-operating increase of about ¥12.6B. The main component was ¥12.0B in dividend income, resulting in non-operating income accounting for 15.9% of revenue. With an operating margin of 2.2% versus a net margin of 16.2%—a gap of over 7x—there is a pronounced disconnect between the earnings capacity of core operations and bottom-line profit. Although OCF data are undisclosed and cannot directly verify cash backing for earnings, the sharp decline in cash versus Net Income of ¥13.5B suggests that dividend payments and investment outlays likely prevented OCF from contributing to cash buildup. Dividend income depends on investees’ dividend policies and, while sustainable to an extent, raises concerns about the quality and durability of earnings if operating profitability does not improve.
[Position within Industry] (Reference information; our research) Profitability: ROE 4.8% (5.6pt below the industry median of 10.4%, lower tier within the industry with significant room to improve capital efficiency), Operating Margin 2.2% (2.3pt below the industry median of 4.5%, lower tier; SG&A control and cost efficiency are challenges), Net Margin 16.2% (11.5pt above the industry median of 4.7%, upper tier but dependent on non-operating income; sustainability warrants attention) Soundness: Equity Ratio 89.1% (36.8pt above the industry median of 52.3%, top-tier within the industry; financial safety is extremely high), Current Ratio 821.7% (far exceeds the industry median of 225.0%, outstanding short-term payment capacity) Efficiency: Revenue growth rate +12.5% (+4.2pt above the industry median of 8.3%, upper-tier growth, though conversion to operating profit is inefficient), Return on Assets 4.3% (1.4pt below the industry median of 5.7%, lower tier; asset efficiency needs improvement) Industry: Mining (N=6 companies), Comparison: FY2025 Q3, Source: Our compilation
This report is an earnings analysis document automatically generated by AI based on XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. The industry benchmark is reference information compiled by our firm based on publicly available financial statements. Investment decisions are your own responsibility; consult a professional as needed before making any investment decisions.