COMSYS Holdings Corporation FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥270.37B
• Operating Income: ¥18.04B
• Net Income: ¥11.37B
• EPS: ¥108.10

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

COMSYS Holdings (17210) reported FY2026 Q2 consolidated results under JGAAP showing steady top-line growth with improving profitability. Revenue increased 2.3% year over year to ¥270.4bn, while operating income rose 9.7% to ¥18.0bn, indicating positive operating leverage. Gross profit of ¥34.9bn implies a gross margin of 12.9%, and the operating margin expanded to 6.7%, up from roughly the mid-6% range a year ago. Ordinary income reached ¥18.8bn, and net income grew 16.7% to ¥12.7bn, with EPS of ¥108.10. The DuPont breakdown points to a net margin of 4.68%, asset turnover of 0.526x, and financial leverage of 1.33x, resulting in a calculated ROE of 3.28%, consistent with the reported figure. The ROE profile appears restrained by modest asset turnover and low leverage, partially offset by improved margins. Balance sheet strength is notable: total assets are ¥514.2bn against total equity of ¥385.3bn, implying an equity ratio of approximately 75.0% (the disclosed 0.0% is an unreported metric). Liquidity is robust with a current ratio of 237.6% and working capital of ¥189.8bn, supporting project execution capacity. Interest expense is minimal at ¥11mn, yielding an interest coverage ratio of ~1,640x, underscoring very low financial risk. The effective tax rate, inferred from the provided income tax, is approximately 31% for the period (not 0% as the auto metric suggests). Cash flow statement items, depreciation, cash and equivalents, and dividend data are unreported in this dataset, which constrains cash flow quality and payout assessment. EBITDA-based metrics are likewise not derivable given unreported depreciation and amortization. Given the Q2 timing in a project-based industry, seasonality and working capital swings likely influence interim profitability and cash conversion, but this cannot be quantified from the provided data. Overall, COMSYS demonstrates margin improvement and strong balance sheet resilience, though ROE remains modest and better cash flow disclosure is needed to assess earnings quality and dividend capacity.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 4.68%
• asset_turnover: 0.526
• financial_leverage: 1.33
• calculated_ROE: 3.28%
• commentary: ROE is driven primarily by modest net margins and low leverage; asset turnover below 1x reflects the asset-intensive, cash-rich balance sheet typical of large contractors. margin_quality:
• gross_profit_margin: 12.9%
• operating_margin: 6.7%
• ordinary_margin: 7.0%
• net_margin: 4.68%
• sg&a_to_sales: 6.2%
• commentary: Operating margin expansion outpaced revenue growth (op +9.7% vs sales +2.3%), implying improved cost control and/or better project mix. SG&A discipline contributed, with SG&A approximated at ¥16.8bn (6.2% of sales). operating_leverage: Positive in the period: modest revenue growth translated into disproportionately higher operating income, indicating incremental margin gains on additional volume and/or project mix improvements.

Growth Assessment

revenue_sustainability: Revenue growth of 2.3% is steady but modest, consistent with a mature infrastructure/telecom construction cycle. Sustainability will depend on order intake visibility and the cadence of large client capex (not provided here). profit_quality: Profit growth (+16.7% NP) exceeded sales growth due to margin expansion. Lack of depreciation and cash flow data limits assessment of non-cash components and underlying cash conversion. outlook: With a strong balance sheet and improved margins, execution capacity is solid. Near-term outlook hinges on backlog, order momentum, and cost inflation management; data for orders/backlog is not provided, so visibility is limited.

Financial Health

liquidity:

• current_ratio: 237.6%
• quick_ratio: 237.6% (inventories unreported)
• working_capital: ¥189,815mn
• commentary: Ample liquidity supports project delivery and buffers seasonal working capital needs. solvency:
• equity_ratio: ≈75.0% (Total equity ¥385.3bn / Total assets ¥514.2bn; disclosed 0.0% is unreported)
• interest_coverage: ≈1,640x (Operating income ¥18.0bn / Interest expense ¥11mn)
• debt_to_equity: 0.41x (interest-bearing debt detail not provided)
• commentary: Very low interest burden and high equity base indicate strong solvency with capacity to absorb shocks. capital_structure: Low leverage with substantial equity capitalization; financial flexibility appears high though net cash/NET debt cannot be determined due to unreported cash.

Cash Flow Quality

earnings_quality: Cannot be fully assessed: operating cash flow and depreciation are unreported. Accrual intensity and non-cash components cannot be quantified. FCF_analysis: Free cash flow cannot be computed given unreported OCF and investing cash flows. working_capital: Current assets ¥327.7bn vs current liabilities ¥137.9bn indicate significant working capital. However, composition (receivables, unbilled works, advances) is not disclosed, limiting conversion analysis.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout ratio are unreported in substance (zeros reflect non-disclosure). EPS is ¥108.10 for the period, but without actual DPS we cannot assess payout. FCF_coverage: Not assessable due to unreported OCF/FCF. policy_outlook: No information on dividend policy is provided. Balance sheet strength suggests capacity, but sustainability assessment requires actual DPS, FCF, and capital allocation guidance.

Risk Assessment

Business Risks:

• Order intake and backlog visibility risk given reliance on large infrastructure/telecom customers (not disclosed here).
• Project execution risk (cost overruns, delays) impacting margins.
• Labor availability and subcontractor cost inflation in construction/engineering markets.
• Cyclicality in public and private capex, including telecom network investment cycles.
• Seasonality and timing of revenue recognition tied to project milestones.

Financial Risks:

• Working capital concentration in receivables/unbilled amounts (composition not disclosed).
• Potential exposure to fixed-price contracts impacting margin variability.
• Counterparty credit risk from large customers during capex slowdowns.
• Limited visibility on net cash/lease obligations due to unreported cash and debt breakdown.

Key Concerns:

• Data gaps in cash flow and depreciation limit earnings quality assessment.
• Sustainability of margin improvement without order/backlog detail.
• Modest ROE driven by low asset turnover despite a strong balance sheet.

Investment Implications

Key Takeaways:

• Top-line growth of 2.3% with operating income up 9.7% signals positive operating leverage.
• Margins improved: operating margin reached ~6.7% with SG&A at ~6.2% of sales.
• Strong balance sheet: equity ratio ~75% and current ratio ~238% provide resilience.
• Interest burden is de minimis (coverage ~1,640x), indicating very low financial risk.
• ROE at ~3.3% remains modest due to low leverage and subdued asset turnover.
• Cash flow and dividend data are unreported, limiting assessment of cash conversion and payout sustainability.
• Working capital is sizable, consistent with project-based operations; conversion remains a watch point.

Metrics to Watch:

• Order backlog and book-to-bill ratio
• Operating cash flow and free cash flow conversion vs net income
• Gross margin and SG&A ratio trends
• Days sales outstanding and unbilled receivables
• Capex plans of key telecom/public sector customers
• Effective tax rate stability (~31% inferred)
• Asset turnover and ROE trajectory

Relative Positioning: Within Japan’s telecom/infrastructure construction peers, COMSYS exhibits stronger-than-average balance sheet strength and exceptionally low financial risk, with margins in the mid-to-high single-digit operating range and a moderate ROE constrained by conservative leverage and asset turnover.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis