Kohjin Bio Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥2.50B
• Operating Income: ¥257M
• Net Income: ¥277M
• EPS: ¥39.53

Income Statement

Balance Sheet

Cash Flow Statement

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

Kojin Bio Co., Ltd. reported FY2026 Q2 consolidated results under JGAAP with essentially flat revenue at ¥2,504 million (-0.1% YoY), but a notable contraction in profitability at the operating line. Gross profit of ¥1,059 million reflects a healthy gross margin of 42.3%, indicating pricing discipline and/or favorable product mix despite top-line stagnation. Operating income declined 32.2% YoY to ¥257 million, translating to an operating margin of roughly 10.3%, suggesting higher SG&A and/or R&D intensity amid flat sales. Ordinary income of ¥272 million and net income of ¥202 million (-27.1% YoY) show that non-operating items were modestly supportive, but not enough to offset operating pressure. DuPont analysis indicates a reported ROE of 3.47%, driven by an 8.07% net margin, asset turnover of 0.283x, and financial leverage of 1.52x; the weak ROE is largely a function of subdued asset velocity and margin compression. EBITDA was ¥433 million with a 17.3% margin, underscoring moderate operating leverage but also signaling cost pressure compared with prior-year profitability. Cash generation was strong: operating cash flow of ¥518 million was 2.57x net income, pointing to high earnings quality and favorable working capital dynamics. Liquidity appears sound with a current ratio of 203.7% and a quick ratio of 191.1%, backed by working capital of ¥2,580 million. Leverage is conservative with a debt-to-equity ratio of 0.57x, and interest coverage is robust at 17.9x, implying low refinancing risk under current earnings. The equity ratio and several cash flow line items show as zero, which likely indicates non-disclosure rather than actual zero values; conclusions are therefore based on disclosed non-zero metrics. The effective tax rate shown as 0.0% in the calculated metrics appears to be a placeholder; using the disclosed income tax expense (¥89.6 million) against ordinary income suggests a tax burden in the low-30% range, though we cannot confirm pretax profit under JGAAP from the data provided. Dividend data show DPS and payout as zero, which may reflect a non-dividend policy or non-disclosure; no conclusion on shareholder return policy can be drawn without more detail. The balance sheet shows total assets of ¥8,843 million and equity of ¥5,813 million, implying modest leverage and capacity to invest. Financing cash inflow of ¥1,486 million suggests incremental borrowings and/or equity-related movements, but the lack of disclosed investing cash flows and period-end cash limits interpretation of capital deployment. Overall, the quarter showcases resilient gross profitability and strong cash conversion, offset by operating cost pressure and low ROE. The outlook hinges on re-accelerating revenue growth, stabilizing operating expenses, and sustaining cash discipline to improve returns.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 8.07%
• asset_turnover: 0.283x
• financial_leverage: 1.52x
• calculated_ROE: 3.47%
• interpretation: Low ROE is primarily driven by sluggish asset turnover and margin compression at the operating level; leverage is modest and not a significant driver of returns. margin_quality:
• gross_margin: 42.3%
• operating_margin: ≈10.3%
• EBITDA_margin: 17.3%
• commentary: Gross margin remains robust, implying stable pricing or favorable mix, but SG&A/R&D pressures compressed operating margin YoY. Ordinary margin modestly exceeded operating margin, suggesting limited non-operating gains. operating_leverage:
• evidence: Operating income fell 32.2% on flat revenue (-0.1%), indicating negative operating leverage this quarter.
• drivers: Higher fixed costs and/or increased R&D and commercialization spending amid stagnant sales.

Growth Assessment

revenue_sustainability: Revenue was flat YoY at ¥2,504 million, implying stable demand but no visible growth catalysts within the period. profit_quality: Net margin of 8.07% remains respectable, but the step-down in operating margin indicates near-term cost friction; gross margin resilience supports underlying product economics. outlook: A return to profit growth likely requires reacceleration in sales and better cost absorption. With healthy liquidity, the company can sustain strategic spending, but without top-line momentum, ROE improvement will be limited.

Financial Health

liquidity:

• current_ratio: 203.7%
• quick_ratio: 191.1%
• working_capital: ¥2,579,661,000
• assessment: Strong short-term coverage; low inventory relative to current assets supports the high quick ratio. solvency:
• debt_to_equity: 0.57x
• interest_coverage: 17.9x
• assessment: Conservative leverage and ample interest coverage reduce financial risk. capital_structure:
• assets: ¥8,843,000,000
• equity: ¥5,813,000,000
• liabilities: ¥3,284,826,000
• commentary: Balance sheet capacity exists for selective investment; equity ratio not disclosed (0 indicates non-reporting).

Cash Flow Quality

earnings_quality:

• OCF_to_NI: 2.57x
• interpretation: Strong conversion suggests conservative revenue recognition and favorable working capital movements. FCF_analysis:
• operating_CF: ¥518,146,000
• investing_CF: Not disclosed in period (0 shown indicates non-reporting)
• free_cash_flow: Not inferable due to undisclosed capex/investing CF (calculated 0 is a placeholder)
• commentary: Without investing cash flows, true FCF cannot be assessed; OCF strength is nevertheless a positive signal. working_capital:
• inventories: ¥313,323,000
• notes: High quick ratio implies limited inventory drag; further detail on receivables/payables would clarify sustainability of OCF.

Dividend Sustainability

payout_ratio_assessment: Payout ratio reported as 0.0% and DPS at ¥0.00 appear to be non-disclosure placeholders; unable to assess dividend policy or sustainability. FCF_coverage: Not assessable due to undisclosed investing cash flows; OCF is positive and robust but capex needs are unknown. policy_outlook: Given low ROE (3.47%) and a need to reinvest for growth, internal retention would be logical, but no disclosed policy prevents firm conclusions.

Risk Assessment

Business Risks:

• Revenue stagnation risking operating deleverage if costs remain elevated
• Potential concentration in key products or customers (not disclosed) leading to volatility
• Regulatory and quality compliance risks typical for bio-related manufacturing
• Input cost fluctuations and supply chain constraints impacting gross margin
• Execution risk in R&D or new product commercialization if applicable

Financial Risks:

• Low asset turnover and weak ROE limiting capital efficiency
• Dependence on continued positive OCF to fund operations amid limited disclosed investing details
• Potential refinancing or covenant risk if financing inflows represent new borrowings (details not disclosed)
• Tax rate variability given limited clarity on pretax profit composition

Key Concerns:

• Operating margin compression despite stable sales
• Lack of disclosure for investing cash flows and cash balance, limiting visibility on FCF and liquidity buffers
• Sustained low ROE driven by slow asset turnover

Investment Implications

Key Takeaways:

• Stable revenue but significant operating profit contraction indicates negative operating leverage in the half
• Gross margin resilience supports underlying unit economics
• ROE at 3.47% is below typical cost of equity benchmarks, constrained by low asset turnover
• OCF strength (2.57x NI) signals high earnings quality
• Balance sheet is liquid with conservative leverage and strong interest coverage
• Limited disclosure on investing CF and cash complicates FCF assessment and capital allocation analysis

Metrics to Watch:

• Operating margin trajectory and SG&A/R&D intensity
• Revenue growth reacceleration and order intake/backlog (if disclosed)
• Asset turnover improvement (sales-to-assets)
• OCF/NI conversion and working capital trends (DSO/DPO/DIO)
• Capex and investing cash flows to establish true FCF
• Leverage and financing mix following the large financing inflow

Relative Positioning: Versus domestic small-cap bio/health-related peers, Kojin Bio exhibits solid gross margins and liquidity but lags on ROE and growth momentum; earnings quality is comparatively strong, yet operating leverage and limited disclosure on capex temper visibility.

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