These are mechanically computed values based on a residual income model. They are not a forecast of market prices or a recommendation of any investment action, and do not predict or guarantee future share prices. Historical values are computed retrospectively using current guidance-achievement statistics.
| Metric | Current Period | Same Period Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥3121.5B | ¥2859.1B | +9.2% |
| Operating Income | ¥298.6B | ¥204.5B | +46.0% |
| Ordinary Income | ¥304.6B | ¥191.6B | +58.9% |
| Net Income | ¥213.0B | ¥126.3B | +68.6% |
| ROE | 3.7% | 2.2% | - |
The quarter delivered higher revenue and earnings, with earnings growth significantly outpacing revenue growth and a clear improvement in profit margins. Revenue was ¥3121.5B (+9.2% YoY), Operating Income was ¥298.6B (+46.0%), Ordinary Income was ¥304.6B (+58.9%), and Net Income attributable to owners of the parent was ¥212.9B (+68.5%), representing substantial increases across the board. The primary drivers of earnings growth were the improvement in the gross profit margin on completed construction contracts in the Construction-Related Business (13.2%→17.7%), contributions from highly profitable projects in the Real Estate-Related Business, and the return of equity-method investment gains to profitability. The Operating Income margin improved to 9.6% (7.2% in the previous year), while the Operating Income progress rate against the full-year company forecast was 27.1%, exceeding the standard quarterly progress rate of 25%.
【Revenue】Revenue was ¥3121.5B, an increase of +9.2% YoY. By segment, the core Construction-Related Business grew to ¥2350.1B (+3.7%), and the Real Estate-Related Business rose to ¥598.5B (+18.6%), while the Property Management and Operations Business was nearly flat at ¥375.2B (-0.4%), and the Overseas Business declined to ¥11.7B (-14.8%). The Construction-Related Business accounted for 70.5% of total segment revenue, followed by the Real Estate-Related Business at 17.9%. Completed construction revenue was ¥1533.6B, while advances received on construction contracts in progress accumulated to ¥705.2B (+11.5% compared with the end of the previous fiscal year), indicating favorable billing progress on construction projects on hand.
【Profit and Loss】Operating Income was ¥298.6B (+46.0% YoY), and the Operating Income margin improved to 9.6% (7.2% in the previous year). The primary factors were the improvement in the gross profit margin on completed construction contracts from 13.2% to 17.7% and the decline in the SG&A ratio from 7.4% to 7.0%, resulting in operating leverage. Ordinary Income was ¥304.6B (+58.9%), exceeding Operating Income, as equity-method investment gains turned positive from a loss of ¥0.6B in the previous year to a gain of ¥1.1B, while dividend income of ¥3.7B and interest income of ¥2.0B offset the increase in interest expense to ¥14.5B (¥11.2B in the previous year). Extraordinary losses were limited to ¥0.8B, including impairment losses of ¥0.8B, indicating that temporary factors were minor. Net Income attributable to owners of the parent was ¥212.9B (+68.5%), and the effective tax rate declined slightly to 29.9% (33.8% in the previous year). Overall, this was a margin-led earnings result, with both revenue and earnings increasing and earnings growth substantially exceeding revenue growth.
The Construction-Related Business generated revenue of ¥2350.1B (+3.7%) and Operating Income of ¥231.6B (+50.6%). Its Operating Income margin improved from 6.8% in the previous year to 9.9%, making it the largest contributor to the increase in company-wide earnings. The Real Estate-Related Business generated revenue of ¥598.5B (+18.6%) and Operating Income of ¥69.0B (+12.2%), maintaining the highest margin among all segments at 11.5%. The Property Management and Operations Business generated revenue of ¥375.2B (-0.4%) and Operating Income of ¥17.4B (-3.8%), with a margin of 4.6%, remaining nearly flat and stable. The Overseas Business recorded revenue of ¥11.7B (-14.8%) and an Operating Loss of ¥4.1B (a loss of ¥1.4B in the previous year), resulting in a larger loss. Its margin deteriorated from -10.4% to -35.4%, making the improvement of profitability a key future challenge.
【Profitability】The gross profit margin improved to 16.6% (14.6% in the previous year), the Operating Income margin to 9.6% (7.2%), and the Net Income margin, based on income attributable to owners of the parent, to 6.8% (4.4%). Profit margins expanded by more than the increase in revenue, indicating an earnings structure characterized by stronger profitability.【Cash Quality】Cash and deposits were ¥2302.9B, down from ¥2799.7B at the end of the same period of the previous year, reflecting the increase in advances received on construction contracts in progress (¥705.2B, +11.5%) as well as seasonal cash outflows such as tax payments and bonus payments.【Investment Efficiency】ROE (quarterly basis, not annualized) was 3.7%, while revenue turnover was approximately 0.23 times per quarter against total assets of ¥13530.5B.【Financial Soundness】The Equity Ratio improved to 42.2% (39.7% in the previous year). With current assets of ¥9909.0B and current liabilities of ¥3211.6B, the current ratio was approximately 308%, securing a high level of liquidity. Interest-bearing debt primarily consisted of long-term borrowings of ¥3380.0B and bonds of ¥800.0B, indicating that funding was not excessively reliant on short-term financing.
As the cash flow statement was outside the scope of disclosure, cash trends are analyzed based on changes in the balance sheet. Cash and deposits were ¥2302.9B, a decrease of ¥496.7B from ¥2799.7B at the end of the same period of the previous year. From a working capital perspective, advances received on construction contracts in progress increased to ¥705.2B (+11.5%), indicating favorable billing progress, while trade payables related to construction were ¥946.8B, down ¥71.0B from ¥1017.8B in the previous year, indicating that payments preceded collections. Income taxes payable declined substantially to ¥52.1B (¥240.8B in the previous year), as tax payments made during the period placed pressure on cash. The provision for bonuses also declined to ¥38.3B (¥86.2B in the previous year), reflecting seasonal bonus payments. Real estate for sale was ¥2435.0B, down from ¥2548.2B in the previous year, suggesting that inventory reduction may have contributed in part to cash generation. Overall, despite expanded earnings, cash and deposits declined as tax and bonus payments coincided with a decrease in trade payables.
The increase in earnings for the period was led by growth in Operating Income, while the impact of extraordinary gains and losses was minor, indicating good earnings quality. Extraordinary losses were limited to ¥0.8B, including impairment losses of ¥0.8B, and extraordinary gains were negligible. In non-operating income and expenses, equity-method investment gains turned positive from a loss of ¥0.6B in the previous year to a gain of ¥1.1B, while dividend income of ¥3.7B and interest income of ¥2.0B provided support; meanwhile, interest expense increased to ¥14.5B (¥11.2B in the previous year). As a result, Ordinary Income exceeded Operating Income by approximately ¥6.0B, reversing the relationship in the previous year, when Operating Income exceeded Ordinary Income by approximately ¥12.9B. The effective tax rate was 29.9% (income taxes of ¥90.7B against profit before tax of ¥303.7B), slightly lower than 33.8% in the previous year. Comprehensive Income was ¥202.1B, ¥10.9B below Net Income attributable to owners of the parent of ¥212.9B. Valuation differences on other securities declined by ¥30.1B, while foreign currency translation adjustments contributed an increase of ¥20.1B. The divergence between Net Income and Comprehensive Income was primarily attributable to changes in the market value of securities and does not impair the company’s recurring earnings power.
Progress toward the full-year company forecast is proceeding at a pace at which earnings progress exceeds revenue progress. The revenue progress rate was 22.6% (¥3121.5B/¥13800.0B), slightly below the standard quarterly progress rate of 25%, while the Operating Income progress rate was 27.1% (¥298.6B/¥1100.0B), the Ordinary Income progress rate was 29.0% (¥304.6B/¥1050.0B), and the Net Income progress rate, based on income attributable to owners of the parent, was 32.3% (¥212.9B/¥660.0B), all exceeding the standard rate. The company made no revisions to either its earnings forecast or dividend forecast during the quarter and maintained its full-year forecasts. The slightly low revenue progress rate is largely attributable to the timing of construction progress recognition in the Construction Business, while the strong earnings progress appears to reflect the improvement in the gross profit margin on completed construction contracts and the return of equity-method investment gains to profitability.
The company forecasts a full-year dividend per share of ¥100 and made no revisions during the quarter. Compared with the previous fiscal year’s actual annual dividend of ¥45, the forecast dividend represents a substantial increase. The Payout Ratio against forecast EPS of ¥249.19 is approximately 40.1% (¥100/¥249.19), which is considered sustainable in light of earnings growth. Given the financial foundation consisting of an Equity Ratio of 42.2% and cash and deposits of ¥2302.9B, no significant constraints on securing funds for dividends are evident.
Deterioration in Overseas Business profitability: The Overseas Business recorded an Operating Loss of ¥4.1B, up from ¥1.4B in the previous year, while revenue declined to ¥11.7B (-14.8%). Its margin deteriorated to -35.4% ( -10.4% in the previous year), making progress in restoring profitability a key focus going forward.
Concentration in the Construction-Related Business: The Construction-Related Business accounts for 70.5% of total segment revenue and 73.8% of segment profit. Consequently, increases in material prices and labor costs can have a direct impact on company-wide earnings through the gross profit margin on completed construction contracts (17.7% in the current period).
Rising interest rates and interest-bearing debt: The company has a substantial balance of interest-bearing debt, primarily consisting of long-term borrowings of ¥3380.0B and bonds of ¥800.0B. Interest expense increased by +30.2% to ¥14.5B (¥11.2B in the previous year). If interest rates rise further, higher funding costs could put pressure on earnings.
Profitability and Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Income margin | 9.6% | 4.5% (2.7%–6.6%) | +5.1pt |
| Net Income margin | 6.8% | 3.8% (-1.1%–4.4%) | +3.1pt |
Both the Operating Income margin and Net Income margin clearly exceed the industry median, placing the company’s profitability at a relatively high level within the industry.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue growth rate (YoY) | 9.2% | 4.8% (3.4%–10.1%) | +4.4pt |
The revenue growth rate exceeds the industry median but falls just short of the upper IQR of 10.1%, placing the company in the upper group within the industry.
※Source: Compiled by the company
Both the gross profit margin and Operating Income margin have improved structurally (gross profit margin +2.0pt, Operating Income margin +2.4pt), primarily due to the improvement in the gross profit margin on completed construction contracts (13.2%→17.7%). The key focus going forward will be whether this improvement is temporary, driven by project mix, or attributable to sustainable cost management.
Full-year progress for both Operating Income and Net Income exceeds the standard progress rate, while the company has maintained its forecasts. In particular, the Net Income progress rate of 32.3% is higher than that of the other indicators, reflecting non-operating factors such as the return of equity-method investment gains to profitability.
In addition to the widening loss in the Overseas Business, working capital movements are evident, including a decrease in trade payables related to construction despite an increase in advances received on construction contracts in progress. This indicates a timing mismatch between earnings growth and cash generation.
This is a mechanically calculated reference range based solely on publicly disclosed data using a residual income model (Ohlson-type model with an explicit 5-year fade). It is not a forecast of the market share price or a recommendation of any specific investment action.
| Scenario | Theoretical Share Price |
|---|---|
| bear | ¥2,297 |
| base | ¥2,382 |
| bull | ¥2,445 |
| Calculation Assumption | Value |
|---|---|
| Book value per share (BPS) | ¥2,155 |
| Adjusted forecast EPS | ¥278.3 |
| Cost of equity r | 9.27% (10-year Japanese government bond 2.77% + equity risk premium 6.00% + size premium 0.50%) |
| Persistence coefficient of residual income ω / explicit forecast period | 0.62 / 5 years |
| Assumed Payout Ratio | 40.1% |
| Forecast EPS confidence adjustment | ×1.117 (based on the actual guidance achievement rate of comparable companies in the same industry) |
| Implied PBR / PER |
Sensitivity: ¥2,316–¥2,452 at cost of equity ±1%, and ¥2,377–¥2,391 at ω±0.1.
Notes:
(Calculation model: Residual Income Model / Interest rate reference month: 2026-07 / This value does not forecast or guarantee the future share price)
This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It is not a recommendation to invest in any specific security. The industry benchmarks are reference information compiled by the company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, after consulting with a professional as necessary.
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| 1.11x / 8.6x |