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 | ¥355.1B | ¥306.3B | +15.9% |
| Operating Income | ¥9.6B | ¥19.7B | -51.6% |
| Ordinary Income | ¥14.6B | ¥23.6B | -38.1% |
| Net Income | ¥27.4B | ¥15.8B | +73.5% |
| ROE | 3.4% | 1.9% | - |
While Revenue achieved double-digit growth, core earnings declined significantly due to deteriorating construction project profitability, while Net Income was boosted by a one-time gain on the sale of investment securities. Revenue was ¥355.1B (+15.9% YoY), Operating Income was ¥9.6B (-51.6%), and Ordinary Income was ¥14.6B (-38.1%). The primary factor was the decline in the gross profit margin on completed construction contracts to 11.3% from 15.0% in the same period of the previous year. Net Income increased substantially to ¥27.4B (+73.5%), but its dependence on the one-time gain on the sale of investment securities of ¥26.8B is high.
【Revenue】Revenue increased 15.9% YoY to ¥355.1B. The Company operates in a single segment, the Facilities Construction Business, and the increase in completed construction revenue drove overall performance. Costs on uncompleted construction contracts increased to ¥29.6B (+22.5%), reflecting progress on construction projects in progress.
【Profit and Loss】Gross profit on completed construction contracts was ¥40.0B, with the gross profit margin declining to 11.3% from 15.0% in the previous year, a decrease of approximately 378bp. As the SG&A expense ratio was maintained at 8.6%, broadly in line with the previous year, the deterioration in the gross profit margin translated directly into a decline in the Operating Income margin to 2.7% from 6.4%. Operating Income was ¥9.6B (-51.6%), and Ordinary Income was ¥14.6B (-38.1%), indicating a significant deterioration in the profitability of the core business. Meanwhile, the recognition of a ¥26.8B gain on the sale of investment securities as extraordinary income increased Profit Before Tax to ¥41.4B, resulting in Net Income of ¥27.4B (+73.5%). In conclusion, the Company achieved higher revenue but lower profit, while the increase in Net Income was attributable to a one-time factor.
The Group operates in a single business segment, the Facilities Construction Business, and disclosure of segment information has been omitted due to its lack of materiality.
【Profitability】The Operating Income margin declined significantly to 2.7% from 6.4% in the previous year, while the gross profit margin on completed construction contracts also deteriorated to 11.3% from 15.0%. In contrast, the Net Income margin appeared to improve to 7.7% from 5.2%, but this was attributable to the one-time gain on the sale of investment securities of ¥26.8B and should be evaluated separately from the profitability of the core business.【Cash Flow Quality】Comprehensive Income was ¥15.4B, below Net Income of ¥27.4B, mainly due to other securities valuation differences of negative ¥13.2B.【Investment Efficiency】ROE was 3.4%, and the total asset turnover ratio was 0.291, remaining at levels reflecting the order intake and work-in-progress structure of the construction industry.【Financial Soundness】The Equity Ratio remained high at 66.3% (60.9% in the previous year). Current assets of ¥886.4B compared with Current Liabilities of ¥373.7B indicate ample liquidity. Long-term borrowings were ¥2.3B, and interest-bearing debt was extremely small, resulting in conservative financial leverage.
As the cash flow statement has not been disclosed, funding trends are analyzed based on changes in the balance sheet. Cash and deposits were ¥186.9B, down from ¥233.4B at the end of the previous year, potentially reflecting the collection of accounts receivable from completed construction contracts and tax payments. Accounts receivable from completed construction contracts declined to ¥550.1B from the previous year, while construction accounts payable also decreased to ¥233.9B, indicating an improving trend in net working capital. Investment securities were ¥273.3B, down from ¥295.7B in the previous year, and the sale of a portion of these securities contributed to the recognition of the ¥26.8B gain on the sale of investment securities. Overall, while partial asset reduction and working capital improvement progressed, the cash balance declined.
When recurring earnings power and one-time items are clearly separated, the extraordinary income of ¥26.8B stands out against Operating Income of ¥9.6B, indicating that Net Income of ¥27.4B is highly dependent on a one-time factor. Non-operating income was ¥5.3B, equivalent to approximately 1.5% of Revenue, primarily consisting of dividend income of ¥4.5B. The divergence between the Operating Income margin of 2.7% and the Net Income margin of 7.7% was attributable to the contribution from the gain on the sale of investment securities, and its sustainability is considered limited. In addition, Comprehensive Income of ¥15.4B was below Net Income of ¥27.4B, due to other securities valuation differences of negative ¥13.2B. This divergence indicates that fluctuations in the market prices of held securities have a significant impact on net assets.
Progress toward the Full-Year plan (Revenue of ¥160.0B, Operating Income of ¥16.0B, and Ordinary Income of ¥16.5B) was 22.2% for Revenue, 6.0% for Operating Income, and 8.9% for Ordinary Income. Progress at the operating level was therefore significantly below the standard quarterly progress rate of 25%. Net Income progress was 21.4% (against the Full-Year forecast of ¥12.8B), broadly in line with the standard rate, but this was attributable to dependence on extraordinary income. Even taking into account the tendency for profit recognition to be concentrated in the second half due to seasonality in the construction industry, improvement in the gross profit margin will be key to achieving the Full-Year plan.
The annual dividend forecast is ¥120, resulting in a Payout Ratio of approximately 42.6% against the company-plan-based EPS of ¥281.5. Given the financial foundation of an Equity Ratio of 66.3% and long-term borrowings of ¥2.3B, dividend stability is considered high. However, Net Income in Q1 was dependent on the one-time gain on the sale of investment securities. If this is not accompanied by a recovery in core earnings power, the potential for future dividend increases may be limited. No disclosure regarding share buybacks has been identified.
Construction project profitability deterioration risk: The gross profit margin on completed construction contracts declined to 11.3% from 15.0% in the previous year, a decrease of approximately 378bp, indicating that increases in materials and labor costs and changes in the project mix are weighing on profit. The provision for losses on construction contracts also increased to ¥1.8B from ¥1.2B in the previous year, up +50.4%, with signs of deteriorating profitability also evident in the financial figures.
Earnings quality risk: The ¥26.8B gain on the sale of investment securities accounted for a substantial portion of Profit Before Tax of ¥41.4B, while Operating Income of ¥9.6B represented only 6.0% progress toward the Full-Year plan. If the recovery in core earnings is delayed, this may affect achievement of the Full-Year earnings forecast.
Valuation fluctuation risk for held securities: The Company holds investment securities of ¥273.3B, and Comprehensive Income was below Net Income due to other securities valuation differences of negative ¥13.2B. The Company’s structure is such that fluctuations in market prices affect net assets and equity capital.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Income margin | 2.7% | 4.5% (2.7%–6.6%) | -1.8pt |
| Net Income margin | 7.7% | 3.8% (-1.1%–4.4%) | +3.9pt |
The Operating Income margin is below the industry median, while the Net Income margin exceeds the industry median due to the impact of the one-time extraordinary income.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue growth rate (YoY) | 15.9% | 4.8% (3.4%–10.1%) | +11.1pt |
The Revenue growth rate is high within the industry, and top-line expansion is significantly above the industry average.
※Source: Company analysis
The top line achieved double-digit growth of +15.9% YoY, but Operating Income declined sharply by -51.6% as the gross profit margin on completed construction contracts fell to 11.3% from 15.0%. The fact that revenue expansion has not translated into improved profitability is a structural characteristic apparent from the financial results data.
The increase in Net Income to ¥27.4B (+73.5%) was heavily dependent on the ¥26.8B gain on the sale of investment securities. Progress rates for Operating Income and Ordinary Income (6.0% and 8.9% against the Full-Year plan) are clearly behind the 21.4% progress rate for Net Income. This difference indicates that the increase in profit for the current period resulted from asset sales rather than improvement in the core business.
The financial foundation, comprising an Equity Ratio of 66.3% and long-term borrowings of ¥2.3B, is robust, and the current ratio is also high. While the high level of financial soundness supports investment capacity for future profitability improvement, enhancing the profitability of invested capital remains an issue to be monitored.
This is a reference range mechanically calculated solely from 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 | 2,094円 |
| base | 2,195円 |
| bull | 2,268円 |
| Calculation Assumption | Value |
|---|---|
| Book value per share (BPS) | 1,781円 |
| Adjusted forecast EPS | 314.4円 |
| Cost of equity capital r | 9.77%（10-year Japanese government bond 2.77% + equity risk premium 6.00% + size premium 1.00%） |
| Persistence parameter for residual income ω / explicit forecast period | 0.62 / 5 years |
| Assumed Payout Ratio | 42.6% |
| Forecast EPS confidence adjustment | ×1.117（based on the historical guidance achievement rate of companies in the same industry） |
| implied PBR / PER |
Sensitivity: 2,134円–2,258円 at ±1% for the cost of equity capital, and 2,185円–2,210円 at ±0.1 for ω.
Notes:
（Calculation model: Residual income model / Interest rate reference month: 2026-07 / This value does not predict or guarantee the future share price）
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not recommend investment 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, and after consulting a professional advisor as necessary.
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| 1.23x / 7.0x |