Soiken Holdings Inc. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥1.42B
• Operating Income: ¥127M
• Net Income: ¥-290M
• EPS: ¥3.21

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment 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

Soken Holdings (総医研ホールディングス) reported FY2026 Q1 consolidated results under JGAAP with modest top-line growth and stable operating profit. Revenue was ¥1,415 million (+1.6% YoY), gross profit ¥668.6 million, and operating income ¥127 million (flat YoY), indicating limited operating leverage in the quarter. Ordinary income of ¥133 million exceeded operating income, implying net non-operating gains. Net income was ¥83 million (flat YoY), translating to a net margin of 5.9%. Gross margin remained solid at 47.3%, while the operating margin stood at 9.0%, reflecting substantial SG&A investment. Based on the figures, SG&A is inferred at approximately ¥541.6 million, or 38.3% of sales, which absorbed most of the gross profit increase. The DuPont decomposition yields ROE of 1.39%, driven by a 5.87% net margin, low asset turnover of 0.208x, and modest leverage of 1.14x. The balance sheet is conservative: total assets were ¥6.79 billion, liabilities ¥0.78 billion, and equity ¥5.98 billion, implying an equity ratio of about 88% (management’s equity ratio item is undisclosed). Liquidity is very strong with a current ratio of 8.7x and working capital of ¥5.84 billion, suggesting ample buffer for operations. Asset turnover is low versus sales scale, indicating a large liquid asset base and/or slow-turning receivables relative to revenue. Cash flow statements and key items such as depreciation, interest expense, and cash balance are undisclosed (zeros reflect non-disclosure, not actual zero), limiting cash flow quality analysis this quarter. Dividend data indicates DPS of ¥0.00 and a payout ratio of 0%, consistent with a reinvestment stance or timing within the fiscal year, but this may also reflect disclosure timing. Overall, profitability is steady but not accelerating, with cost discipline a focal point to convert modest revenue growth into higher operating profit. The company’s conservative capital structure reduces financial risk, but low ROE points to efficiency headwinds that require improved turnover or margin expansion. Key watchpoints are SG&A control, gross margin stability, and evidence of operating leverage as volumes scale. Given data limitations on cash flows and share data, conclusions are based on available P/L and balance sheet items and may be refined when full disclosures are available.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 5.87% (NI ¥83m / Sales ¥1,415m)
• asset_turnover: 0.208x (Sales ¥1,415m / Assets ¥6,794m)
• financial_leverage: 1.14x (Assets ¥6,794m / Equity ¥5,984m)
• calculated_ROE: 1.39% (matches reported DuPont ROE) margin_quality:
• gross_margin: 47.3% (¥668.6m GP / ¥1,415m sales), resilient
• operating_margin: 9.0% (¥127m OP / ¥1,415m sales), flat YoY with limited operating leverage
• ordinary_margin: 9.4% (¥133m / ¥1,415m), modest non-operating gains
• net_margin: 5.9% (¥83m / ¥1,415m), impacted by below-the-line items operating_leverage: Revenue grew +1.6% YoY while operating income was flat, implying negative mix/price or higher fixed costs in SG&A offsetting gross profit gains. Inferred SG&A was ~¥541.6m (38.3% of sales; ~81% of gross profit). To expand margin, the company needs either stronger top-line growth or tighter SG&A control. other_notes: Depreciation and interest are undisclosed; EBITDA and interest coverage cannot be assessed from the provided data.

Growth Assessment

revenue_sustainability: Low-single-digit growth (+1.6% YoY) suggests a stable but not rapidly expanding demand environment. Sustainability depends on product mix, pricing power, and channel performance (including overseas/EC if applicable). profit_quality: Gross margin is healthy, but flat OP on rising sales points to cost pressure in SG&A or adverse mix. Ordinary income exceeding OP indicates some recurring non-operating income; durability is unclear. outlook: Near-term earnings trajectory will hinge on realizing operating leverage. With strong liquidity and low leverage, the company has capacity to invest in growth; however, low asset turnover and low ROE indicate efficiency improvements are needed to lift returns.

Financial Health

liquidity:

• current_assets: ¥6,597.3m
• current_liabilities: ¥756.2m
• current_ratio: 8.72x
• quick_ratio: 8.72x (inventories undisclosed)
• working_capital: ¥5,841.1m solvency_capital_structure:
• total_assets: ¥6,794.0m
• total_liabilities: ¥775.2m
• total_equity: ¥5,984.0m
• equity_ratio_estimated: ≈88.1% (based on disclosed assets and equity; equity ratio item itself is undisclosed)
• debt_to_equity: 0.13x (using total liabilities/equity as a proxy) commentary: The balance sheet is conservative with substantial equity and liquidity. Low leverage reduces financial risk but suppresses ROE absent higher turnover or margins.

Cash Flow Quality

earnings_quality: OCF is undisclosed this quarter; the OCF/NI ratio shown as 0.00 reflects non-disclosure, not cash burn. Therefore, we cannot corroborate earnings with cash conversion. FCF_analysis: Capex and investing cash flows are undisclosed; FCF cannot be derived. High working capital and cash balances may exist but are not visible in the provided CF data. working_capital_dynamics: Current assets are large relative to sales (asset turnover 0.208x). Without AR and inventory detail, it is unclear whether liquidity is held in cash or tied up in receivables/advances. Monitoring receivable days, inventory days, and payables days upon disclosure will be important.

Dividend Sustainability

payout_ratio_assessment: DPS is shown as ¥0.00 with a payout ratio of 0%. This could indicate no dividend declared for the quarter or lack of disclosure timing; we cannot confirm a policy change from this snapshot. FCF_coverage: Not assessable due to undisclosed OCF and capex; the FCF coverage figure of 0.00x reflects non-disclosure. policy_outlook: Given low ROE (1.39%) and the need to improve efficiency, retaining earnings for growth/optimization appears reasonable. Any future payouts should be assessed against demonstrated sustainable FCF and maintenance of the strong balance sheet.

Risk Assessment

Business Risks:

• Slower-than-expected sales growth leading to limited operating leverage
• Gross margin pressure from input cost inflation and product mix shifts
• Regulatory and labeling risks for healthcare/functional products (e.g., FFC/FOSHU claims)
• Customer and channel concentration risk, including exposure to specific EC platforms or distributors
• Overseas demand volatility and FX exposure if cross-border sales are material
• Innovation and pipeline execution risk for new product launches

Financial Risks:

• Low asset turnover depressing ROE despite a strong equity base
• Potential working capital build-up (receivables, advances) if collection cycles lengthen
• Earnings reliance on non-operating items if ordinary income continues to exceed operating income
• Limited visibility on cash generation due to undisclosed OCF and capex

Key Concerns:

• Flat operating income despite revenue growth indicates cost absorption in SG&A
• Low ROE (1.39%) versus typical cost of equity for small-cap healthcare/consumer peers
• Insufficient disclosure on cash flow metrics this quarter impedes assessment of earnings quality

Investment Implications

Key Takeaways:

• Top-line grew modestly (+1.6% YoY) with stable operating income, signaling subdued operating leverage
• Healthy gross margin (47.3%) but SG&A intensity (~38.3% of sales) caps operating margin at ~9%
• ROE is low at 1.39% due to low turnover (0.208x) and minimal leverage
• Balance sheet strength is notable: equity ratio ~88% and current ratio 8.7x
• Cash flow and capex are undisclosed; FCF outlook cannot be assessed from this data

Metrics to Watch:

• SG&A-to-sales ratio and operating margin trajectory
• Gross margin stability and input cost trends
• Asset turnover and working capital days (AR, inventory, AP) once disclosed
• Gap between operating and ordinary income to gauge non-operating reliance
• Order visibility/backlog and channel performance (domestic vs. overseas/EC, if relevant)
• Disclosure of OCF and capex to assess FCF generation

Relative Positioning: Within small-cap healthcare/functional products peers on the TSE, the company exhibits stronger balance sheet conservatism and liquidity but lags on capital efficiency (ROE) due to low asset turnover and modest growth; sustaining gross margins while tightening SG&A could improve its relative profitability profile.

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