| Metric | Current Period | Same Period Last Year | YoY |
|---|---|---|---|
| Revenue | ¥7.87B | ¥6.48B | +21.5% |
| Operating Income | ¥0.52B | ¥-0.34B | +253.2% |
| Ordinary Income | ¥1.43B | ¥0.52B | +177.9% |
| Net Income | ¥1.06B | ¥0.26B | +314.4% |
| ROE | 2.5% | 0.6% | - |
Supported by the expansion of CRO Business engagements and improved profitability, operating income turned positive from the loss recorded in the same period of the previous year, resulting in higher revenue and earnings. Revenue was ¥7.868B (+21.5% year on year), operating income was ¥0.521B (a loss of ¥0.340B in the same period of the previous year), ordinary income was ¥1.433B (+177.9%), and net income attributable to owners of the parent (hereinafter the same) was ¥1.064B (+308.8%). The main driver of revenue growth was the expansion of projects in the core CRO Services business (+21.9% in revenue), while earnings growth reflected improved profitability in that business as well as contributions from non-operating income, including equity-method investment income and foreign exchange gains.
【Revenue】Revenue increased 21.5% year on year to ¥7.868B. By segment, the core CRO Services business accounted for ¥7.54B (95.8% of total revenue, +21.9% year on year), driving growth. Medipolis generated ¥0.24B (+12.8%), TranslationalResearch generated ¥0.06B (+26.9%), and US Asset Management generated ¥0.05B (+13.7%), each recording revenue growth despite their small scale. Only the Other category recorded lower revenue, at ¥0.11B (-26.0%).
【Profit and Loss】Operating income was ¥0.521B, turning positive from a loss of ¥0.340B in the same period of the previous year. The operating margin improved to 6.6% (previous year: -5.3%), as operating leverage took effect through an improvement in the gross margin to 51.4% (previous year: 47.4%) and a decline in the SG&A ratio to 44.8% (previous year: 52.7%). Ordinary income was ¥1.433B (+177.9%), supported by equity-method investment income of ¥0.831B and foreign exchange gains of ¥0.172B. Extraordinary losses were limited to a ¥0.026B loss on disposal of fixed assets, indicating a minimal impact from one-time factors. Net income was ¥1.064B (+308.8%), and the effective tax rate was 24.5%. The Company recorded higher revenue and earnings.
The core CRO Services business generated revenue of ¥7.54B (+21.9%) and operating income of ¥1.54B (doubling from ¥0.77B in the previous year, +100.0%), with its margin improving to 20.4% (previous year: 12.4%), making it the primary contributor to consolidated earnings. TranslationalResearch generated revenue of ¥0.06B (+26.9%) but recorded an operating loss of ¥0.97B (the loss narrowed 12.3% from the ¥1.10B loss in the previous year), with research investment suppressing the Company-wide profit margin. Medipolis generated revenue of ¥0.24B (+12.8%) and operating income of ¥0.02B (-51.6%), resulting in a lower margin. US Asset Management generated revenue of ¥0.05B (+13.7%) and recorded an operating loss of ¥0.03B (the loss widened 20.9% year on year). The Other category recorded lower revenue of ¥0.11B (-26.0%) but operating income of ¥0.02B (+517.9%). While improved profitability in CRO Services lifted the Company-wide profit margin, continued losses in TranslationalResearch served as an offsetting factor.
【Profitability】The operating margin improved 11.9pt to 6.6% from -5.3% in the previous year, while the net profit margin improved 9.5pt to 13.5% from 4.0%. The gross margin increased to 51.4% (previous year: 47.4%), while the SG&A ratio declined to 44.8% (previous year: 52.7%). 【Cash Flow Quality】Comprehensive income was -¥0.116B, significantly diverging from net income of ¥1.064B. The primary factor was a decline of -¥1.90B in valuation differences on securities held, partially offset by foreign currency translation adjustments of +¥0.67B. 【Investment Efficiency】ROE was 2.5% (previous year: 0.6%), EPS was ¥25.55 (previous year: ¥6.25), and BPS was ¥1,002.40 (previous year: ¥1,035.76, -3.2%). 【Financial Soundness】The equity ratio was 41.6% (previous year: 41.0%), the current ratio was 101.7%, and the quick ratio was 58.1%. Interest-bearing debt was ¥36.86B, the Debt/Capital ratio was 46.6%, and interest coverage was 4.87x.
Cash and deposits totaled ¥14.33B, down 22.7% from ¥18.54B in the same period of the previous year, indicating a reduced liquidity cushion. In terms of working capital, inventories increased to ¥17.21B (previous year: ¥15.11B, +13.9%), while accounts payable declined to ¥0.26B (previous year: ¥0.41B, -35.2%), creating an additional cash outflow factor on the payments side. Short-term borrowings were broadly flat at ¥19.57B (previous year: ¥19.67B), while long-term borrowings declined to ¥17.29B (previous year: ¥21.12B, -18.2%), indicating progress in debt repayment. Given the concurrent decline in cash balances and reduction in long-term borrowings, funds during the period appear to have been allocated to debt repayment and inventory accumulation.
The core of recurring earnings power is operating income of ¥0.521B. However, non-operating income of ¥1.073B (13.6% of revenue) made a substantial contribution to the increase in ordinary income to ¥1.433B. This consisted primarily of equity-method investment income of ¥0.831B and foreign exchange gains of ¥0.172B. Extraordinary items were limited to extraordinary income of ¥0.001B and an extraordinary loss of ¥0.026B (loss on disposal of fixed assets), indicating limited distortion from one-time factors. Compared with ordinary income of ¥1.433B, pretax income was ¥1.408B and net income was ¥1.064B, resulting in an effective tax rate of 24.5%, within the normal range. The fact that net income exceeded operating income by ¥0.543B indicates that contributions from the relatively non-recurring equity-method and foreign exchange items boosted net income, and earnings volatility could increase if these items reverse. Comprehensive income was -¥0.116B, significantly diverging from net income, primarily due to the decline in valuation differences on securities held.
The full-year plan calls for revenue of ¥38.00B, operating income of ¥3.00B, ordinary income of ¥6.00B, EPS of ¥84.07, and a dividend of ¥50.00. As of Q1, progress rates were 20.7% for revenue, 17.4% for operating income, and 23.9% for ordinary income; compared with a simple pro-rata benchmark of 25%, revenue and operating income were somewhat behind schedule. Conversely, progress toward net income (the Company forecast: ¥3.50B) was ahead at 30.4%, reflecting contributions from non-recurring non-operating income such as equity-method investment income and foreign exchange gains. The earnings forecast was revised during the quarter, while the dividend forecast was not revised.
The full-year dividend forecast is ¥50.00 per share, representing an increase from the previous fiscal year’s actual dividend of ¥20.00. Based on the number of shares outstanding, total dividends are approximately ¥2.08B, resulting in a payout ratio of approximately 59.5% against the Company’s forecast net income of ¥3.50B. Cash and deposits were ¥14.33B, down 22.7% year on year. From the perspective of dividend funding, it is therefore meaningful to monitor trends in cash balances together with progress in operating income, which stood at 17.4% of the full-year forecast.
Business Segment Concentration: CRO Services accounts for 95.8% of revenue (¥7.54B/¥7.868B), creating a structure in which demand trends and project utilization in this business have a significant impact on overall performance.
Lengthening Working Capital Turnover Period: The inventory turnover period has reached approximately 411 days (approximately 13.5 months), while the receivables turnover period is approximately 83 days (approximately 2.7 months). The cash conversion cycle has lengthened to approximately 488 days (approximately 16 months).
Short-Term Liquidity: The quick ratio is 58.1%. Against short-term borrowings of ¥19.57B, cash and deposits are only ¥14.33B (cash/short-term borrowings of 0.73x), making continued careful liquidity management important.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 6.6% | 8.1% (2.3%–15.9%) | -1.4pt |
| Net Profit Margin | 13.5% | 5.9% (1.6%–10.7%) | +7.6pt |
The operating margin is slightly below the industry median, while the net profit margin is significantly above the industry median, indicating a high degree of reliance on non-operating income.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 21.5% | 9.3% (0.4%–16.9%) | +12.2pt |
The revenue growth rate is above both the industry median and the upper quartile.
※Source: Compiled by the Company
Revenue and earnings growth in CRO Services (revenue +21.9%, operating income +100.0%, margin 20.4%) drove the Company-wide return to operating profitability, indicating progress in improving the profitability of the core business.
The significant increases in ordinary income and net income indicate a high degree of reliance on non-operating factors, namely equity-method investment income (¥0.831B) and foreign exchange gains (¥0.172B). Together with the operating margin of 6.6%, this underscores the importance of examining the composition of earnings.
The lengthening inventory turnover period (approximately 13.5 months) and decline in cash balances (-22.7%) warrant attention from the perspective of future cash-generation capacity.
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 to take any specific investment action.
| Scenario | Theoretical Share Price |
|---|---|
| bear | ¥959 |
| base | ¥976 |
| bull | ¥996 |
| Calculation Assumption | Value |
|---|---|
| Book Value per Share (BPS) | ¥1,002 |
| Adjusted Forecast EPS | ¥88.2 |
| Cost of Equity r | 9.77% (10-year government bond 2.77% + equity risk premium 6.00% + size premium 1.00%) |
| Residual Income Persistence Factor ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 59.5% |
| Forecast EPS Confidence Adjustment | ×1.049 (based on the historical guidance achievement rate of companies in the same industry) |
| Implied PBR / PER |
Sensitivity: ¥950–¥1,003 at ±1% for the cost of equity, and ¥975–¥976 at ±0.1 for ω.
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 through analysis of 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 discretion and responsibility, after consulting a professional advisor as necessary.
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| 0.97x / 11.1x |
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.