ASUA Inc. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥362M
• Operating Income: ¥23M
• Net Income: ¥16M
• EPS: ¥6.29

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

For FY2026 Q1, 株式会社アスア reported revenue of ¥362.0m, down a modest 0.4% YoY, indicating broadly stable topline conditions. Gross profit of ¥152.7m translates to a gross margin of 42.2%, suggesting healthy pricing and cost control at the gross level. Despite resilient gross margins, operating income fell sharply to ¥23.0m (-49.0% YoY), implying significant operating deleveraging and/or higher SG&A relative to revenue. Ordinary income matched operating income at ¥23.0m, indicating limited non-operating gains or losses in the quarter. Net income was ¥16.0m, up 181.5% YoY, which likely reflects an unusually low prior-year base and potential tax or non-recurring effects; the mismatch between operating profit decline and net profit surge warrants caution in interpreting underlying earnings momentum. The computed net margin is 4.42%, and the DuPont bridge (NPM 4.42% × asset turnover 0.259 × leverage 1.39) yields an ROE of 1.59% for the quarter. Balance sheet strength is notable: total assets of ¥1.40bn and equity of ¥1.009bn imply an equity ratio around 72%, despite the reported equity ratio metric being shown as 0.0% (not disclosed). Liquidity appears robust with a current ratio of 303% and working capital of ¥713.6m, pointing to a comfortable short-term funding position. Financial leverage is conservative, with total liabilities to equity at 0.39x and interest expense of only ¥0.503m; interest coverage is a high 45.7x based on operating income, signaling low refinancing risk. Operating cash flow and other cash flow items are not disclosed this quarter, limiting assessment of earnings-to-cash conversion. Depreciation and amortization are not reported, so EBITDA-related analyses are not meaningful this period. EPS is ¥6.29 for the quarter, but the share count and book value per share are not disclosed, constraining per-share and valuation diagnostics. The effective tax rate metric is shown as 0.0%, but there is a non-zero tax expense line, suggesting data-mapping limitations in the pre-computed metric; tax normalization remains an analytical uncertainty. Overall, the company combines solid gross profitability and a strong balance sheet with near-term pressure at the operating income level. Given the small revenue contraction and sharp drop in OI, focus should be on SG&A discipline and operating leverage recovery in subsequent quarters. Data gaps—particularly cash flow statements, depreciation, and share data—necessitate cautious interpretation of capital efficiency and payout capacity.

Profitability Analysis

ROE is 1.59% for the quarter, decomposed as net margin 4.42% × asset turnover 0.259 × financial leverage 1.39. Operating margin is approximately 6.35% (OI of ¥23.0m on revenue of ¥362.0m), down significantly YoY given the 49% decline in operating income against largely flat revenue. The gross margin of 42.2% is healthy, implying core unit economics remain intact; the margin compression seems to stem from operating expenses rather than cost of sales. With ordinary income equal to operating income, non-operating items were not a swing factor. Interest burden is negligible (¥0.503m), evidenced by interest coverage of 45.7x, so financing costs did not drive the margin change. The net margin of 4.42% is acceptable for a small-cap services-type profile but masks volatility between OI and NI; tax and non-recurring items may have contributed to the YoY NI increase. Given D&A is not disclosed, EBITDA-based assessments and operating cash proxy measures cannot be reliably computed. Overall margin quality at the gross level is solid, but operating leverage worked negatively this quarter, indicating higher fixed cost intensity or elevated discretionary spend (e.g., hiring, marketing, development) relative to sales.

Growth Assessment

Revenue declined slightly by 0.4% YoY to ¥362.0m, indicating a stable demand environment with no apparent structural contraction. Operating income fell 49.0% YoY, signaling a pronounced deterioration in operating leverage and/or cost base inflation not offset by pricing. Net income increased 181.5% YoY to ¥16.0m, likely due to a low prior-year base and potential tax or below-the-line effects rather than improved core operations. The asset turnover of 0.259 for the quarter is consistent with a low-capital-intensity, services-oriented model but suggests limited throughput on the current asset base. Sustainability of revenue appears intact near-term given minimal YoY slippage, but profit quality is weakened by SG&A pressure. Without order/backlog data, visibility on future quarters is limited; watch for sequential recovery in operating margin as a signal of cost normalization. YoY profit dispersion between OI and NI underscores the need to examine tax effects and any non-recurring items once disclosures become available. Outlook hinges on the company’s ability to manage fixed costs and convert stable gross margin into operating profit; even modest revenue growth could restore OI if SG&A is contained.

Financial Health

Total assets are ¥1.40bn and total equity is ¥1.009bn, implying an equity ratio of roughly 72% (computed), despite the reported metric being undisclosed. Total liabilities are ¥394.4m, with current liabilities of ¥351.5m; leverage is low at 0.39x liabilities-to-equity. Liquidity is strong: current ratio 303% and quick ratio shown as the same due to undisclosed inventories, indicating ample near-term headroom. Working capital is ¥713.6m, further reinforcing liquidity. Interest expense is minimal at ¥0.503m and is well covered by operating income (45.7x), suggesting minimal solvency risk under current operations. Absent cash and cash flow disclosures, absolute cash buffers and liquidity sources cannot be quantified, but the large current asset base relative to current liabilities is reassuring. Capital structure appears conservative and well-suited to absorb earnings volatility.

Cash Flow Quality

Operating cash flow, investing cash flow, and financing cash flow are not disclosed this quarter, so earnings-to-cash conversion cannot be assessed. The OCF/Net Income metric shown as 0.00 reflects non-disclosure rather than true zero cash generation. Free cash flow cannot be computed without OCF and capex (D&A is also not reported, limiting capex proxy analysis). Working capital stands at ¥713.6m; without component details (receivables, payables, inventories), we cannot evaluate cash tied up or released in the period. Given operating income compression alongside stable gross margin, monitoring whether receivables collection is timely and whether payables terms are changing will be important once cash flow data is available. Overall, cash flow quality is indeterminable this quarter due to data gaps.

Dividend Sustainability

Annual DPS and payout ratio are shown as 0.00, which likely reflects non-disclosure for the period rather than confirmed zero distributions. EPS is ¥6.29 for Q1, but without declared dividends, share count, or cash flow data, payout capacity cannot be reliably assessed. Free cash flow coverage of dividends cannot be calculated in the absence of OCF and capex data. The balance sheet’s strong equity base and low leverage would generally support future distributions if cash generation is adequate, but near-term operating profit pressure argues for prudence. Policy outlook is unclear from the data provided; investors should refer to company guidance on dividend policy or shareholder return frameworks.

Risk Assessment

Business Risks:

• Operating leverage sensitivity: sharp OI decline on flat revenue indicates high fixed cost exposure.
• Cost inflation (labor and SG&A) potentially outpacing pricing power.
• Revenue concentration or project timing risk typical of small-cap service models (not disclosed but plausible).
• Execution risk in restoring operating margin while maintaining growth.
• Limited disclosure (e.g., cash flows, D&A) constrains transparency.

Financial Risks:

• Earnings volatility with tax effects causing divergence between OI and NI.
• Cash conversion risk not assessable due to missing OCF; potential working capital swings.
• Small absolute scale may amplify sensitivity to credit terms and collection cycles.
• Interest rate exposure is modest but present; interest coverage currently strong.

Key Concerns:

• 49% YoY drop in operating income despite stable revenue.
• Unclear effective tax rate and below-the-line impacts affecting net income comparability.
• Absence of cash flow and depreciation data impeding assessment of earnings quality and capex needs.

Investment Implications

Key Takeaways:

• Topline is stable (-0.4% YoY) but operating profitability compressed sharply.
• Gross margin remains strong at 42.2%, indicating intact core unit economics.
• Balance sheet is conservative with an estimated ~72% equity ratio and low leverage (0.39x).
• Interest burden is minimal; coverage at 45.7x reduces solvency risk.
• Cash flow quality cannot be evaluated this quarter due to non-disclosure.
• Net income growth (+181.5% YoY) likely reflects non-operational factors; core earnings trend is weaker.

Metrics to Watch:

• Operating margin and SG&A-to-sales ratio recovery in upcoming quarters.
• Sequential revenue growth and order/backlog indicators (if available).
• Gross margin stability as a proxy for pricing and mix.
• Effective tax rate normalization and any one-off items.
• Working capital metrics (DSO/DPO) and OCF/NI once disclosed.
• Leverage and liquidity: current ratio, cash balance, and interest coverage.

Relative Positioning: Relative to domestic small-cap business services peers, the company exhibits strong gross margins and a conservative balance sheet but currently weaker operating leverage, placing it as financially solid yet operationally pressured in the near term.

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