| Indicator | Current Period | Same Period Last Year | YoY |
|---|---|---|---|
| Revenue | ¥24.9B | ¥25.3B | -1.6% |
| Operating Income | ¥1.3B | ¥2.3B | -43.3% |
| Ordinary Income | ¥1.1B | ¥2.3B | -53.9% |
| Net Income | ¥0.7B | ¥1.5B | -54.9% |
| ROE | 4.8% | 10.5% | - |
FY2026 Q3 results showed Revenue of ¥24.9B (YoY -¥0.4B -1.6%), roughly flat, while Operating Income was ¥1.3B (YoY -¥1.0B -43.3%), Ordinary Income ¥1.1B (YoY -¥1.2B -53.9%), and Net Income ¥0.7B (YoY -¥0.8B -54.9%), indicating a significant decline in profitability. The operating margin was 5.2%, narrowing by 3.9 points from 9.1% in the same period last year. The main drivers of the earnings decline were the fixed cost burden of SG&A at ¥6.4B and the recording of non-operating expenses of ¥0.3B. On the financial front, with total assets of ¥20.4B and net assets of ¥14.1B, the financial base remains stable; however, the Payout Ratio of 127.9% significantly exceeds the profit level, raising concerns about the sustainability of the dividend policy. The full-year outlook forecasts Revenue of ¥40.0B (YoY +17.9%), Operating Income of ¥4.0B (YoY +21.5%), and Net Income of ¥2.4B, embedding a plan for a substantial improvement in Q4.
[Profitability] ROE 4.8% (down from the same period last year), operating margin 5.2% (down -3.9pt from 9.1% in the same period last year), net margin 2.7% (Net Income ¥0.7B against Revenue ¥24.9B), gross margin 31.0%. [Cash Quality] Cash and deposits ¥14.1B (69.1% of total assets of ¥20.4B), short-term liability coverage 5.2x (cash and deposits ¥14.1B/current liabilities ¥2.7B), indicating extremely strong liquidity. [Investment Efficiency] Total asset turnover 1.22x (Revenue ¥24.9B/total assets ¥20.4B). [Financial Soundness] Equity Ratio 69.0% (net assets ¥14.1B/total assets ¥20.4B), current ratio 518.2% (current assets ¥19.3B/current liabilities ¥3.7B), debt-to-equity ratio 0.45x, interest-bearing debt at an extremely low level of ¥0.1B, financial leverage 1.45x. Working capital is ¥15.6B, indicating ample headroom.
Cash and deposits decreased by ¥0.3B from ¥14.4B at the end of the previous fiscal year to ¥14.1B, but remain at a high level. In terms of working capital efficiency, accounts receivable declined by ¥0.5B from ¥4.6B in the same period last year to ¥4.1B, confirming an improvement in the collection cycle. Investment securities were roughly flat from ¥0.1B in the same period last year to ¥0.1B, and long-term borrowings decreased by ¥0.1B from ¥0.2B in the same period last year to ¥0.1B, demonstrating progress in reducing interest-bearing debt. Cash coverage of short-term liabilities is 5.2x, indicating extremely strong liquidity and limited funding risk. Total assets decreased by ¥1.8B from ¥22.2B in the same period last year to ¥20.4B, showing progress in efficiency; however, due to the decline in profit levels, the improvement in asset turnover has been limited. While cash headroom is sufficient relative to the planned dividend payment of ¥10.0, the Payout Ratio of 127.9% exceeds profit, which warrants attention in future funding plans.
With Ordinary Income at ¥1.1B and Operating Income at ¥1.3B, non-operating income (loss) made a negative contribution of ¥0.2B. The breakdown shows non-operating expenses of ¥0.3B were recorded, and non-operating income such as financial income provided only a limited boost to profits. While gross profit of ¥7.7B (gross margin 31.0%) is secured, the fixed cost burden of SG&A at ¥6.4B is heavy, compressing the operating margin to 5.2%. As details of non-operating expenses are not disclosed, it is difficult to determine whether they are one-off or recurring; however, the interest burden is estimated to be limited given interest-bearing debt of ¥0.1B. As there is no disclosure of Operating Cash Flow (OCF), the linkage between profit and cash cannot be assessed, but the cash and deposits balance remains high, and there are no major concerns regarding short-term cash generation capacity. However, with a planned dividend of ¥10.0 per share against Net Income of ¥0.7B (total dividends estimated at approximately ¥0.9B), the dividend plan exceeds profit, raising doubts about the sustainability of the dividend source from a quality-of-earnings perspective.
[Position within the industry] (Reference information; our estimates) Profitability: An operating margin of 5.2% falls below the industry median of 8.2% (IQR: 5.2%–10.9%), placing the company in the lower quartile within the industry. The net margin of 2.7% is also well below the industry median of 5.7% (IQR: 3.1%–9.1%), highlighting pronounced profitability issues. ROE of 4.8% is below the industry median of 9.7% (IQR: 3.9%–15.0%). Growth: Revenue growth of -1.6% clearly lags the industry median of +9.5% (IQR: +2.7%–+15.2%). Soundness: The Equity Ratio of 69.0% exceeds the industry median of 49.0% (IQR: 38.8%–66.3%), placing the company among the top tier in terms of financial soundness. The current ratio of 518.2% also significantly surpasses the industry median of 206%, indicating extremely strong liquidity. Return on total assets is estimated at around 2.7%, below the industry median of 4.7% (IQR: 2.4%–8.1%). In summary, while financial soundness is among the best in the industry, the company underperforms significantly in profitability and growth. Margin improvement is key to restoring competitive positioning within the industry. (Industry: Healthcare (44 companies), comparison set: 2025 Q3 actuals, source: compiled by our firm)
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not constitute a solicitation to invest in any specific security. The industry benchmark is reference information compiled by our firm based on publicly available financial statements. Investment decisions are your own responsibility; please consult a professional as needed before making any decisions.