JTP CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥4.94B
• Operating Income: ¥436M
• Net Income: ¥298M
• EPS: ¥52.43

Income Statement

Balance Sheet

Cash Flow Statement

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

JTP Co., Ltd. (24880) reported solid FY2026 Q2 (JGAAP, non-consolidated) results with clear operating leverage and healthy cash generation from operations. Revenue grew 12.7% YoY to ¥4,939m, while operating income rose 26.3% YoY to ¥436m, indicating margin expansion and disciplined cost control. Gross profit of ¥836m translates to a gross margin of 16.9%, and operating margin improved to 8.8%, supporting the YoY outperformance at the operating line. Ordinary income of ¥443m slightly exceeded operating income, suggesting modest non-operating gains. Net income increased 32.1% YoY to ¥298m, with a reported net margin of 6.03%. DuPont analysis shows ROE of 7.8% (net margin 6.03%, asset turnover 0.806x, financial leverage 1.60x), reflecting balanced profitability, efficient asset use, and moderate leverage. The balance sheet appears conservative: total assets of ¥6,126m and total equity of ¥3,821m imply an equity ratio around the low 60% range by calculation, despite the equity ratio field being unreported. Liquidity is strong, with a current ratio of 346% and ample working capital of ¥3,715m. Operating cash flow was ¥334m, equating to an OCF/Net Income ratio of 1.12, which supports earnings quality. Investing cash flow and cash balances were not disclosed in the period’s data, limiting precision on free cash flow and cash cushion; consequently the reported FCF is shown as zero strictly due to disclosure gaps. Financing cash flow was an outflow of ¥175m, likely reflecting shareholder returns or debt/service payments at the parent level, though the dividend data fields indicate no payout information for the period. The company recorded depreciation and amortization of ¥33m, consistent with an asset-light services profile and a reported EBITDA of ¥469m (9.5% margin). Effective tax rate is shown as 0.0% in the summary fields, but using disclosed income tax (¥115m) and ordinary income guidance implies a more normal tax burden in the mid-20% range; treat the 0% figure as unreported. Overall, the company demonstrates improving profitability, robust liquidity, moderate leverage, and acceptable earnings-to-cash conversion. The key constraints in this analysis are unreported inventories (likely minimal for a services model), unreported cash balance, and unreported per-share balance sheet metrics. Despite these data limitations, the core operating trajectory appears favorable with positive momentum into 2H, provided demand remains resilient.

Profitability Analysis

ROE is 7.8%, decomposed into net margin 6.03%, asset turnover 0.806x, and financial leverage 1.60x. Operating margin is 8.8% (¥436m/¥4,939m), up faster than revenue (+26.3% OI vs +12.7% sales), evidencing operating leverage. Ordinary margin is 9.0% (¥443m/¥4,939m), indicating small positive non-operating contributions. Gross margin stands at 16.9%, consistent with a services-heavy mix; cost discipline likely drove margin lift. EBITDA margin is 9.5% with low D&A (¥33m), suggesting an asset-light model and stable margin quality. Interest expense is unreported (0), and interest coverage is unreported; leverage is moderate, so coverage should be comfortable. The implied tax burden (based on disclosed tax charge) appears in the mid-20% range, supportive of sustainable net margins.

Growth Assessment

Revenue grew 12.7% YoY to ¥4,939m, a healthy pace for a services-oriented business. Operating income growth of 26.3% outpaced sales, reflecting improved mix, utilization, and/or overhead absorption. Net income rose 32.1% YoY, aided by margin expansion and stable non-operating items. The sustainability of growth hinges on continued demand for core services and retention of margin gains; the low D&A suggests limited capacity constraints but also limited depreciation-related cost buffers. Asset turnover at 0.806x indicates efficient asset use; further turnover gains could come from scaling without commensurate asset growth. Outlook: if revenue growth remains near low double digits and cost discipline persists, operating leverage can continue, though benefits typically moderate as margins normalize. Data gaps (e.g., unreported cash, inventories) do not materially affect the growth read-through given the service profile.

Financial Health

Total assets are ¥6,126m and total liabilities are ¥2,256m, implying a liabilities-to-assets ratio of ~36.8% and an implied equity ratio around ~62% (equity of ¥3,821m), despite the equity ratio field being unreported. Current assets are ¥5,222m vs current liabilities of ¥1,507m, yielding a strong current ratio of 346.5% and working capital of ¥3,715m. Quick ratio equals the current ratio due to unreported inventories, consistent with a service model with minimal inventory. Debt-to-equity is 0.59x (total liabilities/equity), indicating moderate leverage and ample balance sheet flexibility. Interest expense is unreported (0), but given modest leverage, interest burden risk appears limited. Overall solvency and liquidity are strong on the available data.

Cash Flow Quality

Operating cash flow was ¥334m, 1.12x net income (¥298m), indicating reasonable earnings-to-cash conversion and limited working capital drag. EBITDA of ¥469m vs OCF of ¥334m suggests typical cash taxation and working capital needs; low D&A (¥33m) underscores limited non-cash accrual distortion. Investing cash flow is unreported (0), preventing accurate free cash flow calculation; the FCF field shows zero purely due to disclosure gaps, not economic zero. Financing cash flow was an outflow of ¥175m, potentially reflecting dividends, share repurchases, or debt service; specifics are not disclosed. Working capital position is strong (¥3,715m), supporting operational resilience. Overall, earnings quality appears sound given positive OCF coverage of NI and stable margins.

Dividend Sustainability

Dividend per share is undisclosed for the period (field shows 0.00), and payout ratio is reported as 0% alongside positive EPS of ¥52.43, indicating either no declared interim dividend or timing of disclosure. With OCF at ¥334m and positive earnings, prospective dividend capacity appears supported by cash generation, but FCF cannot be confirmed due to unreported investing cash flows and cash balances. Balance sheet strength (implied equity ratio ~62% and D/E 0.59x) provides flexibility for shareholder returns. Policy outlook cannot be inferred from the provided data; assess full-year guidance and historical payout policy when available.

Risk Assessment

Business Risks:

• Demand cyclicality in core services potentially affecting utilization and pricing
• Talent retention and wage inflation pressures compressing margins
• Project mix and execution risk impacting gross margins
• Customer concentration risk typical of B2B service providers
• Competitive pricing in IT/services reducing margin expansion potential

Financial Risks:

• Data gaps on cash and investing flows limit visibility on FCF and liquidity buffers
• Potential increase in working capital requirements as revenue scales
• Exposure to non-operating items could add volatility to ordinary income
• Interest rate risk limited but present if leverage increases from current levels

Key Concerns:

• Unreported cash and investing cash flows obscure free cash flow assessment
• Equity ratio and interest coverage fields are unreported, requiring inference from other items
• Sustainability of operating leverage as margins normalize

Investment Implications

Key Takeaways:

• Healthy top-line growth (+12.7% YoY) with stronger operating income growth (+26.3% YoY) indicates positive operating leverage
• Net margin of 6.03% and EBITDA margin of 9.5% reflect solid service-model economics
• ROE at 7.8% is supported by moderate leverage (1.60x assets/equity) and decent asset turnover (0.806x)
• Strong liquidity: current ratio 346% and working capital ¥3,715m
• OCF/NI of 1.12 suggests acceptable earnings quality
• Financing outflow of ¥175m points to potential shareholder returns or debt servicing, details undisclosed
• Low D&A (¥33m) supports an asset-light profile and flexibility

Metrics to Watch:

• Revenue growth trajectory and booking/backlog indicators
• Operating margin sustainability and gross margin mix effects
• OCF conversion vs NI and changes in working capital
• Capital expenditure disclosure to refine FCF
• Actual cash and equivalents balance for liquidity assessment
• Customer concentration and pricing trends
• Any updates to dividend or capital allocation policy

Relative Positioning: Appears as a relatively asset-light, cash-generative services operator with improving margins and a conservative balance sheet, offering resilience versus more capital-intensive peers, contingent on sustaining demand and utilization.

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
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