| Metric | Current Period | Prior Year | YoY |
|---|---|---|---|
| Revenue | ¥526.5B | ¥445.4B | +18.2% |
| Operating Income | ¥53.3B | ¥47.4B | +12.3% |
| Ordinary Income | ¥52.0B | ¥47.1B | +10.3% |
| Net Income | ¥30.8B | ¥32.8B | -6.0% |
| ROE | 18.7% | 23.1% | - |
FY2026 results were Revenue ¥526.5B (YoY +¥81.1B +18.2%), Operating Income ¥53.3B (YoY +¥5.8B +12.3%), Ordinary Income ¥52.0B (YoY +¥4.8B +10.3%), and Net Income ¥30.8B (YoY -¥2.0B -6.0%). While top- and operating-line growth was achieved, Operating Margin declined to 10.1% from 10.6% a year ago (-0.5pt), and Net Margin narrowed to 5.9% from 7.4% (-1.5pt). Gross profit was ¥238.7B (gross margin 45.3%, an improvement of +1.6pt from 43.7%), demonstrating pricing pass-through power, but SG&A rose to ¥185.4B (SG&A ratio 35.2%, up +2.2pt from 33.0%) driven by higher logistics and personnel costs, outpacing revenue growth and weakening operating leverage. Net Income declined despite Operating Income growth (+12.3%) primarily due to Special Losses of ¥3.3B (including ¥2.3B impairment on fixed assets) and the reversal of prior-year special gains (subsidy income decreased from ¥10.6B to ¥0.9B). Total assets increased substantially to ¥470.6B (YoY +¥138.6B +41.7%), with Construction in Progress at ¥62.0B expanding by +¥48.0B from ¥14.0B, indicating progress in growth investments.
Revenue expanded steadily to ¥526.5B (+18.2%). Gross margin improved to 45.3% (up +1.6pt from 43.7%) driven by pricing pass-through and product-mix improvements. Cost of sales was ¥287.8B (cost ratio 54.7%), up ¥37.0B from ¥250.8B (cost ratio 56.3%) year-on-year, but the cost ratio fell as revenue increased.
Profitability: Operating Income was ¥53.3B (+12.3%), with Operating Margin at 10.1% (down -0.5pt from 10.6% a year ago). SG&A rose to ¥185.4B (+¥38.3B, +26.0% vs prior year ¥147.1B), increasing the SG&A ratio to 35.2% (up +2.2pt). SG&A growth (+26.0%) outpaced revenue growth (+18.2%), and higher logistics and labor costs compressed operating leverage. Non-operating items included equity-method investment income of ¥0.1B, while interest expense increased to ¥1.8B (from ¥1.1B, +¥0.7B) due to higher borrowings, expanding non-operating expenses to ¥2.2B (from ¥1.4B). Ordinary Income was ¥52.0B (+10.3%). Extraordinary items were net -¥2.4B: Special Losses ¥3.3B (fixed asset write-offs ¥2.3B, impairment losses ¥0.04B, etc.) exceeded Special Gains ¥0.9B (including negative goodwill gain ¥0.4B). Prior year had Special Gains ¥10.6B (subsidies etc.) and Special Losses ¥11.2B (including subsidy reduction ¥10.6B) netting -¥0.6B, so the net one-off loss widened this period. Profit before tax was ¥49.5B (prior year ¥47.0B +5.3%), and after corporate tax expense ¥14.9B (effective tax rate 30.1%, prior year 27.9%), Net Income was ¥30.8B (-6.0%). Comprehensive income was ¥38.0B, exceeding Net Income by ¥7.2B, driven by an increase in deferred hedge gains of ¥3.3B (after tax) boosting other comprehensive income. In conclusion, revenue and operating profit increased, but higher SG&A and the reversal of prior-year special items led to a decline in Net Income.
Profitability: Operating Margin was 10.1% (down 0.5pt from 10.6%), but Gross Margin improved to 45.3% (prior year 43.7%, +1.6pt), indicating strong pricing power. Net Margin contracted to 5.9% (down -1.5pt from 7.4%) reflecting SG&A ratio increases and special items. ROE was 18.7%, down from 26.5% primarily due to lower Net Margin. ROA (on Ordinary Income basis) was 12.9%, down -1.9pt from 14.8%.
Cash quality: Operating Cash Flow (OCF) ¥49.5B is 1.6x Net Income ¥30.8B, indicating solid cash backing of profits. EBITDA was ¥75.2B (Operating Income ¥53.3B + D&A ¥21.9B), yielding EBITDA/Revenue 14.3% and OCF/EBITDA 0.66x, implying somewhat weak cash conversion efficiency. Working capital increases (Inventory +¥1.4B, Accounts Receivable +¥10.7B) contributed.
Investment efficiency: Capital expenditures were ¥132.3B, 6.0x depreciation ¥21.9B, reflecting aggressive growth investment. Construction in Progress ¥62.0B (13.2% of total assets) expanded +¥48.0B from ¥14.0B, advancing future capacity increases. Total asset turnover was 1.12x, down from 1.34x.
Financial health: Equity Ratio was 35.0%, down -7.9pt from 42.9% as interest-bearing debt rose. Interest-bearing debt was ¥222.5B (short-term borrowings ¥102.3B, long-term borrowings ¥109.8B, long-term current portion ¥15.4B), up +¥100.6B from ¥121.9B. Debt/EBITDA multiple was 3.0x — manageable given the investment-led phase, but pre-interest profitability expansion is a challenge. Interest coverage was 30.2x on EBIT basis and 42.7x on EBITDA basis, showing ample cushion. Current Ratio was 0.82, down from 1.15, indicating tight liquidity. Cash & deposits were ¥35.6B versus short-term borrowings ¥102.3B, implying a high short-term debt ratio and refinancing risk.
OCF was ¥49.5B (prior year ¥52.0B, -4.9%). Starting from profit before tax ¥49.5B, adding non-cash charges such as depreciation ¥21.9B, then deducting working capital increases (Inventory +¥14.1B, Accounts Receivable +¥10.7B, Accounts Payable +¥0.4B) and corporate tax payments ¥14.1B resulted in the OCF. Subtotal (before working capital changes) was ¥65.1B, above prior year ¥61.6B, but a shift to working capital deployment (prior year Inventory -¥9.3B, AR -¥0.2B) led to a slight decline in OCF. Investing Cash Flow was -¥131.7B (prior year -¥41.0B), driven primarily by capital expenditures ¥132.3B (mostly tangible asset investments). Outflows also included payments ¥16.0B for business transfers; growth investment and business restructuring proceeded in parallel. Subsidy receipts of ¥0.9B were recorded. Free Cash Flow was -¥82.2B, reflecting investment-led funding needs. Financing Cash Flow was +¥87.7B (prior year -¥18.3B), driven by net short-term borrowings increase ¥69.4B and long-term borrowing proceeds ¥49.1B. Offset items included long-term borrowings repayment ¥12.9B, dividend payments ¥6.3B, and share buybacks ¥10.0B. Ending cash was ¥35.6B, up ¥5.5B from ¥30.1B, indicating that large investments and shareholder returns were financed by borrowings.
Of Ordinary Income ¥52.0B, non-operating items were net -¥1.3B (equity-method income ¥0.1B, interest & dividends received ¥0.0B, foreign exchange gains ¥0.2B, interest expense ¥1.8B, etc.), showing only minor divergence from operating performance. Extraordinary items were net -¥2.4B, causing deviation from recurring earnings structure. Prior year’s subsidy income ¥10.6B and subsidy reduction ¥10.6B netted -¥0.6B, whereas this period’s main one-off loss was fixed asset write-off ¥2.3B; subsidy-related reversal is the principal driver of Net Income decline. Comprehensive income ¥38.0B exceeded Net Income ¥30.8B by ¥7.2B, with deferred hedge gains ¥3.3B (after tax) lifting other comprehensive income—these are mark-to-market gains on currency hedges and may reverse when realized. OCF being 1.6x Net Income indicates good cash backing, but accruals (Comprehensive Income - OCF) were -¥11.5B, reflecting non-cash profit reversals and working capital deployment temporarily pressuring cash. If Construction in Progress ¥62.0B is commissioned and contributes to revenue, future cash generation should improve.
Full Year guidance is Revenue ¥720.0B (YoY +36.7%), Operating Income ¥65.0B (+22.0%), Ordinary Income ¥61.8B (+18.9%), and EPS forecast ¥80.94. H1 results were Revenue ¥526.5B (73.1% of full-year forecast) and Operating Income ¥53.3B (82.0% of full-year forecast), indicating operating income progress outpacing revenue and a first-half-weighted earnings profile. The full-year Operating Margin is assumed at 9.0%, down from H1 actual 10.1%, incorporating expected second-half cost and SG&A increases. If Construction in Progress ¥62.0B begins operating in H2, higher depreciation alongside revenue and EBITDA expansion is expected, but the projected decline in operating margin signals conservative cost assumptions. Net Income forecast is not disclosed, but back-calculating from EPS ¥80.94 implies Net Income approximately ¥42.0B (+36.4%), assuming H2 earnings improvement and normalization of special items.
A year-end dividend of ¥14 was paid, with total dividend payments of approximately ¥6.3B. Payout Ratio was 18.5%, a prudent level relative to Net Income ¥30.8B. Dividend payments relative to OCF were 12.7%, indicating room within cash flows and sustainability on profit and cash bases. However, Free Cash Flow was -¥82.2B, and the current dividends were implemented alongside growth investments financed by borrowings. Share buybacks of ¥10.0B were executed, bringing total shareholder distributions to ¥16.3B and Total Return Ratio to 52.9%. Prior year had only dividends ¥4.8B and no buybacks; shareholder returns were strengthened this period. The full-year dividend forecast is listed as ¥0.00, which denotes an interim dividend of ¥0, while the year-end dividend ¥14 was paid as actual. If growth investments complete and Construction in Progress begins generating FCF, scope to maintain or raise payout and total returns would expand.
Liquidity risk: Current Ratio 0.82 and Cash ¥35.6B vs. Short-term borrowings ¥102.3B indicate a high short-term debt ratio and refinancing risk. Short-term borrowings surged +¥69.4B (+211%) from ¥32.9B, widening maturity mismatch. Long-term borrowings ¥109.8B (prior year ¥78.8B, +39.3%) also increased, raising borrowing dependence and potential interest burden under rising-rate scenarios. Interest coverage is adequate, but failure to refinance short-term funding could crystallize liquidity stress.
Investment recovery risk: Construction in Progress ¥62.0B (13.2% of total assets) and tangible fixed assets ¥299.9B (+50.2%) reflect future capacity expansion but carry risks of commissioning delays and cost overruns. Capex ¥132.3B equals 6.0x depreciation ¥21.9B, signaling pronounced front-loaded investment. If CIP commissioning and planned revenue/EBITDA contributions do not materialize, impairment risk and sustained high Debt/EBITDA are concerns.
SG&A pressure risk: SG&A ratio rose to 35.2% (+2.2pt), with SG&A growth (+26.0%) exceeding revenue growth (+18.2%). Continued logistics and labor cost inflation could further compress Operating Margin. While pricing pass-through is strong (gross margin +1.6pt), competitive dynamics and demand trends may constrain pricing flexibility, making cost absorption more difficult.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 10.1% | 5.0% (3.3%–8.4%) | +5.1pt |
| Net Margin | 5.9% | 3.2% (1.9%–6.6%) | +2.7pt |
Both Operating and Net Margins substantially exceed industry medians, indicating top-tier profitability within the Food & Beverage sector.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 18.2% | 5.4% (1.0%–8.6%) | +12.8pt |
Revenue growth significantly outperforms the industry median, reflecting aggressive expansion and market share gains.
※ Source: Company compilation
Gross Margin 45.3% (above industry median) and Revenue Growth +18.2% (well above industry median +5.4%) indicate strong pricing power and market share expansion. Operating Margin 10.1% exceeds industry median 5.0% by +5.1pt, maintaining leading sector profitability. SG&A ratio increase (+2.2pt) reflects logistics and labor inflation, but gross margin improvement (+1.6pt) partially offsets this, suggesting cost management and pricing pass-through are functioning.
Construction in Progress ¥62.0B (13.2% of total assets) and Capex ¥132.3B (6.0x depreciation) are key indicators of potential future EBITDA expansion. While FCF is -¥82.2B due to front-loaded investment, commissioning should boost OCF and EBITDA. Full-year forecast Revenue ¥720.0B (+36.7%) is optimistic and likely factors in CIP contributions. Progress on investment recovery and stabilization of SG&A ratio are critical for mid-term margin improvement and ROE recovery.
Current Ratio 0.82, Short-term borrowings ¥102.3B (+211%), and Debt/EBITDA 3.0x highlight attention to short-term liquidity management and refinancing strategy. Interest coverage is ample (42.7x on EBITDA basis), but high short-term debt sensitivity increases interest-rate exposure. OCF/Net Income 1.6x shows good cash backing of profits; post-commissioning OCF expansion should support debt reduction and lower Debt/EBITDA. Payout Ratio 18.5% and Total Return Ratio 52.9% are sustainable on profit basis, but capital allocation will likely prioritize growth investment until FCF turns positive.
This report is an AI-generated earnings analysis based on XBRL financial statement data. It does not constitute an investment recommendation for any particular security. Industry benchmarks are compiled by our firm based on public financial statements and are provided for reference. Investment decisions are your responsibility; please consult a professional advisor as needed.