TAKACHIHO KOHEKI CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥13.47B
• Operating Income: ¥954M
• Net Income: ¥594M
• EPS: ¥38.48

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

Takachiho Koheki (2676) delivered steady topline and margin progress in FY2026 Q2 under JGAAP on a consolidated basis, with revenue up 1.2% YoY to ¥13.472bn and operating income up 1.9% YoY to ¥0.954bn. Net income rose a stronger 20.6% YoY to ¥0.717bn, indicating improved margin capture and/or favorable non-operating/tax effects. Gross profit of ¥3.356bn implies a gross margin of 24.9%, while operating margin improved to approximately 7.1%, reflecting disciplined SG&A control. Ordinary income of ¥0.985bn exceeded operating income, suggesting a net positive non-operating balance of about ¥31m despite negligible interest expense (¥1m). Liquidity remains robust with a current ratio of 330% and quick ratio of 268%, backed by sizeable working capital of ¥13.383bn. The balance sheet is conservative: total liabilities of ¥6.625bn against equity of ¥16.959bn, implying a debt-to-equity ratio of 0.39x and an equity-to-assets ratio of roughly 72.3% (despite a reported equity ratio of 0.0% which appears undisclosed in XBRL). Profitability quality is supported by the DuPont breakdown: net margin of 5.32%, asset turnover of 0.574, and financial leverage of 1.38, yielding an ROE of about 4.23%. Interest coverage is extremely high at ~954x, reflecting minimal financial risk from borrowing costs. The reported effective tax rate metric shows 0.0%, but simple arithmetic from net income and income tax suggests an effective tax rate around 23–24%, indicating that the 0.0% figure is an undisclosed placeholder. Cash flow statement items (OCF/FCF) and depreciation were not disclosed (appear as zero), limiting assessment of cash earnings quality and capex intensity; EBITDA is also listed as zero due to non-disclosure. Dividend data were not provided (DPS and payout shown as zeros), so dividend sustainability cannot be judged from this dataset. Despite these disclosure gaps, available P/L and B/S data point to solid earnings resilience, conservative leverage, and strong liquidity supporting ongoing operations. The combination of modest sales growth, improved bottom line, and very low interest burden suggests good operating discipline amid a likely mixed demand backdrop. Outlook will hinge on order momentum in core segments (factory automation, security, energy/industrial solutions), pricing power, inventory normalization, and FX procurement dynamics. Overall, fundamentals appear stable with improving profitability, but confirmation via cash flow and capital allocation disclosures is necessary.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 5.32% (¥717m / ¥13,472m)
• asset_turnover: 0.574 (as provided; note period is Q2 YTD)
• financial_leverage: 1.38 (Assets ¥23,474m / Equity ¥16,959m)
• calculated_ROE: 4.23% (consistent with provided DuPont ROE) margin_quality: Gross margin 24.9% (¥3,356m/¥13,472m) and operating margin ~7.1% (¥954m/¥13,472m) indicate healthy value-add and cost control. SG&A estimated at ~¥2,402m (Gross profit minus operating income), or ~17.8% of revenue, suggesting disciplined overheads. Ordinary margin ~7.3% benefits from small net non-operating gains. Net margin improved YoY to 5.32%, aided by operating leverage and/or tax mix. operating_leverage: With revenue up 1.2% YoY and operating income up 1.9% YoY, incremental margins are positive, implying moderate operating leverage through SG&A containment. Depreciation and EBITDA not disclosed; however, the spread between gross and operating margins (~17.8% of sales) is the key lever. Further leverage potential depends on mix and volume recovery in core segments. tax_rate_context: Reported effective tax rate shows 0.0% (undisclosed). Based on net income ¥717m and income tax ¥220m, the implied effective tax rate is ~23–24% (indicative only, as pretax profit line not provided).

Growth Assessment

revenue_sustainability: Topline grew 1.2% YoY to ¥13.472bn, suggesting steady demand despite a likely mixed macro and electronics/FA cycle. Sustainability depends on order pipeline in factory automation, security, and energy solutions, pricing realization, and project delivery timing. profit_quality: Net income rose 20.6% YoY, outpacing sales and operating income (+1.9%), pointing to mix optimization, SG&A discipline, and/or favorable non-operating/tax effects. Interest burden is negligible. Lack of OCF disclosure prevents validation of cash conversion. outlook: Key drivers will be backlog execution, inventory normalization, customer capex in automation/security, and FX on imported components. If current gross margin is maintained and SG&A efficiency continues, incremental margins should support continued EPS growth, subject to macro and supply-chain stability.

Financial Health

liquidity: Current assets ¥19,206m vs. current liabilities ¥5,823m yield a current ratio of ~329.8% and quick ratio of ~268.0% (after removing inventories ¥3,603m). Working capital is ample at ¥13,383m, indicating strong short-term solvency. solvency: Total liabilities ¥6,625m vs. equity ¥16,959m imply a debt-to-equity ratio of 0.39x and equity ratio of ~72.3% (equity/assets), reflecting a conservative capital structure. capital_structure: Minimal interest expense (¥1m) and 954x interest coverage suggest very low financial risk. Balance sheet capacity remains strong for investment or buffer against cyclicality.

Cash Flow Quality

earnings_quality: Operating cash flow, investing cash flow, and depreciation were not disclosed (appear as zero placeholders). Therefore, cash conversion (OCF/NI) and non-cash expense mix cannot be assessed from this dataset. FCF_analysis: Free cash flow is undisclosed. Without OCF and capex, we cannot evaluate FCF generation or coverage. working_capital: Inventory stands at ¥3,603m; with sizeable working capital overall, the company appears liquid. However, absent cash flow data, we cannot quantify inventory turns, receivables collection, or working capital release/absorption.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are shown as zero due to non-disclosure. Using EPS of ¥38.48, a payout ratio cannot be computed without actual dividend data. FCF_coverage: Not assessable because OCF and capex data are undisclosed; FCF coverage ratio is reported as 0.00x only due to missing inputs. policy_outlook: No dividend policy details provided. Given the strong balance sheet and stable profitability, capacity for distributions likely exists, but actual policy and payout depend on management priorities (growth investment vs. shareholder returns) and must be confirmed from company disclosures.

Risk Assessment

Business Risks:

• Cyclical demand in factory automation and industrial electronics
• Project timing and execution risk affecting revenue recognition and margins
• Supply chain and component procurement constraints
• Pricing pressure from competitors and customers in a trading/solution model
• FX volatility impacting import costs and pricing
• Technology shifts in security/automation requiring ongoing solution refresh

Financial Risks:

• Potential working capital swings (inventory and receivables) affecting cash conversion
• Customer credit risk in B2B projects
• Exposure to FX on payables/receivables (hedging effectiveness not disclosed)
• Concentration risk if reliant on key suppliers or large projects

Key Concerns:

• Lack of cash flow and depreciation disclosure limits visibility on earnings quality
• Dividend information not provided; capital allocation stance unclear
• Asset turnover of 0.574 suggests moderate efficiency; further improvement may be needed for higher ROE

Investment Implications

Key Takeaways:

• Steady growth with margin resilience: revenue +1.2% YoY, operating income +1.9%, net income +20.6%
• Healthy profitability: gross margin 24.9%, operating margin ~7.1%, net margin 5.32%
• Strong balance sheet: equity ratio ~72.3%, D/E 0.39x, ample working capital
• Minimal financial risk: interest expense ¥1m; interest coverage ~954x
• ROE 4.23% driven by moderate asset turnover and low leverage; scope to lift via efficiency and mix
• Disclosure gaps on cash flows, depreciation, and dividends constrain assessment of cash earnings and return policy

Metrics to Watch:

• Order backlog and book-to-bill in FA/security solutions
• Gross margin trajectory and SG&A ratio
• OCF/NI and FCF once disclosed; working capital turns (AR/AP/inventory)
• Asset turnover improvement and ROIC vs. WACC
• FX impacts on COGS and pricing
• Dividend announcements and buyback activity/payout policy

Relative Positioning: Within Japan’s electronics trading and industrial solutions peers, Takachiho Koheki exhibits conservative leverage, strong liquidity, and stable margins, but currently lower reported ROE due to moderate asset turnover and limited leverage; improved efficiency and clearer cash flow/distribution disclosures would enhance its relative profile.

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
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