| Indicator | Current Period | Same Period Last Year | YoY |
|---|---|---|---|
| Revenue | ¥327.5B | ¥301.4B | +8.6% |
| Operating Income | ¥12.7B | ¥10.8B | +17.4% |
| Ordinary Income | ¥14.0B | ¥12.0B | +16.7% |
| Net Income | ¥14.4B | ¥10.1B | +43.7% |
| ROE | 13.7% | 11.4% | - |
Cumulative results for FY2026 Q3 were Revenue ¥327.5B (from ¥301.4B, +¥26.1B, +8.6%), Operating Income ¥12.7B (from ¥10.8B, +¥1.9B, +17.4%), Ordinary Income ¥14.0B (from ¥12.0B, +¥2.0B, +16.7%), and Net Income ¥14.4B (from ¥10.1B, +¥4.3B, +43.7%). Revenue increased by 8.6% on solid demand expansion, and Operating Income rose 17.4%, improving profitability. The significant increase in Net Income was driven by Extraordinary Income of ¥6.0B, including ¥5.2B in gains on sales of investment securities. Total assets expanded to ¥292.6B and Net Assets to ¥105.7B, increasing equity. The Operating Margin improved to 3.9% from the prior year but remains low versus sector levels. Full-year guidance calls for Revenue ¥430.0B (+7.1%), Operating Income ¥17.5B (+26.3%), Ordinary Income ¥17.0B (+18.7%), and Net Income ¥15.5B, with progress tracking well.
[Profitability] ROE 13.7% (DuPont: Net Profit Margin 4.4% × Total Asset Turnover 1.12x × Financial Leverage 2.77x) exceeded the prior year. Operating Margin at 3.9% improved by 1.6pt YoY but remains low within the sector. Net Profit Margin 4.4% includes the contribution from Extraordinary Income. Gross Profit Margin 18.9%, EBIT margin 3.9%, Interest Coverage 7.3x. Effective tax rate 27.2%. [Cash Quality] Cash and deposits ¥13.4B; cash coverage to short-term liabilities is a thin 0.17x. Inventories of ¥92.4B account for 31.6% of total assets, warranting attention to inventory efficiency. Accounts receivable ¥71.6B, making collection management important. [Investment Efficiency] Total Asset Turnover 1.12x; Return on Assets (ROA) 4.9%. Return on Invested Capital (ROIC) 4.3%, indicating substantial room to improve capital efficiency. [Financial Soundness] Net Assets ¥105.7B (from ¥87.8B, +20.3%), with Retained Earnings up to ¥48.6B (from ¥37.7B, +29.0%). Current Ratio 144.6%, Quick Ratio 72.6%. Short-term borrowings of ¥80.3B comprise the bulk of liabilities, with a high Short-term Liability Ratio of 63.9%. Interest-bearing debt ¥125.5B, Debt-to-Equity ratio 1.77x, Debt/Capital ratio 54.3%, indicating moderate leverage. Valuation differences on securities of ¥35.2B contribute to Net Assets.
As Operating Cash Flow (OCF) is not disclosed in the quarterly results, funding movements are analyzed from balance sheet trends. Cash and deposits at period-end were ¥13.4B, and versus short-term borrowings of ¥80.3B, the cash buffer is extremely thin. In working capital efficiency, Retained Earnings increased from ¥37.7B to ¥48.6B, +¥10.9B (+29.0%), indicating internal reserves accumulating after dividends, etc., from Net Income of ¥14.4B. Accounts payable of ¥19.5B make up part of current liabilities, contributing to working capital efficiency through trade payables. Against short-term liabilities of ¥126.0B, cash and deposits of ¥13.4B provide coverage of 0.11x, indicating high liquidity stress and a structure highly dependent on refinancing short-term borrowings. Investment securities of ¥67.3B carry valuation differences of ¥35.2B, and gains on sales of investment securities of ¥5.2B are included in Extraordinary Income, confirming partial monetization of investment positions. The inventory build-up to ¥92.4B appears to support revenue growth, but turnover efficiency requires monitoring.
Against Ordinary Income of ¥14.0B, Operating Income was ¥12.7B, with a net non-operating increase of approximately ¥1.3B. The breakdown is mainly dividend income of ¥1.9B, indicating stable income from financial asset management. There is ¥0.1B in interest income and ¥0.2B in other non-operating income, while ¥1.7B in interest expenses and ¥0.9B in non-operating expenses were incurred. Non-operating income accounts for roughly 0.7% of Revenue. Of the ¥5.9B in Extraordinary Income, ¥5.2B in gains on sales of investment securities accounts for the majority, with a very high contribution ratio of about 36% to Net Income of ¥14.4B. As Extraordinary Income accounts for 29.6% of Profit before income taxes of ¥19.9B, profit from recurring business activities is ¥14.0B, and the ¥5.9B difference to Net Income reflects non-recurring factors. As OCF is not disclosed, a comparison between Operating Income and cash generation is not possible; however, the expansion in profit due to extraordinary gains affects the quality of earnings and should be monitored. Comprehensive income of ¥21.2B comprises Net Income of ¥14.4B plus Other Comprehensive Income of ¥6.7B (mainly increases in valuation differences on securities), with valuation gains contributing to capital strengthening.
[Position within Industry] (Reference information; in-house research) We compare the company’s relative positioning in the Wholesale (trading) sector against the industry median as of 2025 Q3. Profitability: Operating Margin of 3.9% exceeds the industry median of 2.8% (IQR: 1.2%–3.5%), placing it in the upper tier. Net Profit Margin of 4.4% also substantially exceeds the industry median of 1.8% (IQR: 0.9%–3.3%), though note the significant contribution from Extraordinary Income. ROE 13.7% far exceeds the industry median of 4.0% (IQR: 2.1%–8.7%), indicating a solid level. Soundness: Current Ratio of 144.6% is below the industry median of 184% (IQR: 161%–231%), ranking low within the sector. The Equity Ratio is estimated at 36.1% (Net Assets ¥105.7B ÷ Total Assets ¥292.6B), below the industry median of 47.3% (IQR: 41.8%–53.2%). Dependence on short-term borrowings is high, and financial soundness lags within the sector. Efficiency: ROA 4.9% exceeds the industry median of 2.2% (IQR: 1.0%–4.0%), indicating good asset efficiency. Sales growth of +8.6% is near the upper bound of the industry median +1.1% (IQR: -5.7%–+8.6%), indicating strong growth. Overall, the company ranks high in profitability and growth but low in liquidity and leverage, indicating ample room to improve its financial structure. (Industry: 14 wholesale companies; comparison period: 2025 Q3; Source: in-house aggregation)
This report is an earnings analysis automatically generated by AI based on XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. The industry benchmark is reference information aggregated by our firm based on publicly available financial data. Investment decisions are your own responsibility; consult a professional as necessary before making any investment decisions.