Rasa Corporation FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥12.65B
• Operating Income: ¥932M
• Net Income: ¥635M
• EPS: ¥69.22

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

Rasa Corporation (3023) delivered solid FY2026 Q2 consolidated results under JGAAP with healthy top-line growth and notable operating leverage. Revenue rose 6.8% YoY to ¥12.65bn, while operating income increased 31.2% YoY to ¥0.93bn, underscoring cost discipline and mix improvement. Gross profit reached ¥2.82bn, translating to a gross margin of 22.3%, and the operating margin expanded to approximately 7.4%, indicating effective execution amid a steady demand environment. Ordinary income of ¥1.02bn exceeded operating income, suggesting positive non-operating contributions. Net income increased 16.9% YoY to ¥0.74bn, yielding a net margin of 5.87%. DuPont metrics show a calculated ROE of 3.35% with net margin 5.87%, asset turnover 0.392x, and financial leverage 1.45x, indicating profitability driven more by margin than by leverage. Asset turnover appears modest, consistent with a working capital-intensive model. Liquidity is strong with a current ratio of 237% and quick ratio of 184%, supported by working capital of ¥11.70bn. The balance sheet remains conservative, with debt-to-equity of 0.51x and high interest coverage of 77.7x, reflecting limited financial risk from interest-bearing debt. Operating cash flow of ¥0.90bn exceeds net income (OCF/NI 1.21x), pointing to acceptable earnings quality and solid cash conversion in the period. Financing cash outflow of ¥1.31bn implies capital returns or debt reduction; however, dividend data are not disclosed in this dataset. While the provided effective tax rate metric shows 0.0%, reported income tax of ¥0.25bn versus ordinary income implies a normalized tax burden in the mid-20s percentage range. Key data gaps include equity ratio, investing cash flows, cash and equivalents, and share-related data (shares outstanding, BVPS), which limit precision in per-share and capital allocation assessments. Despite these limitations, the trend in operating profitability and cash generation is favorable. Sustainability of growth will hinge on demand in key product lines, inventory discipline, and continued cost management. Overall, fundamentals suggest improving operating efficiency, ample liquidity, and low financial risk, with ROE improvement opportunities primarily via better asset turnover and capital efficiency.

Profitability Analysis

ROE_decomposition: ROE 3.35% = Net Margin 5.87% × Asset Turnover 0.392 × Financial Leverage 1.45. Profitability currently leans on margins rather than leverage or asset velocity; improving turnover would be the most direct lever for higher ROE without raising financial risk. margin_quality: Gross margin is 22.3% (¥2.82bn/¥12.65bn), reflecting stable pricing and procurement discipline. Operating margin of ~7.4% (¥0.93bn/¥12.65bn) improved meaningfully YoY, implying fixed-cost absorption and favorable mix. Ordinary margin of ~8.0% suggests non-operating gains (e.g., equity method, FX, or other non-operating income). Net margin of 5.87% indicates tax and non-operating items are within a normal range for the business. operating_leverage: Operating income grew 31.2% on 6.8% revenue growth, indicating positive operating leverage. Incremental margins appear strong on the revenue uptick, likely aided by controlled SG&A growth and improved gross margin mix.

Growth Assessment

revenue_sustainability: Top-line growth of 6.8% YoY suggests steady demand across core segments. The moderate pace indicates broad-based rather than one-off growth; sustainability will depend on order backlog, and end-market conditions in industrial and materials flows. profit_quality: Operating profit growth outpaced sales, implying quality improvements in mix and cost control. Ordinary profit exceeding operating profit points to supportive non-operating factors, though reliance on these should be monitored. outlook: With stronger operating leverage and robust liquidity, the company is positioned to continue executing on growth initiatives. Key dependencies include inventory turnover normalization, procurement costs, and macro-sensitive demand. Continued focus on working capital efficiency could reinforce both growth flexibility and ROE.

Financial Health

liquidity: Current ratio 237.4% and quick ratio 184.0% indicate ample short-term coverage. Working capital stands at ¥11.70bn, underpinned by ¥4.55bn inventories. solvency: Debt-to-equity is 0.51x (total liabilities/total equity), indicating a conservative capital structure. Interest coverage is 77.7x (operating income/interest expense), reflecting very low interest burden and ample debt service capacity. capital_structure: Total assets are ¥32.23bn funded by ¥22.17bn equity and ¥11.40bn liabilities. Financial leverage in DuPont (1.45x) suggests moderate balance-sheet gearing without aggressive leverage.

Cash Flow Quality

earnings_quality: Operating cash flow of ¥0.90bn exceeds net income of ¥0.74bn (OCF/NI 1.21x), indicating solid cash conversion and limited accrual buildup in the period. FCF_analysis: Investing cash flow is not disclosed (shown as 0), so Free Cash Flow cannot be reliably determined. Using only reported OCF would be incomplete; capex profile remains a key unknown for assessing true FCF. working_capital: With inventories at ¥4.55bn and strong current ratios, working capital is significant. The OCF strength suggests manageable changes in receivables/payables; ongoing monitoring of inventory days and receivables collection is important for sustaining cash conversion.

Dividend Sustainability

payout_ratio_assessment: Dividend data for the period are not disclosed here (annual DPS 0.00 and payout 0.0% appear as placeholders). With net income of ¥0.74bn and strong liquidity, coverage capacity appears adequate in principle, but actual policy and interim distributions are unknown in this dataset. FCF_coverage: FCF cannot be assessed due to undisclosed investing cash flows; therefore, dividend coverage by FCF cannot be evaluated from this data. policy_outlook: Given conservative leverage and healthy OCF, the balance sheet could support regular returns; however, actual dividend policy, target payout, or share repurchases require confirmation from company disclosures.

Risk Assessment

Business Risks:

• Demand volatility in end markets affecting order intake and utilization
• Procurement and commodity price fluctuations impacting gross margins
• Inventory management risk in a working capital-intensive model
• Customer concentration or project timing risk affecting quarterly variability
• FX exposure impacting non-operating income and costs

Financial Risks:

• Potential capex or investment needs not visible due to undisclosed investing CF
• ROE dilution risk if asset base grows faster than profits
• Credit risk in receivables during economic slowdowns
• Tax rate normalization variance versus period assumptions

Key Concerns:

• Limited visibility on investing cash flows and cash balance constrains FCF assessment
• Low asset turnover (0.392x) restrains ROE despite good margins
• Dependence on non-operating items to lift ordinary income above operating income

Investment Implications

Key Takeaways:

• Revenue up 6.8% YoY with operating income up 31.2%, evidencing positive operating leverage
• Healthy margins: gross 22.3%, operating ~7.4%, net 5.87%
• Strong liquidity (CR 237%, QR 184%) and low financial risk (ICR 77.7x, D/E 0.51x)
• OCF/NI at 1.21x suggests acceptable earnings quality
• ROE at 3.35% constrained by low asset turnover; efficiency improvements are the main lever
• Data gaps (investing CF, cash balance, dividend details, share data) limit per-share and FCF analysis

Metrics to Watch:

• Inventory turns and receivables days to track asset turnover improvements
• Gross and operating margin trajectory for signs of sustained operating leverage
• Ordinary-to-operating income gap to gauge reliance on non-operating items
• Capex and investing cash flows to refine FCF and dividend coverage outlook
• Tax expense trend for normalized effective tax rate
• Order backlog and book-to-bill in key segments

Relative Positioning: The company appears operationally disciplined with superior liquidity and conservative leverage versus typical industrial trading peers, but exhibits a lower ROE profile driven by modest asset turnover; continued focus on working capital efficiency could enhance returns without increasing financial risk.

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
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis