SAIBO Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥5.43B
• Operating Income: ¥673M
• Net Income: ¥583M
• EPS: ¥60.92

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

Saibo Co., Ltd. (TSE:3123) reported solid FY2026 Q2 results with revenue of ¥5.43bn, up 4.0% YoY, indicating steady top-line momentum. Gross profit reached ¥1.412bn with a gross margin of 26.0%, evidencing stable pricing and/or input cost control. Operating income increased 26.6% YoY to ¥673m, expanding the operating margin to 12.4% and demonstrating positive operating leverage. Ordinary income of ¥783m exceeded operating income by ¥110m, implying meaningful non-operating gains net of interest, even after ¥46.8m in interest expense. Net income rose 36.5% YoY to ¥785m, translating to a net margin of 14.46% and EPS of ¥60.92. Despite the disclosure table showing a 0.0% effective tax rate, the presence of ¥186.97m in income tax suggests an implied effective tax rate around 19–20% based on inferred pre-tax profit, indicating normal tax accruals. The DuPont decomposition shows a net margin of 14.46%, asset turnover of 0.127x, and financial leverage of 1.99x, yielding an ROE of 3.67%, which is modest due to low asset turnover despite strong margins. Liquidity is robust with a current ratio of 277.5% and a quick ratio of 219.8%, supported by working capital of ¥4.195bn. The balance sheet is conservatively structured with total assets of ¥42.642bn, equity of ¥21.402bn, and total liabilities of ¥21.816bn (D/E ~1.02x). Cash generation quality is strong: operating cash flow (OCF) of ¥957m exceeds net income by 22% (OCF/NI = 1.22), aided by sizable non-cash depreciation of ¥703m. EBITDA of ¥1.376bn (25.3% margin) and interest coverage of ~14.4x indicate ample capacity to service debt. Investing cash flow is undisclosed (reported as 0) and cash/equivalents are undisclosed; hence free cash flow (FCF) cannot be reliably determined despite the table showing 0. Financing cash flow was an outflow of ¥642m, likely reflecting debt service and/or other financing uses; dividend data is not disclosed (DPS and payout shown as 0). Inventory stood at ¥1.363bn; using COGS of ¥3.811bn for the half-year implies an indicative annualized inventory turn near the mid-5x range, consistent with adequate working capital efficiency, though averages are not disclosed. Overall, Saibo exhibits margin-led profit growth, healthy cash conversion, and strong liquidity, but ROE is constrained by low asset turnover and a sizable asset base. Non-operating gains boosted ordinary income and should be monitored for sustainability. Data limitations around cash balances, investing flows, and dividends constrain full assessment of capital allocation and FCF coverage of distributions. The outlook hinges on sustaining operating leverage, maintaining gross margin resilience, and clarifying capex needs implied by high depreciation.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 14.46%
• asset_turnover: 0.127x (Revenue ¥5.43bn / Assets ¥42.642bn)
• financial_leverage: 1.99x (Assets/Equity; ¥42.642bn/¥21.402bn)
• calculated_ROE: 3.67% (matches reported)
• commentary: ROE is modest, constrained by low asset turnover despite strong net margin and moderate leverage. margin_quality:
• gross_margin: 26.0% (¥1.412bn/¥5.43bn)
• operating_margin: 12.4% (¥673m/¥5.43bn)
• ordinary_margin: 14.4% (¥783m/¥5.43bn)
• net_margin: 14.46% (¥785m/¥5.43bn)
• drivers: ['YoY operating profit growth (+26.6%) outpaced sales (+4.0%), implying cost discipline and/or mix improvement.', 'Non-operating gains (~¥157m gross before interest) supported ordinary profit above operating profit.'] operating_leverage:
• assessment: Positive
• evidence: Operating income +26.6% YoY vs revenue +4.0% YoY; margin expansion to 12.4%.
• implications: Incremental margins are strong; sustainability depends on maintaining gross margin and overhead control.

Growth Assessment

revenue_sustainability: Top-line growth of 4.0% YoY suggests stable demand; no segment detail disclosed to evaluate mix or price vs volume. profit_quality: Net income growth (+36.5% YoY) exceeds sales growth, driven by margin expansion and non-operating gains; core operating profit growth is healthy. outlook: Continuation of operating leverage is plausible if gross margin holds and cost base remains contained; however, dependence on non-operating gains may moderate ordinary income growth if such items normalize.

Financial Health

liquidity:

• current_ratio: 277.5% (¥6.558bn/¥2.363bn)
• quick_ratio: 219.8% ((CA–Inventories)/CL ≈ ¥5.195bn/¥2.363bn)
• working_capital: ¥4.195bn
• commentary: Strong short-term liquidity buffer with conservative working capital profile. solvency:
• debt_to_equity: 1.02x (Total liabilities ¥21.816bn / Equity ¥21.402bn)
• interest_coverage: 14.4x (EBIT ≈ ¥673m / Interest ¥46.8m)
• equity_ratio_note: Disclosed equity ratio 0.0% appears undisclosed; based on totals, equity/asset ratio is ~50.2%.
• commentary: Moderate leverage and strong coverage provide comfortable solvency headroom. capital_structure: Balanced with roughly half funded by equity; financing CF outflow (¥642m) indicates deleveraging or other financing uses, but details are undisclosed.

Cash Flow Quality

earnings_quality: High; OCF/NI = 1.22 indicates cash earnings exceed accounting profit, supported by non-cash D&A of ¥703m. FCF_analysis: Investing CF is undisclosed (reported as 0). Therefore, true FCF (OCF – capex) cannot be determined despite the table’s 0; actual capex may be material given high depreciation. working_capital: Inventory ¥1.363bn; using H1 COGS implies indicative annualized turns in mid-5x and inventory days ~60–70 on an annualized basis; receivables/payables not disclosed, limiting full WC analysis.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are undisclosed (shown as 0). Based on EPS ¥60.92, capacity exists for distributions if policy permits, but actual payouts are unknown. FCF_coverage: Not assessable; investing cash flows and capex are undisclosed, making FCF indeterminable. policy_outlook: No stated policy in the data. Strong liquidity and cash conversion support potential sustainability of dividends if paid, but confirmation requires disclosure of capex, cash balance, and board policy.

Risk Assessment

Business Risks:

• Reliance on non-operating gains to lift ordinary profit above operating profit; potential normalization risk.
• Input cost and pricing volatility that could compress the 26% gross margin.
• Demand softness risk affecting low asset-turnover operations, which would further pressure ROE.
• Inventory risk (valuation/obsolescence) given inventory of ¥1.363bn and limited turnover disclosure.
• Customer concentration and competitive pressure risk (no segment/customer data provided).
• Potential FX exposure if imports/exports are material (not disclosed).

Financial Risks:

• Refinancing and interest rate risk, though current interest coverage is strong at 14.4x.
• Capex intensity uncertainty; high D&A (¥703m) may imply sustained capex needs, affecting future FCF.
• Information gaps: cash balance, investing CF, and dividend details are undisclosed, obscuring liquidity-at-hand and capital allocation.
• Moderate leverage (D/E ~1.02x) could rise if cash flow weakens or capex increases.

Key Concerns:

• Sustainability of non-operating income contributing to ordinary profit.
• Lack of visibility on capex and investing cash flows, constraining FCF and dividend analysis.
• Low asset turnover (0.127x) limiting ROE despite strong margins.

Investment Implications

Key Takeaways:

• Margin-led earnings growth with operating income +26.6% YoY on +4.0% revenue.
• Healthy cash conversion: OCF/NI = 1.22 and strong EBITDA margin (25.3%).
• Robust liquidity (current ratio 277.5%, quick ratio 219.8%) and solid interest coverage (14.4x).
• ROE of 3.67% constrained by low asset turnover (0.127x) despite healthy margins and moderate leverage (1.99x).
• Non-operating gains (~¥110m net) materially boosted ordinary income; watch for normalization.
• Capex/Investing CF undisclosed; high depreciation suggests potential ongoing reinvestment needs.

Metrics to Watch:

• Gross and operating margin trajectory vs input costs.
• Non-operating income/expenses and interest expense trends.
• OCF/NI and working capital movements (inventory, receivables, payables).
• Capex and investing cash flows to triangulate true FCF.
• Asset turnover improvements and ROE progression.
• Leverage (D/E) and interest coverage amid rate environment.

Relative Positioning: Versus typical TSE small-cap industrial/commercial peers, Saibo shows stronger margins and liquidity but lower asset turnover, resulting in mid-single-digit ROE; visibility on capex and cash balances is below peers with fuller disclosure.

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