Hamee Corp. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥11.23B
• Operating Income: ¥705M
• Net Income: ¥666M
• EPS: ¥18.78

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend 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

Verdict: FY2026 Q2 was mixed—top-line grew modestly, but margins compressed materially and cash conversion deteriorated. Revenue increased 5.2% YoY to 112.32, while operating income fell 30.9% YoY to 7.05, ordinary income decreased 47.0% to 5.47, and net income declined 54.9% to 2.99. Gross profit reached 62.08 (gross margin 55.3%), but SG&A at 51.87 (46.2% of sales) constrained operating leverage. Operating margin declined to 6.3% from an estimated 9.6% last year (about 327 bps compression). Net margin fell to 2.7% from an estimated 6.2% last year (about 355 bps compression), reflecting both weaker operating profit and a 34.1% effective tax rate. EBITDA was 10.10, implying a 9.0% EBITDA margin, cushioning but not offsetting the decline in operating income. Earnings quality was weak: operating cash flow was -10.55 versus net income of 2.99 (OCF/NI -3.53x), flagging a significant divergence. Financing inflows of 13.70 (likely tied to short-term borrowings; short-term loans balance 38.50) bridged the cash shortfall, raising reliance on external funding for working capital. Liquidity remains solid with a current ratio of 214.5% and cash of 49.94, and solvency is conservative with D/E of 0.58x and interest coverage of 45.6x. However, the shift toward short-term debt funding introduces maturity and refinancing risk if cash generation does not normalize. Total assets stand at 195.56 and equity at 111.07, yielding financial leverage of 1.76x and a calculated ROE of 2.7%, which is low for the business profile. The DuPont breakdown indicates ROE pressure primarily from net margin deterioration, with asset turnover at 0.574 signaling only moderate efficiency. The estimated payout ratio of 122.9% suggests dividends (if maintained) exceeded earnings during the period, which is not supported by negative OCF. Forward-looking, the company must restore operating leverage (through SG&A control and/or gross margin defense) and normalize working capital to improve cash conversion. In the absence of disclosed inventories and detailed SG&A line items, the precise drivers of the OCF shortfall remain unclear, but receivables timing and seasonal working capital are plausible contributors. Near-term focus should be on cash conversion, discipline on expense growth relative to revenue, and reducing dependence on short-term financing. Overall, steady sales growth is a positive, but margin compression and cash flow quality are the key detractors this quarter.

Profitability Analysis

ROE decomposition (DuPont): ROE 2.7% = Net Profit Margin 2.7% × Asset Turnover 0.574 × Financial Leverage 1.76x. The most significant change appears in net profit margin, given net income fell 54.9% YoY while revenue rose 5.2%, implying sharp margin compression. Operating margin compressed to 6.3% (from ~9.6% a year ago), and ordinary margin to 4.9% (from ~9.7%), pointing to cost pressure and/or operating deleverage as the core driver. Likely business reasons include SG&A intensity (51.87; 46.2% of sales) rising relative to gross profit, and a high effective tax rate (34.1%) amplifying the hit to net margins; detailed SG&A drivers were not disclosed. Asset turnover at 0.574 is moderate and likely down modestly YoY given asset growth outpaced sales, but the data to confirm prior-period assets is not provided. The deterioration in margins is partially reversible if cost discipline is tightened or gross margin mix improves; tax rate normalization could also help net margin. However, absent evidence of one-time charges or temporary costs, the degree of compression suggests more than a one-off effect. Concerning trends: operating income declined 30.9% despite 5.2% revenue growth, indicating negative operating leverage; with SG&A details unreported, we cannot pinpoint categories, but SG&A growth likely exceeded revenue growth.

Growth Assessment

Revenue grew 5.2% YoY to 112.32, indicating resilient top-line demand. Gross profit of 62.08 (55.3% margin) supports the view that pricing/mix has not collapsed, but cost absorption and SG&A intensity limited profit growth. Operating income fell 30.9% and net income 54.9%, highlighting that growth is currently not translating to earnings. EBITDA margin at 9.0% remains positive but narrowed relative to operating trends, implying limited buffer for fixed-cost absorption. With ordinary income down 47.0%, non-operating effects were not a positive offset (non-operating income 0.50 vs expenses 0.37). Outlook hinges on restoring operating leverage—containing SG&A as a share of sales, stabilizing gross margin, and normalizing the effective tax rate. Given the negative OCF, near-term growth will need to be funded carefully to avoid over-reliance on short-term borrowings. Without disclosure on inventories and detailed SG&A, the sustainability of current revenue growth cannot be firmly assessed, but the margin profile needs clear improvement to sustain profit growth.

Financial Health

Liquidity is strong: current assets 134.22 vs current liabilities 62.58 yield a current ratio of 214.5% (above the 1.5x benchmark). Quick ratio is also 214.5%, supported by cash and deposits of 49.94; accounts receivable are 23.52. Solvency is conservative: total liabilities 64.02 vs equity 111.07 imply D/E of 0.58x, well below the 1.5x threshold; interest coverage is robust at 45.6x. No explicit warning triggers: Current Ratio is well above 1.0 and D/E well below 2.0. Maturity profile shows concentration in short-term loans (38.50) versus minimal noncurrent liabilities (1.45), creating some refinancing/maturity mismatch risk if OCF remains negative, but current asset coverage is ample. Off-balance sheet obligations were not disclosed in the provided data. Overall balance sheet capacity is sound, but increased dependence on short-term funding during a period of weak cash generation warrants monitoring.

Cash Flow Quality

OCF/Net Income is -3.53x, well below the 0.8 threshold and indicative of poor earnings quality this quarter. Operating CF of -10.55 versus net income of 2.99 suggests working capital outflows and/or accruals drove the divergence; with inventories and detailed WC components unreported, the specific drivers are unclear. Implied Free Cash Flow (OCF minus capital expenditures of 1.63) is approximately -12.18, signaling an outflow insufficient to cover dividends or debt reduction. Financing CF of 13.70 offset operating shortfalls, consistent with increased reliance on short-term borrowings. There are no clear signs of deliberate working capital manipulation from the limited data, but the combination of negative OCF and shrinking margins elevates risk. Sustainability depends on normalizing receivables/other WC and aligning SG&A with revenue growth.

Dividend Sustainability

The calculated payout ratio of 122.9% suggests distributions exceeded earnings during the period, which is not supported by negative OCF. DPS and total dividends paid were not disclosed, so we cannot reconcile policy specifics or timing. With implied FCF of about -12.18, dividends (if paid at a similar run-rate) would have required debt or cash on hand for funding. Equity remains strong (111.07) and liquidity is adequate, but sustaining a payout above earnings amid negative OCF is not prudent without a near-term rebound in cash generation. Policy outlook is uncertain due to lack of disclosed guidance; maintaining dividends likely hinges on rapid improvement in OCF and margin recovery.

Risk Assessment

Business Risks:

• Margin compression from negative operating leverage (SG&A intensity at 46.2% of sales)
• Potential gross margin pressure if input costs or channel mix worsen
• Demand variability and seasonality typical to consumer/EC-related businesses
• Execution risk in cost control and product mix optimization

Financial Risks:

• Negative OCF (-10.55) versus positive net income (2.99), indicating weak cash conversion
• Increased reliance on short-term loans (38.50) to bridge cash shortfalls (refinancing/maturity risk)
• High effective tax rate (34.1%) suppressing net margins
• Potential receivables collection risk contributing to WC outflows (details unreported)

Key Concerns:

• Operating margin compression (~327 bps YoY) and net margin compression (~355 bps YoY)
• OCF/NI of -3.53x (quality alert) and implied FCF of about -12.18
• Limited disclosure on inventories and SG&A breakdown obscures cost drivers
• Dividend payout appears above earnings (122.9%) despite negative OCF

Investment Implications

Key Takeaways:

• Top-line grew 5.2% YoY, but profitability weakened materially across operating, ordinary, and net levels
• ROE at 2.7% is depressed, driven primarily by net margin deterioration
• Cash conversion is a major red flag with OCF/NI at -3.53x
• Balance sheet remains liquid and conservatively levered, but short-term funding reliance increased
• Restoring operating leverage and normalizing working capital are immediate priorities

Metrics to Watch:

• Operating margin trend and SG&A-to-sales ratio
• OCF and working capital movements (receivables, payables, and any disclosed inventories)
• Short-term debt balance vs cash and refinancing activity
• Effective tax rate and ordinary income trajectory
• EBITDA margin and gross margin resilience

Relative Positioning: Relative to typical TSE small/mid-cap consumer/EC peers, liquidity and leverage are solid, but profitability and cash flow quality are currently below peer norms given the magnitude of margin compression and negative OCF.

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