WIN-Partners Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥43.74B
• Operating Income: ¥1.47B
• Net Income: ¥846M
• EPS: ¥36.11

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

Win Partners Co., Ltd. (TSE: 3183) delivered solid FY2026 Q2 results with clear signs of operating leverage and healthy cash conversion. Revenue rose 12.3% year over year to ¥43.74bn, while operating income increased 17.5% to ¥1.47bn, outpacing sales growth and indicating better fixed-cost absorption and/or mix improvement. Ordinary income was ¥1.48bn and net income was ¥1.01bn, up 19.7% YoY, driving EPS of ¥36.11. Profitability improved modestly, with an operating margin of approximately 3.35% and a net margin of 2.31%. Gross profit was ¥4.73bn, implying a gross margin of 10.8%, consistent with a distribution-centric business model. The DuPont decomposition yields an ROE of 4.49%, derived from a 2.31% net margin, 0.94x asset turnover, and 2.06x financial leverage—pointing to mid–single-digit returns mainly constrained by thin margins. Liquidity appears strong: current assets of ¥39.73bn versus current liabilities of ¥21.39bn produce a current ratio of 1.86x and working capital of ¥18.34bn. Solvency is sound, with total liabilities of ¥22.55bn and total equity of ¥22.55bn; equity-to-asset ratio can be approximated at about 48.5% despite the reported “0%” equity ratio field being non-disclosed rather than zero. Operating cash flow of ¥1.35bn exceeds net income (OCF/NI = 1.33x), signaling decent earnings quality and cash realization. EBITDA was ¥1.57bn (3.6% margin), modestly above operating income due to low non-cash charges (D&A ~¥0.10bn). Financing cash outflows of ¥1.43bn suggest shareholder returns and/or debt service, but the split is not disclosed. Several items are unreported (inventories, cash and equivalents, investing cash flow, dividend per share, shares outstanding), which constrain deeper ratio analysis (e.g., quick ratio precision, FCF, per-share book). Even with these limitations, the combination of revenue growth, incremental margin improvement, and positive cash conversion indicates stable execution. The outlook hinges on sustaining volume growth and mix while maintaining discipline in working capital. ROE uplift will likely require a combination of margin expansion and continued asset efficiency. The absence of disclosed DPS and share data precludes dividend yield or total payout analysis; however, the negative financing CF hints at potential distributions or buybacks.

Profitability Analysis

ROE of 4.49% decomposes into: net profit margin 2.31% × asset turnover 0.94× × financial leverage 2.06×. Operating margin is about 3.35% (¥1.466bn/¥43.738bn), and ordinary margin is 3.39%, indicating limited non-operating distortion. Gross margin of 10.8% reflects a low-margin distribution profile; sustaining margin requires tight pricing and vendor terms. Operating leverage is evident: revenue grew 12.3% YoY while operating income rose 17.5% YoY. Using approximations, implied incremental operating margin is 4.6% [(¥1.466bn−¥1.248bn)/(¥43.738bn−¥38.95bn)], above the current margin, suggesting fixed-cost leverage and/or mix gains. EBITDA of ¥1.569bn (3.6% margin) indicates low D&A intensity (¥0.103bn), consistent with an asset-light model. Effective tax rate, estimated from reported tax and net income, is ~28.6% (¥404.6m / [¥1,012.0m + ¥404.6m]), contrary to the displayed “0%” (non-disclosed field). Interest expense is shown as zero (unreported); ordinary income is close to operating income, implying minimal net financial burden. Overall profitability is improving but remains constrained by structural gross margin.

Growth Assessment

Top-line growth of 12.3% YoY to ¥43.74bn is robust and broadly consistent with demand recovery and share gains. Operating income growth of 17.5% indicates positive operating leverage and likely mix/scale benefits. Net income growth of 19.7% outpaced sales, aided by operating improvements and a normalized tax rate (~29%). The sustainability of revenue growth will depend on order momentum, procurement conditions, and customer capex cycles; visibility is limited without backlog or segment disclosure. Gross margin at 10.8% suggests competitive pricing dynamics; retention of recent incremental margin improvements will be key. Profit quality appears sound given OCF/NI of 1.33x, implying earnings are generally cash-backed. Outlook: near term, maintaining mid-to-high single-digit growth with stable margins would support gradual ROE accretion; upside requires further scale efficiencies or mix uplift. Data limitations (no segment/geography, limited cost breakout) temper the precision of the outlook.

Financial Health

Liquidity is solid: current assets ¥39.73bn vs. current liabilities ¥21.39bn yield a current ratio of ~1.86x and working capital of ¥18.34bn. The quick ratio displays as equal to the current ratio due to undisclosed inventories; actual quick ratio may be lower if inventories are material. Total liabilities of ¥22.55bn and equity of ¥22.55bn imply a debt-to-equity of ~1.00x on a broad basis; however, an equity-to-asset ratio approximates 48.5% (¥22.553bn/¥46.525bn), indicating a conservative capital structure despite the reported “0%” equity ratio field. Interest expense is undisclosed; with ordinary income roughly matching operating income, net financial costs appear limited, suggesting manageable leverage. Short-term solvency is comfortable but would benefit from clarity on cash and equivalents (undisclosed). Overall balance sheet strength is adequate to support operations and moderate growth.

Cash Flow Quality

Operating cash flow of ¥1.35bn exceeds net income of ¥1.01bn (OCF/NI = 1.33x), indicating reasonable earnings quality and working-capital discipline. EBITDA to OCF conversion is also healthy given low non-cash charges. Free cash flow cannot be determined because investing cash flow and capex are undisclosed (reported as zero due to non-disclosure). Working capital appears ample (¥18.34bn), but the absence of inventory and receivables/payables details limits analysis of cash conversion cycle and potential inventory risk. Financing cash outflow of ¥1.43bn suggests capital returns and/or debt repayment; without a dividend or share count disclosure, we cannot attribute the components precisely. Overall, cash generation quality is solid, but full FCF assessment requires capex disclosure.

Dividend Sustainability

Dividend per share and payout ratio are shown as zero due to non-disclosure; thus, dividend policy and actual distributions cannot be inferred from DPS. However, negative financing cash flow of ¥1.43bn indicates some combination of dividends, share repurchases, or debt service occurred during the period. With net income of ¥1.01bn and OCF of ¥1.35bn, earnings and cash capacity could support distributions, subject to capex and working capital needs. FCF coverage cannot be calculated reliably without capex. Policy outlook remains unclear absent explicit guidance; the company’s moderate leverage and positive OCF suggest flexibility, but confirmation requires disclosure of DPS, payout ratio definitions under JGAAP, and capital allocation priorities.

Risk Assessment

Business Risks:

• Low structural gross margins (10.8%) expose earnings to pricing pressure and supplier terms.
• Dependence on volume growth and mix to sustain operating leverage; a slowdown could compress margins.
• Potential exposure to customer capex cycles and procurement timing, creating revenue volatility.
• Supply chain and vendor concentration risks typical for distribution models.
• Limited disclosure on segment/geographic mix reduces visibility into end-market cyclicality.

Financial Risks:

• Working capital intensity could rise if receivables or inventories expand (details undisclosed).
• Interest rate and refinancing risks are unclear due to undisclosed interest expense and debt mix.
• Dividend/repurchase commitments, if substantial, could pressure liquidity in a downcycle.
• Limited visibility into cash and equivalents reduces assessment of immediate liquidity buffers.

Key Concerns:

• Multiple key fields are undisclosed (inventories, cash, investing cash flows, DPS, shares outstanding), constraining precision.
• ROE at 4.49% remains modest, requiring margin and/or asset-turn improvement for meaningful uplift.
• Sustainability of recent operating leverage needs validation over subsequent quarters.

Investment Implications

Key Takeaways:

• Healthy top-line growth (+12.3% YoY) with operating income up +17.5% indicates positive operating leverage.
• Profitability improved modestly; operating margin ~3.35%, net margin 2.31%, EBITDA margin 3.6%.
• ROE of 4.49% is constrained by thin margins despite reasonable asset turnover and moderate leverage.
• Strong liquidity (current ratio ~1.86x, working capital ¥18.34bn) and a conservative equity-to-asset profile (~48.5%).
• Cash conversion is solid (OCF/NI 1.33x), but true FCF is unknown due to undisclosed capex.
• Financing outflows (¥1.43bn) suggest capital returns and/or deleveraging despite DPS being undisclosed.

Metrics to Watch:

• Gross and operating margin trends, particularly incremental margins vs. sales growth.
• OCF/NI and working-capital days (receivables, inventories, payables) once disclosed.
• Capex and investing cash flows to assess sustainable FCF and capital intensity.
• Equity ratio (actual disclosure) and interest expense/coverage as borrowing costs evolve.
• Dividend and buyback disclosures (DPS, payout ratio, total shareholder return).

Relative Positioning: Within distribution-oriented peers, the company demonstrates solid growth and cash conversion with a conservative balance sheet, but profitability and ROE remain mid-pack given structurally low gross margins; sustained operating leverage and better mix are key to improving relative returns.

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