Japan Property Management Center Co.,Ltd. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥43.80B
• Operating Income: ¥2.17B
• Net Income: ¥1.30B
• EPS: ¥86.64

Income Statement

Balance Sheet

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

For FY2025 Q3 (consolidated, JGAAP), 株式会社JPMC delivered resilient earnings with modest topline growth and solid profit expansion. Revenue was ¥43,798 million, up 0.1% YoY, indicating a flattish demand backdrop but stable client activity. Operating income grew 11.4% YoY to ¥2,172 million, demonstrating margin improvement despite limited revenue growth. Net income rose 12.3% YoY to ¥1,457 million, with EPS of ¥86.64, implying an estimated share count of roughly 16.8 million. Gross profit was ¥5,584 million, translating to a gross margin of 12.7%, consistent with an asset-light, services-oriented model. Operating margin improved to approximately 5.0% (¥2,172m / ¥43,798m), suggesting effective cost control and operating leverage. The company’s DuPont ROE is 16.35%, supported by a net margin of 3.33%, high asset turnover of 2.589x, and moderate financial leverage of about 1.90x. Liquidity remains comfortable with a current ratio of about 1.85x (¥11,833m / ¥6,400m) and working capital of approximately ¥5,433 million. Solvency appears sound with total liabilities of ¥9,400 million against equity of ¥8,910 million (debt-to-equity circa 1.06x), and implied equity ratio of roughly 52.7% (recalculated from balances). Interest burden is light, with interest expense of only ¥4.2 million and an interest coverage exceeding 500x, leaving ample buffer against rate volatility. The implied effective tax rate is around 29.6% (¥645m / ~¥2,180m), with a small minority interest effect inferred. Cash flow, depreciation, and dividend figures are not disclosed in this dataset; zeros should be interpreted as unreported rather than true zeros. As a result, EBITDA and free cash flow metrics are not assessable from the provided data. Despite these disclosure gaps, the available figures indicate improving profitability, disciplined cost management, and prudent balance sheet structure. Revenue momentum is muted but profitability gains imply efficiency improvements and mix or scale benefits. Overall, the quarter reflects steady execution with a strong ROE and robust liquidity, albeit with limited visibility on cash generation and capital allocation due to unreported cash flow and dividend data.

Profitability Analysis

ROE is 16.35%, decomposed as Net Profit Margin 3.33% × Asset Turnover 2.589 × Financial Leverage 1.90, indicating returns are driven primarily by high asset turnover and improved operating efficiency rather than excessive leverage. Gross margin is 12.7% (¥5,584m/¥43,798m), reflecting a services-heavy, asset-light profile; stability here supports earnings predictability. Operating margin is approximately 5.0%, up YoY given operating income growth outpacing revenue (+11.4% vs +0.1%), pointing to SG&A discipline and operating leverage. Ordinary income (¥2,180m) broadly matches operating income, implying minimal non-operating drag and negligible interest burden (¥4.2m). Net margin improved to 3.33%; with an implied tax rate near 29.6% and minor non-controlling interests, bottom-line conversion from operating profit is healthy. Interest coverage is exceptionally high (~520x), reinforcing that profitability is not reliant on favorable financing. With depreciation unreported, EBITDA cannot be assessed; however, the small interest charge suggests capital intensity remains low. Overall, margin quality appears solid, with operating leverage evident in the quarter and a business mix consistent with recurring management/service fees.

Growth Assessment

Revenue growth was +0.1% YoY to ¥43,798 million, indicating a flat market or deliberate portfolio rationalization; sustainability likely hinges on unit growth under management and retention. Operating income growth of +11.4% and net income growth of +12.3% show earnings outpacing sales via cost optimization and scale effects. Gross profit of ¥5,584 million with a 12.7% margin suggests stable pricing and service mix. With ordinary income roughly equal to operating income, growth is fundamentally operational rather than financial. The implied tax rate (~29.6%) and minor minority interests are consistent with normalized profitability. Given the asset-light profile (high asset turnover of 2.589x), incremental growth can translate efficiently to profit if utilization and occupancy remain stable. Outlook depends on throughput metrics (managed units, occupancy, churn) and cost inflation management; absent cash flow data, capex needs and reinvestment intensity cannot be assessed here. Near-term, continued discipline in SG&A and mix optimization should support profit quality even with modest topline expansion.

Financial Health

Total assets are ¥16,918 million and total equity ¥8,910 million, implying an equity ratio of ~52.7% (recalculated), despite the reported equity ratio field showing zero (unreported). Total liabilities are ¥9,400 million, yielding a debt-to-equity of ~1.06x, which is moderate for a service business. Current assets are ¥11,833 million against current liabilities of ¥6,400 million, producing a current ratio of ~1.85x and working capital of ~¥5,433 million, both supportive of near-term liquidity. Interest expense is only ¥4.2 million and interest coverage is >500x, indicating minimal refinancing or rate risk in the period. Asset turnover of 2.589x signals efficient asset use and supports returns without heavy balance sheet expansion. With cash and equivalents unreported, absolute liquidity buffers cannot be quantified from this dataset, but the strong current ratio is reassuring. Overall solvency and liquidity appear robust based on the available non-zero balances.

Cash Flow Quality

Operating, investing, and financing cash flows are unreported in this dataset (zeros indicate nondisclosure), so we cannot compute OCF/NI, free cash flow, or capex intensity. Earnings quality must therefore be inferred from accrual metrics and margins: stable gross margin (12.7%) and improved operating margin (~5.0%) suggest disciplined cost control. Minimal interest expense implies low hidden financing costs. Working capital looks adequate (¥5,433m), and with high asset turnover, the model likely has limited capital intensity. However, without OCF/NI or depreciation, we cannot assess accruals rigor, cash conversion cycle, or maintenance vs growth capex. Conclusion: profit quality appears sound on an accrual basis, but cash generation and conversion remain a key disclosure gap to monitor.

Dividend Sustainability

Dividend data (DPS, payout, FCF coverage) are unreported in this dataset. With EPS at ¥86.64 and ROE at 16.35%, internal capital generation appears healthy, which could support distributions or reinvestment depending on policy. The balance sheet is moderately leveraged with strong liquidity, providing flexibility. That said, absent OCF and FCF disclosure, we cannot evaluate dividend coverage by cash or sustainability under stress scenarios. Policy outlook should be guided by management’s stated capital allocation priorities (growth investments vs. returns to shareholders) once disclosed in fuller filings.

Risk Assessment

Business Risks:

• Exposure to property leasing and management cycles, including occupancy and rent trend volatility
• Master-lease and guarantee obligations that can concentrate risk during downturns
• Client concentration risk if large owners or developers account for significant revenue
• Cost inflation (personnel, subcontracting) potentially pressuring margins
• Regulatory/compliance changes in real estate management and tenant protection
• Competition from large property managers and tech-enabled platforms

Financial Risks:

• Limited visibility on cash flow generation and capex due to unreported CF statements
• Potential working capital swings tied to deposits, payables, or guarantee reserves
• Interest rate increases (albeit current interest burden is low) affecting future financing costs
• Minority interests and tax rate variability impacting net margins

Key Concerns:

• Flat revenue growth (+0.1% YoY) while sustaining margin expansion
• Lack of disclosed OCF/FCF and DPS impedes assessment of cash-based returns
• Sensitivity to occupancy and delinquency rates inherent in property management/guarantee businesses

Investment Implications

Key Takeaways:

• Profit growth outpaced sales, reflecting operating leverage and cost control
• ROE at 16.35% is strong, driven by high asset turnover and moderate leverage
• Liquidity and solvency are sound with a current ratio ~1.85x and equity ratio ~53% (implied)
• Interest burden is negligible, supporting earnings resilience
• Disclosure gaps on cash flows and dividends remain the main analytical limitation

Metrics to Watch:

• Managed units growth, occupancy, and churn
• Gross and operating margin trajectory (SG&A ratio)
• OCF/Net income and FCF once disclosed
• Equity ratio and liabilities mix (short vs long term)
• Ordinary income vs operating income gap (non-operating items)
• Effective tax rate and minority interests
• Asset turnover and working capital efficiency

Relative Positioning: Within Japan’s property management/real estate services cohort, JPMC appears asset-light with above-average ROE and strong interest coverage; margins are moderate but improving, while topline growth is currently subdued versus peers pursuing volume expansion.

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