MEEQ Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥3.45B
• Operating Income: ¥664M
• Net Income: ¥432M
• EPS: ¥37.78

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

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

ミーク株式会社 (332A0) reported FY2026 Q2 consolidated results under JGAAP that show solid profitability, conservative leverage, and healthy cash generation from operations, albeit with limited disclosure in certain areas. Revenue was ¥3,454m, flat YoY per the provided tag, while operating income was ¥664m and net income ¥432m, both also indicated as flat YoY. Gross profit of ¥1,292.9m implies a gross margin of 37.4%, evidencing sound pricing power and/or favorable cost management. Operating margin of roughly 19.2% (¥664m/¥3,454m) and EBITDA margin of 22.2% indicate a lean SG&A structure and modest non-cash charges (D&A ¥103.8m). Ordinary income (¥667m) was slightly above operating income, suggesting small net non-operating gains, while interest expense was immaterial at ¥0.19m, yielding an extremely high interest coverage of ~3,495x. DuPont analysis shows ROE of 7.74% driven by a 12.51% net margin, 0.473x asset turnover, and modest financial leverage of 1.31x. On the balance sheet, total assets were ¥7,295m and equity ¥5,580m, implying an equity ratio of about 76.5% (though the reported equity ratio field shows 0.0%, likely undisclosed in XBRL tagging). Liquidity appears strong: current assets ¥6,136.1m vs. current liabilities ¥1,648.8m, translating to a current ratio of 372% and working capital of ¥4,487.2m. Operating cash flow was ¥518.3m, exceeding net income (OCF/NI 1.20), which supports earnings quality; however, investing cash flows are undisclosed (tagged zero), preventing a definitive free cash flow assessment. Dividend data show DPS and payout ratio at 0, implying no distribution in the period; with robust OCF and low financial risk, capacity for returns appears present but policy is unclear. Asset turnover at 0.473x is moderate, and with the current capital structure, incremental growth will likely hinge on revenue expansion and working capital efficiency rather than leverage. The effective tax burden, recalculated from disclosed tax expense (¥235.5m) and pre-tax income proxy (ordinary income ¥667m), is approximately 35%, despite the provided “effective tax rate” tag showing 0.0%. The absence of inventories, cash balance, capex, and share count in the disclosed fields limits finer diagnostics (e.g., quick ratio, FCF, per-share equity metrics). Overall, the company presents a quality earnings profile with conservative risk, but the flat YoY tags and incomplete disclosures constrain visibility on growth trajectory and capital allocation.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 12.51% (¥432m/¥3,454m)
• asset_turnover: 0.473x (¥3,454m/¥7,295m)
• financial_leverage: 1.31x (¥7,295m/¥5,580m)
• calculated_ROE: 7.74% (matches reported DuPont figure)
• ROA_proxy: 5.9% (¥432m/¥7,295m) margin_quality:
• gross_margin: 37.4% (¥1,292.9m/¥3,454m)
• operating_margin: 19.2% (¥664m/¥3,454m)
• EBITDA_margin: 22.2%
• commentary: Margins indicate efficient cost control and pricing discipline. Non-operating items had minimal impact (ordinary income only ¥3m above operating income). Tax burden appears normal (~35% recalculated), underpinning quality of earnings. operating_leverage: With stable revenue (flat YoY tag) and strong operating margin, the cost base appears well managed. D&A at ~3.0% of revenue suggests a relatively light asset intensity; incremental volumes should flow through to operating profit, implying moderate positive operating leverage if growth resumes.

Growth Assessment

revenue_sustainability: Reported YoY is +0.0%, indicating no growth signal in the tag; underlying sustainability cannot be assessed without segment or volume/price data. The 37.4% gross margin suggests stable unit economics. profit_quality: Operating margin of ~19% and OCF/NI of 1.20 indicate profits are backed by cash generation. Minimal interest burden and limited non-operating noise support quality. outlook: With low leverage and ample liquidity, the company is positioned to support organic initiatives. However, absent disclosed capex, order trends, or backlog, visibility into medium-term growth is limited. Asset turnover at 0.473x leaves room for efficiency gains or scale benefits.

Financial Health

liquidity:

• current_ratio: 372.1% (¥6,136.1m / ¥1,648.8m)
• quick_ratio: 372.1% (inventories undisclosed, equals current ratio by construction)
• working_capital: ¥4,487,212,000
• cash_position_note: Cash & equivalents are undisclosed (tagged zero), so near-term liquidity is inferred from total current assets rather than cash specifically. solvency:
• debt_to_equity: 0.31x (¥1,715.3m / ¥5,580m)
• interest_coverage: ≈3,494.7x (EBIT/interest expense)
• equity_ratio_proxy: ≈76.5% (¥5,580m / ¥7,295m), despite the reported field showing 0.0%
• commentary: Balance sheet is conservatively financed with ample equity; solvency risk is low given minimal interest burden. capital_structure: The company relies predominantly on equity financing with modest liabilities. Given strong liquidity and low financial leverage, there is capacity for investment without stressing the balance sheet.

Cash Flow Quality

earnings_quality: OCF/NI of 1.20 (¥518.3m / ¥432m) indicates earnings are cash-convertible. Limited non-operating items and normal tax burden further support quality. FCF_analysis: Investing CF is undisclosed; therefore, FCF cannot be reliably computed. EBITDA (¥767.8m) comfortably covers D&A (¥103.8m), suggesting internal funding capacity for maintenance capex. working_capital: High working capital (¥4,487.2m) supports operations. Without line-item details (receivables, payables, inventories), we cannot assess WC turns; however, the positive OCF implies no material working capital drag in the period.

Dividend Sustainability

payout_ratio_assessment: Payout ratio tagged at 0.0% with DPS at ¥0 suggests no dividend distribution for the period. FCF_coverage: Not assessable due to undisclosed investing cash flows; OCF is healthy at ¥518.3m, which would typically support distributions if policy permits. policy_outlook: With low leverage and strong liquidity, financial capacity for dividends exists, but actual policy remains unclear from disclosures. Future distributions will hinge on growth investment needs and board policy.

Risk Assessment

Business Risks:

• Revenue growth uncertainty given flat YoY tags and limited disclosure on demand drivers
• Potential pricing pressure or input cost volatility affecting gross margin
• Operational cost inflation (labor, logistics) that could compress operating margin
• Execution risks around scaling and maintaining service quality/product mix
• Customer concentration risk (not disclosed) potentially impacting revenue stability

Financial Risks:

• Working capital concentration in certain current asset categories (cash, receivables) not fully disclosed
• Limited visibility on capex and investment needs (investing CF undisclosed)
• Interest rate risk is low currently but could rise if leverage increases
• Tax rate variability (effective tax rate recalculated ~35%) impacting net earnings

Key Concerns:

• Incomplete disclosures (cash balance, inventories, capex, share count) constrain detailed analysis
• Flat reported YoY growth metrics hinder assessment of momentum
• Dependence on operating efficiency and asset turnover improvements for ROE uplift

Investment Implications

Key Takeaways:

• Strong operating and EBITDA margins (≈19% and 22%) underscore healthy core profitability
• ROE of 7.74% driven by solid margin and modest leverage; room for improvement via growth and efficiency
• OCF exceeds net income (1.20x), indicating good earnings quality
• Balance sheet conservative with low debt (D/E ~0.31x) and strong liquidity (current ratio ~372%)
• Visibility on growth investments and capital returns is limited due to undisclosed investing CF and DPS at zero

Metrics to Watch:

• Top-line growth and order/backlog indicators
• Gross margin trajectory and SG&A-to-sales ratio
• OCF/NI and working capital turns (DSO/DPO/DIO when disclosed)
• Capex and investing cash flows to refine FCF and reinvestment rate
• ROE vs. WACC spread and asset turnover improvements
• Dividend policy announcements and potential share repurchases

Relative Positioning: Based on disclosed metrics, the company exhibits above-average margins and conservative leverage relative to many TSE small/mid-cap peers, but limited disclosure on growth drivers and capital allocation tempers comparative clarity.

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