These are mechanically computed values based on a residual income model. They are not a forecast of market prices or a recommendation of any investment action, and do not predict or guarantee future share prices. Historical values are computed retrospectively using current guidance-achievement statistics.
| Metric | Current Period | Same Period Last Year | YoY |
|---|---|---|---|
| Revenue | ¥2219.4B | ¥2431.2B | -8.7% |
| Operating Income | ¥599.6B | ¥22.9B | +2512.6% |
| Profit Before Tax | ¥598.3B | ¥0.6B | +96401.6% |
| Net Income | ¥450.4B | ¥-5.7B | +8000.9% |
| ROE | 10.7% | -0.2% | - |
This quarter’s results showed a substantial increase in operating income and net income due to temporary gains on asset disposals associated with business restructuring, despite an 8.7% year-on-year decline in revenue; the improvement in underlying earnings power was limited. Revenue was ¥2,219.4B (¥2,431.2B in the same period last year, YoY -8.7%), operating income was ¥599.6B (¥22.9B in the same period last year, YoY +2,512.6%), profit before tax (IFRS) was ¥598.3B (¥0.6B in the same period last year), and profit attributable to owners of the parent was ¥451.1B (¥-7.4B in the same period last year), representing a return to profitability. The primary drivers of the increase in profit were a gain on sales of investments in affiliates of ¥454.5B associated with the sale of shares in DuPont Teijin Advanced Papers Co., Ltd. and other companies, and a gain on sales of property, plant and equipment of ¥49.9B. Excluding these items, business profit was limited to ¥123.1B (¥78.5B in the same period last year, +56.9%).
【Revenue】Revenue was ¥2,219.4B, a year-on-year decline of 8.7%. By segment, Apparel & Industrial Fibers, which accounted for 41.3% of the revenue mix, grew to ¥917.0B (+11.7%), while Electronics & Energy increased to ¥452.7B (+23.5%). In contrast, Specialty Materials declined sharply to ¥479.2B (-42.7%). The decline in this segment was primarily attributable to deconsolidation associated with the sale of shares and does not solely indicate a contraction in demand for the underlying business. Healthcare & Life Solutions was approximately in line with the previous year at ¥329.5B (-2.6%).
【Profit and Loss】Operating income surged to ¥599.6B (YoY +2,512.6%), but the primary drivers were temporary factors unrelated to the core business. Other income of ¥507.2B mainly comprised a gain on sales of investments in affiliates of ¥454.5B and a gain on sales of property, plant and equipment of ¥49.9B, which offset negative factors including special retirement payments of ¥21.5B. Business profit excluding temporary factors was ¥123.1B (¥78.5B in the same period last year, +56.9%). By segment, business profit in Electronics & Energy was ¥85.3B (+67.7%, profit margin 18.9%), making it the largest contributor to the increase in profit. Healthcare & Life Solutions also increased to ¥45.8B (+14.5%), while Specialty Materials, despite posting a loss of ¥-10.3B, improved from ¥-17.7B in the previous year. Profit attributable to owners of the parent was ¥451.1B, representing a return to profitability. These results constituted an increase in profit despite declining revenue, and the sustainability of the increase in profit must be assessed based on the trend in business profit from the next quarter onward, when the reversal of temporary factors becomes apparent.
Business profit by segment (an indicator of recurring earnings power excluding temporary gains and losses) was as follows.
Total business profit was ¥123.1B. Electronics & Energy and Healthcare & Life Solutions secured double-digit profit margins and drove company-wide earnings. Specialty Materials remained loss-making but was on an improving trend.
【Profitability】The operating margin improved substantially to 27.0% from 0.9% in the same period last year, while the net profit margin (attributable to owners of the parent) also increased to 20.3% (from -0.3% in the same period last year). However, the business profit margin excluding temporary gains on asset disposals was 5.5% (business profit of ¥123.1B / revenue of ¥2,219.4B), and the gross margin improved by +3.4pt to 26.4% from 23.0% in the same period last year. 【Cash Flow Quality】Operating cash flow (OCF) was ¥172.5B, only 0.38 times profit attributable to owners of the parent of ¥451.1B, indicating limited cash conversion of earnings. 【Investment Efficiency】ROE was 10.7%, and quarterly total asset turnover was 0.234 times. 【Financial Soundness】The equity ratio was 43.7%, improving by +4.1pt from 39.6% in the same period last year. Against total interest-bearing debt of ¥3,003.8B, the Company held cash and cash equivalents of ¥1,410.3B, resulting in net interest-bearing debt of approximately ¥1,593.5B (0.38 times net assets).
Cash flow from operating activities was ¥172.5B, an increase of +3.8% year on year, but remained at 0.38 times profit attributable to owners of the parent of ¥451.1B, indicating a significant divergence between earnings and cash flow. This was because the gain on sales of investments in affiliates of ¥454.5B and the gain on sales of property, plant and equipment of ¥49.9B, which boosted operating income, were recognized in cash flow from investing activities, while a decrease in trade payables of ¥-74.3B was a cash outflow factor. Cash flow from investing activities recorded a substantial inflow of +¥363.5B, primarily due to proceeds from sales of investments of ¥451.6B (including the sale of shares in DuPont Teijin Advanced Papers and other transactions) and proceeds from sales of property, plant and equipment of ¥52.1B, which exceeded capital expenditures of ¥-114.9B and acquisitions of intangible assets of ¥-39.4B. Cash flow from financing activities was ¥-178.1B, mainly due to a net decrease in short-term borrowings of ¥-117.3B and dividend payments of ¥-48.2B. Free cash flow (OCF + investing CF) was ¥536.0B, but the majority depended on temporary inflows from asset sales; recurring funds generated after deducting capital expenditures from OCF were limited to ¥57.6B. Cash and cash equivalents increased by +¥365.8B from ¥1,044.7B at the beginning of the period to ¥1,410.3B at the end of the period.
The increase in profit this quarter was driven primarily by temporary factors rather than an improvement in recurring earnings power, warranting caution from an earnings-quality perspective. Of operating income of ¥599.6B, most of other income of ¥507.2B consisted of a gain on sales of investments in affiliates of ¥454.5B associated with the sale of shares in DuPont Teijin Advanced Papers Co., Ltd. and other companies, and a gain on sales of property, plant and equipment of ¥49.9B, which offset non-recurring negative factors including special retirement payments of ¥-21.5B. Business profit excluding these temporary factors was ¥123.1B (¥78.5B in the same period last year), and this level is appropriate for evaluating recurring earnings power. Comprehensive income was ¥557.5B (¥558.3B attributable to owners of the parent). The difference of ¥107.3B from net income of ¥451.1B was primarily attributable to foreign currency translation adjustments of +¥49.9B and cash flow hedges of +¥31.7B, representing valuation-related factors centered on foreign exchange fluctuations. The fact that OCF was only 0.38 times net income should also be noted as an accrual-related factor indicating delayed cash conversion of earnings.
Progress against the full-year company forecasts was 24.7% for revenue (¥2,219.4B/¥9,000.0B), 85.7% for operating income (¥599.6B/¥700.0B), and 100.2% for net income (attributable to owners of the parent) (¥451.1B/¥450.0B). Profit indicators are therefore ahead of schedule, approaching or exceeding the full-year plan in a single quarter. This excess progress resulted from the advance recognition in Q1 of temporary factors, including gains on the sale of shares in DuPont Teijin Advanced Papers. While the earnings forecast for the current quarter has been revised (Yes), the dividend forecast remains unchanged at ¥50 (No). Basic EPS for Q1 was ¥233.81, compared with the full-year EPS forecast of ¥233.26, exceeding the full-year forecast in a single quarter. The trends in business profit and OCF over the remaining 3 quarters will determine the full-year results.
The full-year dividend forecast is ¥50 per share, with no revision to the dividend forecast for the current quarter. Based on the full-year EPS forecast of ¥233.26, the payout ratio is approximately 21.4% (¥50/¥233.26). Dividend payments during the current quarter were ¥48.2B, maintaining approximately the same level as ¥48.2B in the same period last year. Share repurchases were minimal at ¥0.02B, with dividends remaining the primary form of shareholder returns. OCF of ¥172.5B during the current quarter comfortably exceeded dividend payments of ¥48.2B, ensuring funding for dividends.
Reliance on temporary gains and reversal risk: Of operating income of ¥599.6B in the current quarter, the portion excluding business profit (¥123.1B) consisted of temporary factors including gains on sales of investments in affiliates and gains on sales of property, plant and equipment. Progress against the full-year operating income forecast of ¥700.0B has already reached 85.7%, and the remaining 3 quarters will center on the accumulation of business profit without temporary gains, creating the possibility of quarterly declines in profit.
Working capital burden and cash generation: Inventory of ¥2,145.8B (¥2,088.2B at the end of the previous fiscal year) and accounts receivable of ¥1,656.4B indicate a high level of working capital, while OCF of ¥172.5B was only 0.38 times net income of ¥451.1B. Trade payables decreased by ¥-74.3B, making management of the cash collection and payment cycle a key focus going forward.
Short-term financing structure: Bonds and short-term borrowings (current) totaled ¥1,413.0B, approximately the same level as cash and cash equivalents of ¥1,410.3B. Although financial expenses were modest at ¥17.8B, if the refinancing environment for short-term funds changes, higher financing costs could affect financial expenses.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 27.0% | 3.3% (0.9%–7.7%) | +23.7pt |
| Net Profit Margin | 20.3% | 2.2% (0.3%–6.1%) | +18.1pt |
The Company’s profitability metrics substantially exceed the industry median; however, it should be noted that temporary gains on share sales and other items contributed to the current period.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (Year on Year) | -8.7% | 7.5% (0.4%–14.5%) | -16.2pt |
The revenue growth rate was below the industry median, and the Company was in a revenue-decline phase during the current period due to the impact of business portfolio restructuring (deconsolidation associated with the sale of shares).
※Source: Compiled by the Company
The substantial increase in profit was almost entirely attributable to temporary factors (gains on sales of investments in affiliates and gains on sales of property, plant and equipment). Excluding these items, business profit was ¥123.1B (¥78.5B in the same period last year, +56.9%), indicating that core earnings power itself also improved.
Progress against the full-year plan has already reached 85.7% for operating income and 100.2% for net income, but this was due to the advance recognition of temporary gains, and the potential for results to exceed the full-year plan over the remaining 3 quarters may be limited.
OCF remained at only 0.38 times net income, while working capital, including inventory and accounts receivable, remained at a high level. Improving cash generation will be a key structural focus going forward.
This is a mechanically calculated reference range based solely on publicly available data using a residual income model (Ohlson-type model with an explicit 5-year fade). It is not a forecast of the market share price or a recommendation of any specific investment action.
| Scenario | Theoretical Share Price |
|---|---|
| bear | ¥2,246 |
| base | ¥2,330 |
| bull | ¥2,365 |
| Calculation Assumption | Value |
|---|---|
| Book Value per Share (BPS) | ¥2,152 |
| Adjusted Forecast EPS | ¥256.6 |
| Cost of Equity r | 9.15% (10-year Japanese government bond 2.65% + equity risk premium 6.00% + size premium 0.50%) |
| Residual Income Persistence Coefficient ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 21.4% |
| Forecast EPS Confidence Adjustment | ×1.100 (based on the lead in progress against the full-year forecast) |
| implied PBR / PER |
Sensitivity: ¥2,263–¥2,399 at ±1% for the cost of equity, and ¥2,325–¥2,336 at ±0.1 for ω.
Notes:
(Calculation model: Residual income model / Interest rate reference month: 2026-06 / This figure does not forecast or guarantee the future share price)
This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly available earnings data. Investment decisions should be made at your own discretion and responsibility, after consulting professionals as necessary.
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| 1.08 times / 9.1 times |