OHKI HEALTHCARE HOLDINGS CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥182.75B
• Operating Income: ¥1.20B
• Net Income: ¥972M
• EPS: ¥86.57

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 FY2026 Q2 (cumulative), Oki Healthcare Holdings (34170) delivered solid top-line growth and strong operating leverage, with revenue of ¥182.75bn (+4.4% YoY) and operating income of ¥1.197bn (+45.8% YoY). The operating margin improved to approximately 0.65% from an estimated ~0.47% in the prior-year period, indicating tighter SG&A control and/or modest gross margin enhancement. Gross profit was ¥8.691bn, implying a gross margin of 4.8%, which remains structurally thin, consistent with the low-margin profile of healthcare/OTC distribution. Ordinary income of ¥1.862bn exceeded operating income, suggesting meaningful non-operating gains (e.g., financial income or other non-operating items). Net income rose 19.5% YoY to ¥1.18bn, a slower increase than operating income, likely reflecting higher taxes and/or extraordinary losses and minority interests. The DuPont framework shows a low net margin (0.65%) offset by high asset turnover (1.261x) and material financial leverage (assets/equity 4.48x), yielding a to-date ROE of 3.65% for the period; note this is a mid-year figure and not annualized. On the balance sheet, total assets were ¥144.92bn with equity of ¥32.36bn, implying an equity ratio of ~22.3% (the reported 0.0% equity ratio is an undisclosed placeholder). Liquidity is adequate with a current ratio of 113.6% and a quick ratio of 85.4%, supported by ¥13.92bn of working capital. Inventories were ¥28.80bn; using period-end inventory and COGS, a rough point-in-time inventory days estimate is ~31–32 days, which appears reasonable for the category. Interest expense was modest at ¥23m, and interest coverage is strong at ~52x, underscoring manageable financial costs despite leverage. Cash flow figures (OCF/FCF) and depreciation are undisclosed (zeros indicate not reported), limiting assessment of cash earnings quality and capex intensity. Dividend data are also undisclosed (DPS and payout shown as zero placeholders), so capital return policy cannot be assessed from this release. Overall, results indicate improved profitability on steady sales growth, good cost discipline, and strong non-operating support, tempered by structurally thin margins, meaningful leverage, and lack of disclosed cash flow data. Key watchpoints include sustainability of margin gains, inventory discipline, the gap between ordinary and operating income, and confirmation of cash conversion in subsequent filings.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 0.65% (Net income ¥1.18bn on revenue ¥182.75bn; thin but improved net result YoY)
• asset_turnover: 1.261x (Revenue ¥182.75bn / Assets ¥144.92bn; efficient for a distributor)
• financial_leverage: 4.48x (Assets ¥144.92bn / Equity ¥32.36bn)
• calculated_ROE: 3.65% (to-date, not annualized)
• interpretation: Low margins are partially offset by high turnover and leverage; improvements in margin flow meaningfully to ROE. margin_quality:
• gross_margin: 4.8% (¥8.691bn / ¥182.75bn), consistent with distribution economics; small improvements matter materially
• operating_margin: ≈0.65% (¥1.197bn / ¥182.75bn); up from ~0.47% in the prior period (implied), reflecting operating leverage
• ordinary_income_margin: ≈1.02% (¥1.862bn / ¥182.75bn); non-operating gains boosted results
• net_margin: 0.65%; net benefit smaller than ordinary due to taxes/extraordinary/minorities operating_leverage: Revenue grew +4.4% YoY while operating income rose +45.8% YoY; operating margin expanded by ~18bps, indicating effective SG&A control and/or mix improvement.

Growth Assessment

revenue_sustainability: Top-line growth of +4.4% YoY is steady and consistent with modest market growth and potential share gains; sustainability depends on key retail customers and product mix. profit_quality: Operating income outpaced sales, indicating real efficiency gains; the spread between ordinary and operating income highlights reliance on non-operating items, which may not be recurring. outlook: If cost discipline persists and gross margin holds, incremental operating leverage can continue; however, thin structural margins and competitive pricing in healthcare/OTC distribution cap upside. Monitoring customer concentration, private-label pressure, and procurement terms is key.

Financial Health

liquidity:

• current_ratio: 113.6% (CA ¥115.91bn / CL ¥101.99bn)
• quick_ratio: 85.4% (ex-inventory; indicates some reliance on inventory turnover for liquidity)
• working_capital: ¥13.92bn; adequate buffer for seasonal swings solvency:
• equity_ratio: ≈22.3% (Equity ¥32.36bn / Assets ¥144.92bn); reported 0.0% is undisclosed
• debt_to_equity: 3.35x (Liabilities ¥108.28bn / Equity ¥32.36bn); typical for distributors with sizable payables
• interest_coverage: ≈52.0x (OI ¥1.197bn / Interest expense ¥23m); low financial risk from interest at present capital_structure: Liabilities are high relative to equity, likely driven by trade payables and short-term funding common in wholesale models; manageable given coverage and liquidity, but sensitive to working capital cycles.

Cash Flow Quality

earnings_quality: Cash flow data (OCF/FCF) and depreciation are undisclosed, preventing direct assessment of cash conversion, accruals, or capex needs. Earnings quality inference relies on working capital discipline and interest coverage, which currently appear reasonable. FCF_analysis: Free cash flow not reported. With no D&A or capex data, we cannot estimate maintenance capex or FCF coverage of earnings. working_capital: Inventories ¥28.80bn (~24.8% of current assets). Point-in-time inventory days estimated at ~31–32 days using period-end inventory and COGS; receivables/payables not disclosed, limiting broader CCC analysis.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are undisclosed (zeros are placeholders). EPS is ¥86.57 for the half-year, but without policy disclosure, payout cannot be inferred. FCF_coverage: Not assessable due to undisclosed OCF and capex. policy_outlook: No guidance provided in the data. Future sustainability depends on cash generation from operations and working capital management; confirmation awaited in subsequent reports.

Risk Assessment

Business Risks:

• Structural margin pressure in healthcare/OTC distribution due to intense price competition
• Customer concentration risk with large drugstore and mass retail chains
• Inventory obsolescence and markdown risk in seasonal or short-shelf-life products
• Supplier terms and procurement volatility affecting gross margin
• Regulatory changes impacting healthcare product marketing and distribution practices
• Private-label expansion by major retailers compressing branded margins

Financial Risks:

• High leverage relative to equity (D/E 3.35x) tied to working capital funding
• Cash flow uncertainty due to undisclosed OCF/FCF and capex
• Thin operating margin (~0.65%) leaves limited buffer against shocks
• Potential interest rate increases raising funding costs despite currently low interest expense
• Reliance on non-operating income to bridge profit from operating to ordinary

Key Concerns:

• Sustainability of recent margin improvement amid competitive pressures
• Lack of disclosed cash flow and depreciation data to validate earnings quality
• Gap between ordinary and operating income, implying non-operating dependency

Investment Implications

Key Takeaways:

• Solid revenue growth (+4.4% YoY) with strong operating leverage (+45.8% YoY OI)
• Operating margin expanded to ~0.65%, an 18bps improvement YoY
• Ordinary income exceeds operating income, highlighting non-operating contributions
• Adequate liquidity (CR 113.6%, QR 85.4%) and strong interest coverage (~52x)
• Leverage meaningful (D/E 3.35x) but typical for a distributor; equity ratio ~22%
• Cash flow, D&A, and dividend data not disclosed; cash conversion yet to be confirmed

Metrics to Watch:

• Gross margin and SG&A ratio trajectory
• Operating vs ordinary income gap (quality of earnings)
• Inventory days and broader working capital metrics
• Operating cash flow and free cash flow once disclosed
• Equity ratio and net debt metrics (if disclosed)
• Interest coverage under varying rate environments

Relative Positioning: Within Japan’s healthcare/OTC distribution space, the company exhibits typical thin margins but benefits from high asset turnover. Recent operating leverage is encouraging, while leverage and limited disclosure on cash flows warrant close monitoring compared to peers that report more granular cash metrics.

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