| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥584.9B | ¥542.3B | +7.9% |
| Operating Income / Operating Profit | ¥141.0B | ¥122.7B | +15.0% |
| Ordinary Income | ¥147.4B | ¥125.6B | +17.4% |
| Net Income / Net Profit | ¥78.1B | ¥63.9B | +22.3% |
| ROE | 10.8% | 9.7% | - |
For the fiscal year ending March 2026, revenue was ¥584.9B (YoY +¥42.6B +7.9%), Operating Income was ¥141.0B (YoY +¥18.3B +15.0%), Ordinary Income was ¥147.4B (YoY +¥21.9B +17.4%), and Net Income attributable to owners of parent was ¥78.1B (YoY +¥14.2B +22.3%), resulting in year-on-year increases in both revenue and profit. Operating margin improved to 24.1% (YoY +1.5pt) and net margin to 13.4% (YoY +1.9pt). High growth at overseas subsidiaries (Revenue +31.2%, Segment Profit +48.3%) and improvement in gross margin (38.6%, YoY +1.3pt) were key drivers, while SG&A ratio decreased to 14.5% (YoY -0.2pt). ROE rose to 10.8% versus the prior year, and proactive capital expenditures (CapEx ¥97.6B, YoY +76.7%) strengthened the growth base.
[Revenue] Revenue totaled ¥584.9B (YoY +7.9%), marking an increase. By segment, Thermal Spray Processing (standalone) was ¥407.1B (composition 69.7%, YoY +3.8%) and continued stable growth as the core business. Overseas subsidiaries recorded ¥122.7B (composition 21.0%, YoY +31.2%) with strong growth and were the main drivers of company-wide expansion. Domestic subsidiaries were ¥28.8B (composition 4.9%, YoY +8.6%) and performed steadily, while Other segments contracted to ¥24.7B (composition 4.2%, YoY -14.3%). Demand expansion for parts for semiconductor/FPD manufacturing equipment and industrial machinery parts supported revenue growth.
[Profitability] Cost of sales was ¥359.1B, improving gross margin to 38.6% (YoY +1.3pt). SG&A was ¥84.7B (SG&A ratio 14.5%, YoY -0.2pt) and was controlled, resulting in Operating Income of ¥141.0B (YoY +15.0%) and an Operating Margin of 24.1% (YoY +1.5pt). Non-operating income of ¥7.3B included subsidy income ¥4.2B and foreign exchange gains ¥1.3B; non-operating expenses were minor at ¥0.9B, producing Ordinary Income of ¥147.4B (YoY +17.4%). Extraordinary items were negligible (Extraordinary gains ¥0.3B, Extraordinary losses ¥0.3B, of which impairment losses ¥1.6B), so Profit Before Tax stood at ¥147.4B. After corporate taxes ¥38.9B (effective tax rate 26.4%) and net income attributable to non-controlling interests ¥7.9B, Net Income attributable to owners of parent was ¥78.1B (YoY +22.3%). In conclusion: higher revenue and higher profit.
Thermal Spray Processing (standalone) posted Segment Profit of ¥88.0B (YoY -0.7%) with a Segment Profit Margin of 21.0%. Sales increased slightly while profit remained flat, but it remains the primary profit source. Overseas subsidiaries reported Segment Profit of ¥49.4B (YoY +48.3%) with a standout Segment Profit Margin of 40.0%, significantly contributing to company Operating Income. Domestic subsidiaries posted Segment Profit of ¥3.3B (YoY -4.3%) with a Segment Profit Margin of 9.8%—profitability is low but sales are increasing. Other segments recorded Segment Profit of ¥2.8B (YoY -33.4%) with a profit margin of 11.2% and contracted. The shift toward high-profitability at overseas subsidiaries and changes in sales composition were the primary causes of company-wide margin expansion.
[Profitability] Operating Margin 24.1% (YoY +1.5pt), Ordinary Income Margin 25.2% (YoY +2.0pt), Net Margin 13.4% (YoY +1.9pt) — profitability improved at each stage. ROE improved to 10.8% (prior year 6.4%), and ROA rose to 8.8%. Gross Margin 38.6% (YoY +1.3pt) and SG&A Ratio 14.5% (YoY -0.2pt) indicate efficiency improvements on both cost and SG&A fronts. [Cash Quality] Operating Cash Flow (OCF) ¥77.5B is 0.99x relative to Net Income ¥78.1B, slightly below the 1.0 threshold. Increases in working capital (Accounts Receivable increase ¥19.3B, Inventory increase ¥10.9B, Accounts Payable decrease ¥15.5B) constrained cash conversion. Free Cash Flow was negative at -¥22.1B, attributable to upfront large-scale CapEx (¥97.6B). [Investment Efficiency] Total Asset Turnover 0.66x, Construction in Progress ¥64.5B reflecting active growth investment. R&D intensity 2.5%. [Financial Soundness] Equity Ratio 81.4% (prior year 80.5%), Current Ratio 398%, Debt/Equity ratio 9.0% — extremely healthy. Long-term borrowings increased to ¥52.5B (YoY +181.5%) but leverage remains low, appropriate as financing for investments.
OCF was ¥77.5B (YoY -14.6%). Starting from Profit Before Tax ¥147.4B, depreciation ¥37.9B was added back, while increases in working capital (Accounts Receivable increase ¥19.3B, Inventory increase ¥10.9B, Accounts Payable decrease ¥15.5B) and corporate tax payments ¥44.5B were cash outflows. Working capital expansion was driven mainly by buildup of work-in-progress (¥31.0B) amid demand expansion and extended collection periods for receivables. Investing Cash Flow was -¥99.6B, including CapEx -¥97.6B as part of continued aggressive growth investment. Financing Cash Flow was -¥11.6B; proceeds from long-term borrowings ¥52.6B less long-term borrowings repayments ¥15.3B partly funded investments, while dividend payments ¥44.6B and short-term borrowings repayments ¥1.9B were cash outflows. Free Cash Flow was -¥22.1B, but liquidity (cash and deposits ¥147.3B, short-term securities ¥35.0B) is ample and there is no concern over funding.
Operating Income ¥141.0B is recurring profit from core operations, and Operating Margin 24.1% exceeds historical levels. Non-operating income ¥7.3B is small at 1.2% of Revenue and consists of subsidy income ¥4.2B (temporary factor), foreign exchange gains ¥1.3B, and interest income received ¥0.2B. Non-operating expenses ¥0.9B include interest expense paid ¥0.4B and are minor. Extraordinary items are roughly balanced (Extraordinary losses ¥0.3B, Extraordinary gains ¥0.3B), with impairment losses of ¥1.6B already recorded. Ordinary Income ¥147.4B equals Profit Before Tax ¥147.4B, and Net Income ¥78.1B (after tax and non-controlling interests) indicates that the bulk of profit stems from ordinary business activities. Accruals show OCF ¥77.5B versus Net Income ¥78.1B for a ratio of 0.99, which is within a healthy range, but note that working capital increases have slightly dampened cash conversion.
For FY ending March 2027, full-year guidance is Revenue ¥650.0B (YoY +11.1%), Operating Income ¥150.0B (YoY +6.4%), Ordinary Income ¥150.0B (YoY +1.7%), and Net Income attributable to owners of parent ¥102.3B (YoY +31.0%). Operating Margin is assumed at 23.1% (this year 24.1% vs -1.0pt), a somewhat conservative assumption, while double-digit revenue growth is expected. EPS is planned at 172.02円, a slight increase. Progress rates are: Revenue 90.0% (¥584.9B/¥650.0B), Operating Income 94.0% (¥141.0B/¥150.0B), Ordinary Income 98.3% (¥147.4B/¥150.0B), all progressing ahead of plan. Continued high growth at overseas subsidiaries and ramp-up of CapEx are prerequisites for full-year achievement.
Dividends are year-end ¥48円 (combined with interim ¥37円 for an annual total of ¥85円), yielding a Payout Ratio of 50.2%. Prior year annual dividend was ¥30円, representing a large increase. The payout ratio falls within a sustainable range (around 50%), but Free Cash Flow this period is negative at -¥22.1B, so dividend funding is drawn from ample liquidity (cash and deposits ¥147.3B) and retained earnings (¥612.7B). No share buybacks were executed; shareholder returns are dividend-focused. Stable continuation of dividends depends on normalization of working capital and realization of CapEx returns leading to positive Free Cash Flow.
Working Capital Expansion Risk: Increases in Accounts Receivable ¥168.6B (YoY +13.1%) and Inventory ¥107.2B (YoY +12.2%) have expanded working capital. Work-in-progress accounts for 28.9% of Inventory, suggesting longer production lead times and extended collection cycles. OCF/Net Income ratio of 0.99 has fallen near the threshold; if demand fluctuations or delivery delays occur, cash generation could be further pressured.
Investment Recovery Risk: CapEx ¥97.6B (2.6x depreciation ¥37.9B) and accumulating Construction in Progress ¥64.5B reflect aggressive investment. If commissioning of new equipment and yield improvements do not progress as planned, payback periods may lengthen and fixed costs may increase, reducing profitability.
Overseas Business Concentration Risk: Overseas subsidiaries account for Segment Profit ¥49.4B (33.5% of company Ordinary Income) and deliver a high Segment Profit Margin of 40.0%, but require advanced local talent acquisition, quality control, and supply-chain management. Operational troubles at overseas sites or geopolitical risks could materially impact company performance.
Profitability / Return
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 24.1% | 7.8% (4.6%–12.3%) | +16.4pt |
| Net Margin | 13.4% | 5.2% (2.3%–8.2%) | +8.2pt |
Operating Margin 24.1% exceeds the manufacturing industry median of 7.8% by +16.4pt, and Net Margin is +8.2pt higher, demonstrating outstanding profitability within the industry.
Growth / Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 7.9% | 3.7% (-0.4%–9.3%) | +4.2pt |
Revenue growth of 7.9% exceeds the industry median of 3.7% by +4.2pt and indicates a stable growth trajectory.
※Source: Company compilation
Establishment of High-Profitability Structure: Operating Margin 24.1% exceeds the industry median by +16.4pt, and the overseas subsidiary’s Segment Profit Margin of 40.0% has boosted company margins. Improvements in gross margin and SG&A ratio, along with a shift to a higher-profitability product mix, indicate a structural improvement in profitability.
Acceleration of Growth Investment and Cash Flow: CapEx ¥97.6B (2.6x depreciation) and accumulation of Construction in Progress ¥64.5B suggest expansion of production capacity and a foundation for future revenue growth. However, OCF ¥77.5B and Free Cash Flow -¥22.1B show that working capital increases and aggressive investment have temporarily constrained cash generation. While the Payout Ratio of 50.2% is within a sustainable range, stable continuation of returns requires normalization of working capital and Free Cash Flow turning positive via CapEx recovery.
Progress Against Forecasts and Financial Soundness: Progress rates to the full-year guidance are high—Operating Income 94.0% and Ordinary Income 98.3%—so plan achievement likelihood is high. The company maintains an extremely sound financial position with Equity Ratio 81.4% and Debt/Equity 9.0%, while using long-term borrowings to fund growth investments, preserving significant leverage capacity.
This report is an earnings analysis document automatically generated by AI after analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific securities. Industry benchmarks are reference information compiled by the Company based on public financial statements. Investment decisions should be made at your own responsibility, and, if necessary, after consulting a professional advisor.