C.I.MEDICAL CO.,LTD. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥69.12B
• Operating Income: ¥3.32B
• Net Income: ¥5.36B
• EPS: ¥64.18

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

ChiAIMedical (35400) reported strong top-line and operating recovery in FY2025 Q3, with revenue at ¥69.1bn (+52.8% YoY) and operating income at ¥3.32bn (+199.8% YoY). Ordinary income of ¥3.50bn exceeded operating income, implying positive non-operating contributions despite ¥38m in interest expense. Net income was ¥3.21bn, declining 39.9% YoY, suggesting either prior-year one-offs/extraordinary gains or current-year below-the-line headwinds; this creates a divergence between operating and bottom-line trends. DuPont ROE is a solid 10.63%, driven by a 4.64% net margin, asset turnover of 1.335x, and financial leverage of 1.72x. Gross margin is 19.4%, consistent with a distribution/platform model where scale and mix management are key to profitability. Interest coverage is robust at 87.4x, indicating limited near-term pressure from financing costs. Balance sheet shows total assets of ¥51.8bn and equity of ¥30.2bn, with liabilities of ¥35.8bn (D/E 1.18x), a moderate leverage profile for a distributor. Liquidity is tight: current ratio 92% and quick ratio 44.8%, with negative working capital of ¥-2.65bn, implying reliance on supplier credit or short-term funding to bridge inventory and receivables. Inventories are ¥15.56bn, representing roughly 51% of current assets, highlighting execution risk around demand planning and cash conversion. Operating, investing, and financing cash flows are unreported this period, limiting assessment of cash generation and free cash flow; zeros should be treated as undisclosed, not actual zero. Reported EBITDA and depreciation are undisclosed, constraining analysis of operating cash proxy and asset intensity. The computed effective tax rate shown as 0.0% is inconsistent with disclosed income tax of ¥610m; a rough estimate suggests a mid-teens rate versus ordinary income. Dividend data (DPS and payout) are not disclosed for the period, so dividend stance cannot be inferred. Overall, the company exhibits strong revenue momentum and operating leverage, but tighter liquidity and elevated inventories warrant monitoring. Data limitations, particularly cash flow non-disclosure, necessitate caution in interpreting cash conversion and dividend capacity.

Profitability Analysis

ROE_decomposition: ROE 10.63% = Net Profit Margin 4.64% × Asset Turnover 1.335 × Financial Leverage 1.72. Margin and turnover are the main contributors; leverage is moderate. margin_quality: Gross margin is 19.4%. Operating margin is approximately 4.8% (¥3,321m / ¥69,121m). The spread between gross and operating margins suggests meaningful SG&A absorption as scale improves. Net margin at 4.64% trails operating margin modestly due to interest and taxes but benefits from positive non-operating income (ordinary income > operating income). operating_leverage: Operating income grew +199.8% YoY on +52.8% revenue growth, indicating significant operating leverage from fixed-cost absorption and/or improved mix. Sustaining this requires continued volume growth and cost discipline; sensitivity to demand normalization is notable.

Growth Assessment

revenue_sustainability: Revenue reached ¥69.1bn, up 52.8% YoY. Such acceleration implies share gains, category expansion, or consolidation impacts. The durability will depend on retention in core dental channels, breadth of assortment, and maintenance of service levels amid rapid scale. profit_quality: Operating income of ¥3.32bn materially outpaced revenue growth, reflecting strong operating leverage. However, net income declined 39.9% YoY, indicating below-the-line factors (e.g., prior extraordinary gains or current non-recurring charges) that cloud underlying profit momentum. outlook: With asset turnover at 1.335x and margins improving at the operating level, the business appears positioned for continued growth if demand holds. Key swing factors include inventory normalization, supplier terms, and potential normalization of non-operating items affecting net income.

Financial Health

liquidity: Current ratio 92% and quick ratio 44.8% indicate tight short-term liquidity. Working capital is negative at ¥-2.65bn, suggesting reliance on payables to fund operations. Cash and equivalents are undisclosed this period. solvency: Total liabilities ¥35.77bn versus equity ¥30.19bn (D/E 1.18x) indicates moderate leverage. Interest expense is low at ¥38m with interest coverage of 87.4x, providing ample cushion against rate or earnings shocks. capital_structure: Assets ¥51.78bn funded 58% by liabilities and 42% by equity on a book basis (derived from disclosed totals). The reported equity ratio of 0.0% is not reflective of the balance sheet and should be treated as undisclosed.

Cash Flow Quality

earnings_quality: OCF is undisclosed; thus, OCF/Net income (reported as 0.00) should not be interpreted as weak cash conversion. Profit quality appears stronger at the operating level, but confirmation via cash flows is not possible. FCF_analysis: Free cash flow is undisclosed due to missing OCF and capex data (depreciation also undisclosed). Inventory of ¥15.56bn within current assets implies working capital intensity that can weigh on FCF if turns slow. working_capital: Negative working capital (¥-2.65bn) and a quick ratio of 44.8% highlight dependency on payables and the need for efficient inventory management. Any lengthening of receivables or inventory days could pressure liquidity.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are not disclosed for the period; therefore, payout sustainability cannot be determined from the provided data. Net income of ¥3.21bn provides capacity in principle, but cash coverage is unassessable without OCF. FCF_coverage: FCF coverage is undisclosed given missing cash flow data; reported 0.00x should be treated as not provided. policy_outlook: No guidance or policy disclosure included here. With operating recovery and moderate leverage, dividend potential exists, but confirmation requires visibility on OCF, capex, and working capital trends.

Risk Assessment

Business Risks:

• Demand normalization risk after rapid growth (+52.8% YoY revenue).
• Inventory management risk given ¥15.56bn inventories and tight quick ratio.
• Supplier concentration and terms risk impacting negative working capital model.
• Margin pressure from competitive pricing in medical/dental distribution.
• Execution risk in scaling logistics and fulfillment to sustain service levels.

Financial Risks:

• Tight liquidity (current ratio 92%, quick ratio 44.8%).
• Reliance on short-term liabilities (current liabilities ¥32.99bn) to fund operations.
• Potential cash flow volatility due to working capital swings; OCF undisclosed.
• Exposure to interest rate changes, albeit mitigated by strong coverage (87.4x).
• Earnings sensitivity to non-operating/extraordinary items impacting net income.

Key Concerns:

• OCF, capex, and FCF are not disclosed; cash generation cannot be verified.
• Net income decline (-39.9% YoY) despite strong operating gains suggests below-the-line noise.
• Negative working capital and low quick ratio increase refinancing and liquidity management risk.

Investment Implications

Key Takeaways:

• Strong operating recovery: operating income +199.8% on +52.8% revenue growth.
• Solid ROE of 10.63% supported by healthy asset turnover (1.335x) and moderate leverage (1.72x).
• Liquidity tight with current ratio 92% and quick ratio 44.8%; working capital negative.
• Ordinary income exceeds operating income, implying supportive non-operating items despite interest expense.
• Cash flow data not disclosed; FCF and dividend capacity cannot be assessed from this release.

Metrics to Watch:

• Operating cash flow and free cash flow once disclosed.
• Inventory days and overall cash conversion cycle.
• SG&A ratio and operating margin sustainability as scale grows.
• Non-operating income/expenses and extraordinary items affecting net income.
• Leverage and short-term borrowings profile within current liabilities.

Relative Positioning: Within Japan’s medical/dental distribution space, the company currently demonstrates above-peer growth momentum and solid ROE, but operates with tighter liquidity and higher working capital sensitivity than asset-light peers with stronger quick ratios.

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