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 Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥28.6B | ¥29.3B | -2.2% |
| Operating Income | ¥11.2B | ¥10.7B | +4.0% |
| Ordinary Income | ¥11.5B | ¥10.8B | +6.0% |
| Net Income | ¥7.9B | ¥7.5B | +5.9% |
| ROE | 11.3% | 11.4% | - |
The interim period resulted in lower revenue but higher earnings, with Operating Income, Ordinary Income, and Net Income all increasing despite a slight decline in revenue, primarily due to an improvement in the gross profit margin. Revenue was ¥28.6B (¥29.3B in the previous year, YoY -2.2%), Operating Income was ¥11.2B (same period, +4.0%), Ordinary Income was ¥11.5B (same period, +6.0%), and Net Income was ¥7.9B (same period, +5.9%). The primary factors behind the earnings growth were the expansion of the Information Platform Business, which accounts for more than 70% of the sales mix, and portfolio effects from the downsizing of low-profitability non-core businesses. These factors improved the company-wide gross profit margin to 68.9% (64.3% in the previous year). Although the SG&A ratio increased to 29.9% (same period, 27.7%), the improvement in the gross profit margin absorbed this increase, resulting in an improvement in the Operating Income margin to 38.9% (same period, 36.6%).
【Revenue】Revenue was ¥28.6B, representing a 2.2% year-on-year decline. From the interim period under review, the segment classification was revised, with the Vehicle Disassembly and Measurement, Vehicle and Parts Procurement Agency, and Disassembly Research Data Sales businesses being consolidated and reorganized as the “Reverse Engineering Business.” The core Information Platform Business expanded, with revenue of ¥20.4B (+8.4%), accounting for approximately 71% of company-wide revenue and driving earnings. Meanwhile, non-core businesses contracted across the board: the Reverse Engineering Business generated ¥3.1B (-37.7%), the Consulting Business generated ¥1.8B (-23.5%), and the Automotive Fund Business generated ¥0.1B (-53.3%), offsetting the growth of the Platform Business. The Promotion Advertising Business (¥0.8B, +13.5%) and Recruitment Business (¥0.7B, +34.8%) secured revenue growth despite their small scale.
【Profit and Loss】Operating Income was ¥11.2B (+4.0%), Ordinary Income was ¥11.5B (+6.0%), and Net Income was ¥7.9B (+5.9%), with all three increasing year on year. The gross profit margin improved by +4.6pt from 64.3% in the previous year to 68.9%, absorbing the increase in the SG&A ratio to 29.9% (same period, 27.7%, +2.2pt). The improvement in the gross profit margin is believed to have been primarily driven by mix effects resulting from the shift in revenue and profit toward the Information Platform Business and the downsizing of low-profitability businesses. Ordinary Income exceeded Operating Income because non-operating income of ¥0.4B, primarily consisting of interest income of ¥0.3B, exceeded non-operating expenses of ¥0.1B. No extraordinary gains or losses were recorded. Accordingly, the interim period was characterized by lower revenue but higher earnings.
By segment, the Information Platform Business generated Operating Income of ¥10.0B (+10.0%, profit margin 48.8%), accounting for approximately 89% of total company-wide Operating Income of ¥11.2B and serving as the earnings pillar.
Although dependence on the Information Platform Business for Operating Income is high, declining profitability in non-core businesses, particularly the Reverse Engineering Business, is notable, and the profitability gap between segments is widening.
【Profitability】The Operating Income margin was 38.9%, improving by +2.3pt from 36.6% in the previous year, while the Net Income margin was 27.8%, improving by +2.2pt from 25.6% in the previous year. ROE was 11.3%. Although the improvement in the Net Income margin was the primary factor, total assets expanded to ¥96.5B (¥88.1B in the previous year, +9.5%), exceeding the Net Income growth rate of +5.9%; therefore, asset efficiency has declined slightly.【Cash Quality】Cash and deposits increased to ¥45.4B (¥38.0B in the previous year). Advances received were ¥19.1B (+25.6%), substantially exceeding accounts receivable of ¥2.6B, indicating that a revenue structure based on advance collection of payments has become established. Inventories were minimal at ¥0.3B, so cash tied up in inventory is limited.【Investment Efficiency】Investment securities were ¥31.4B (¥28.1B in the previous year), accounting for 32.5% of total assets. Comprehensive Income of ¥11.5B, including ¥3.2B in the share of Other Comprehensive Income of equity-method affiliates, exceeded Net Income of ¥7.9B by ¥3.6B.【Financial Soundness】The Equity Ratio was 73.2%, the Current Ratio was 191.9%, and the Quick Ratio was 190.8%, all at high levels. Fixed liabilities were only ¥0.1B, indicating virtually no dependence on interest-bearing debt.
Although no figures from the cash flow statement have been disclosed, changes in the balance sheet indicate strong cash-generating capability. Cash and deposits increased by ¥7.4B to ¥45.4B from ¥38.0B at the end of the same period of the previous year. While accounts receivable were relatively small at ¥2.6B, advances received increased to ¥19.1B (+25.6%), and the increase in payments collected ahead of service provision is believed to have been the primary factor behind the accumulation of cash. Inventories of ¥0.3B and accounts payable of ¥0.6B were both small, limiting the impact of working capital fluctuations on liquidity. Investment securities increased to ¥31.4B, indicating that a portion of surplus funds has been allocated to securities investments.
Profit for the interim period resulted from recurring business activities, with no extraordinary gains or losses recorded, and the quality of earnings can therefore be assessed as high. Non-operating income of ¥0.4B primarily consisted of interest income of ¥0.3B, while foreign exchange gains and dividend income were minimal. After deducting non-operating expenses of ¥0.1B, Ordinary Income exceeded Operating Income by ¥0.3B. Meanwhile, Comprehensive Income of ¥11.5B exceeded Net Income of ¥7.9B by ¥3.6B, primarily due to the ¥3.2B share of Other Comprehensive Income of equity-method affiliates. As this item is strongly non-recurring and non-cash in nature and is highly volatile, profitability based on Net Income is considered to more accurately reflect underlying conditions. Inventory and accounts receivable remained low, with no excessive accumulation of accruals.
Progress against the full-year earnings forecast was 46.6% for Revenue (¥28.6B/¥61.5B), 47.5% for Operating Income (¥11.2B/¥23.5B), 48.2% for Ordinary Income (¥11.5B/¥23.8B), and 48.0% for Net Income attributable to owners of the parent (¥7.97B/¥16.6B). Although all were slightly below the simple 50% progress level, no revisions were made to the earnings forecast or dividend forecast during the quarter, suggesting that the company expects to achieve its full-year plan. If growth in the Information Platform Business continues in the second half, progress toward achieving the plan is expected.
There was no dividend for the interim period (also no dividend in the same period of the previous year), while the full-year dividend is forecast at ¥58.00 per share. Based on forecast full-year EPS of ¥130.23, the Payout Ratio is approximately 44.5% (¥58/¥130.23), suggesting a policy of concentrating shareholder returns at the fiscal year-end. Given the financial position, including cash and deposits of ¥45.4B and an Equity Ratio of 73.2%, there are no concerns regarding the funding source for the planned dividend. No disclosure regarding share repurchases has been made.
Segment concentration risk: The Information Platform Business accounts for approximately 89% (¥10.0B) of total company-wide Operating Income of ¥11.2B, indicating a high degree of dependence on a single business. If growth in this business slows or the competitive environment changes, the impact on company-wide earnings is likely to be significant.
Deterioration in profitability of non-core businesses: The Reverse Engineering Business became loss-making, with revenue of ¥3.1B (-37.7%) and an Operating Loss of ¥0.2B. The Automotive Fund Business (-53.3%) and Consulting Business (-23.5%) also experienced revenue declines, indicating a decline in profitability across the non-core business portfolio.
Valuation fluctuation risk related to investment securities and equity-method investments: Investment securities amounted to ¥31.4B, accounting for 32.5% of total assets, while the share of Other Comprehensive Income of equity-method affiliates amounted to ¥3.2B for the period. Changes in market conditions could have a significant impact on valuation differences, net assets, and Comprehensive Income.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Income margin | 38.9% | 17.3% (4.1%–24.5%) | +21.7pt |
| Net Income margin | 27.8% | 13.0% (2.0%–16.2%) | +14.8pt |
Profitability is substantially above the industry median, placing the company among the top performers in the IT and telecommunications industry.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue growth rate (year on year) | -2.2% | 22.5% (16.2%–26.8%) | -24.7pt |
The Revenue growth rate is below the industry median, which is believed to reflect the downsizing of non-core businesses accompanying the segment reorganization.
※Source: Compiled by the Company
The gross profit margin improved to 68.9% (64.3% in the previous year), absorbing the increase in the SG&A ratio (+2.2pt) and contributing to an improvement in the Operating Income margin to 38.9%. The shift in revenue and profit toward the Information Platform Business provides the structural backdrop for the improvement in profitability, and whether this change in mix continues will determine future profitability trends.
Advances received increased to ¥19.1B (+25.6%), indicating an increase in payments collected ahead of service provision. Compared with accounts receivable of ¥2.6B, this also demonstrates the favorable quality of cash generation.
Dependence on the Information Platform Business for Operating Income reached approximately 89%, while profitability deteriorated in non-core businesses, particularly the Reverse Engineering Business. The imbalance in the business portfolio is an important monitoring point when assessing the quality of the earnings results.
This is a mechanically calculated reference range based solely on publicly disclosed data using a residual income model (Ohlson model, 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 | ¥775 |
| base | ¥807 |
| bull | ¥847 |
| Calculation Assumption | Value |
|---|---|
| Book value per share (BPS) | ¥554 |
| Adjusted forecast EPS | ¥136.6 |
| Cost of equity r | 9.77% (10-year government bond 2.77% + equity risk premium 6.00% + size premium 1.00%) |
| Persistence coefficient for residual income ω / explicit forecast | 0.62 / 5 years |
| Assumed Payout Ratio | 44.5% |
| Forecast EPS confidence adjustment | ×1.049 (based on the track record of guidance achievement in the same industry) |
| implied PBR / PER |
Sensitivity: ¥785–¥831 for ±1% in the cost of equity, and ¥801–¥817 for ±0.1 in ω.
Notes:
(Calculation model: Residual Income Model / Interest rate reference month: 2026-07 / This value does not forecast or guarantee the future share price)
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not recommend investment in any specific issue. The industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, after consulting with a professional as necessary.
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| 1.46x / 5.9x |