OHISHI SANGYO CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥11.54B
• Operating Income: ¥403M
• Net Income: ¥445M
• EPS: ¥37.36

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, Oishi Sangyo (3943) delivered modest topline growth and steady operating performance, while bottom-line softness reflects items below the operating line and a heavier tax burden. Revenue rose 0.9% year over year to ¥11,538 million, indicating stable demand in its packaging-related businesses. Gross profit was ¥2,069 million, translating to a gross margin of 17.9%, consistent with a cost structure that remains manageable despite input price volatility common in paper and packaging. Operating income increased 4.4% YoY to ¥403 million, lifting the operating margin to roughly 3.5%, signaling incremental operating leverage and cost discipline. Ordinary income of ¥515 million exceeded operating income, implying net positive non-operating contributions in the half. However, net income declined 34.2% YoY to ¥292 million, pulling the net margin to 2.53%; based on the provided line items, this appears driven by a higher effective tax burden and potential extraordinary losses between ordinary income and pre-tax income. The DuPont profile shows a calculated ROE of 1.55% (net margin 2.53%, asset turnover 0.433x, financial leverage 1.41x), highlighting that ROE is constrained primarily by modest margins and low asset turnover. The balance sheet is conservative: total assets of ¥26,655 million against equity of ¥18,865 million implies an equity ratio around 70.8% (even though the reported metric field is 0.0%, which indicates non-disclosure rather than zero). Liquidity is strong, with a current ratio of 246% and working capital of ¥9,196 million, underscoring ample near-term financial flexibility. Leverage appears low, with a debt-to-equity ratio of 0.42x (using total liabilities as a proxy for debt), and interest coverage is robust at 44.8x on the back of modest interest expense. Cash flow statement items and depreciation are not disclosed in this dataset (displayed as zeros), so free cash flow and EBITDA cannot be evaluated from the provided figures. Dividend per share is reported as zero for the period, so payout and FCF coverage cannot be assessed, though the strong balance sheet affords optionality. The company’s profitability profile is consistent with a mature, price-competitive packaging market; sustaining margin improvement will likely depend on pricing power, product mix, and continued cost control. Inventory of ¥1,210 million appears manageable relative to sales, which should support working capital stability if turns remain steady. Overall, Oishi Sangyo demonstrates solid operational resilience and balance sheet strength, but ROE and net profit softness constrain capital efficiency. Data limitations (notably cash flow and depreciation) restrict a full assessment of earnings quality and reinvestment needs, so upcoming disclosures will be important to confirm the quality and sustainability of earnings.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 2.53%
• asset_turnover: 0.433
• financial_leverage: 1.41
• calculated_ROE: 1.55%
• commentary: ROE is primarily constrained by modest net margins and low asset turnover; leverage is conservative and not a driver of ROE. margin_quality:
• gross_margin: 17.9%
• operating_margin: 3.5%
• ordinary_income_margin: 4.5%
• net_margin: 2.53%
• drivers: Stable gross spread with modest operating leverage; non-operating items net positive, but below-ordinary items (taxes/extraordinary) compressed net margin. operating_leverage: Operating income grew faster than revenue (+4.4% vs +0.9%), indicating some operating leverage from cost control/mix; sustainability depends on pricing, material costs, and utilization.

Growth Assessment

revenue_sustainability: Revenue up 0.9% YoY suggests stable demand; given the sector, growth likely tracks end-market activity and pricing for paper/packaging inputs. profit_quality: Operating profit grew 4.4% YoY with intact gross margin, pointing to decent underlying operations; net profit decline reflects tax and potential extraordinary impacts rather than core weakness. outlook: Absent explicit guidance, expect modest growth consistent with market conditions; margin trajectory hinges on passing through input costs, product mix upgrades, and productivity gains.

Financial Health

liquidity:

• current_assets: 15506000000
• current_liabilities: 6310000000
• current_ratio: 245.7%
• quick_ratio: 226.6%
• working_capital: 9196000000
• commentary: Very strong liquidity with substantial buffer for seasonal swings in receivables and inventories. solvency:
• total_assets: 26655000000
• total_liabilities: 7968000000
• total_equity: 18865000000
• equity_ratio_implied: ≈70.8%
• debt_to_equity: 0.42x (using total liabilities as proxy)
• interest_coverage: 44.8x
• commentary: Low leverage and high equity cushion; interest burden is minimal relative to operating earnings. capital_structure: Balance sheet skewed toward equity financing; ample capacity for capex or strategic investments without stressing leverage.

Cash Flow Quality

earnings_quality: Cash flow data are not disclosed in this dataset; unable to reconcile earnings to cash. Accruals cannot be assessed without OCF and depreciation. FCF_analysis: OCF and investing cash flows are undisclosed, so FCF cannot be derived. Capex intensity is unknown absent depreciation/capex data. working_capital: Inventories at ¥1,210 million appear modest vs sales; working capital of ¥9,196 million supports operations. Monitor receivables and inventory turns to confirm cash conversion.

Dividend Sustainability

payout_ratio_assessment: Annual DPS is reported as zero for the period; payout ratio shown as 0% reflects non-payment or timing. Without OCF/FCF, coverage cannot be assessed. FCF_coverage: Not assessable due to undisclosed cash flows; balance sheet strength suggests optionality but does not substitute for FCF data. policy_outlook: No explicit policy provided. Given conservative leverage, the company has flexibility, but sustained distributions would require demonstrable, recurring FCF.

Risk Assessment

Business Risks:

• Input cost volatility for paper and resin impacting gross margin
• Price competition and customer bargaining power in packaging markets
• Demand cyclicality tied to consumer goods and industrial end-markets
• Potential ESG-driven shifts in materials and recyclability requirements
• Supply chain disruptions affecting lead times and inventory management

Financial Risks:

• ROE constrained by low asset turnover and thin operating margins
• Uncertainty around tax rate and extraordinary items impacting net income volatility
• Limited visibility on cash generation and capex due to undisclosed cash flow data
• Potential working capital swings affecting cash conversion despite strong liquidity

Key Concerns:

• Net income down 34.2% YoY despite stable operations, implying below-ordinary line pressures
• Lack of OCF and capex disclosure limits assessment of earnings quality and sustainability
• Low ROE (1.55%) relative to equity base may weigh on capital efficiency

Investment Implications

Key Takeaways:

• Stable revenue (+0.9% YoY) with improving operating income (+4.4% YoY)
• Net margin compressed to 2.53% amid higher tax/extraordinary impacts
• Strong balance sheet with implied equity ratio around 70.8% and current ratio ~246%
• Interest burden is minimal; interest coverage 44.8x
• ROE at 1.55% reflects modest margins and low asset turnover rather than leverage
• Cash flow and depreciation not disclosed, limiting visibility on FCF and reinvestment needs

Metrics to Watch:

• Pricing and gross margin progression versus input costs
• Operating margin trajectory and cost efficiency
• Cash from operations, capex, and FCF once disclosed
• Effective tax rate and any extraordinary gains/losses
• Inventory and receivable turns (cash conversion cycle)
• Asset turnover improvement via utilization and mix

Relative Positioning: Within the Japanese paper/packaging cohort, Oishi Sangyo appears conservatively financed with strong liquidity but delivers lower capital efficiency (ROE) due to modest margins and slow asset turnover; operational stability is a positive, but sustained value creation hinges on improving cash generation and margin mix.

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