Superbag (3945) FY2026 Q3 Earnings Report

Quick View

Executive Summary

Although revenue increased slightly, Operating Income, Ordinary Income, and Net Income all declined by double digits due to increases in costs and SG&A expenses, resulting in higher revenue but lower earnings. Revenue was ¥21.79B (+2.2% YoY), Operating Income was ¥0.68B (-16.6%), Ordinary Income was ¥0.73B (-16.3%), and Net Income attributable to owners of the parent was ¥0.53B (-21.6%). The primary factors behind the decline in Operating Income were the higher cost of sales ratio and increased SG&A expenses. Although the Company recorded extraordinary income from gains on the sale of investment securities of ¥0.06B, this was insufficient to offset the decline in margins.

Factors Affecting Performance

【Revenue】Revenue was ¥21.79B, representing a 2.2% YoY increase. By segment, the Paper Products Business was the core business at ¥11.80B (54.2% of total), while the Converted Products Business generated ¥4.41B (20.2% of total). Within Paper Products, paper containers (+13.8%) drove growth, while the Converted Products Business remained sluggish due to flat sales of plastic bags and declining sales of other converted products. The Other Business, consisting of businesses other than paper products and converted products, expanded to ¥5.58B and was the primary driver of the revenue increase.

【Profit and Loss】Operating Income was ¥0.68B, a 16.6% YoY decline. Cost of sales of ¥17.53B increased at a faster pace than revenue, causing the gross margin to decline to 19.6% from approximately 20.0% in the previous year. SG&A expenses also increased to ¥3.59B from ¥3.45B, resulting in an SG&A ratio of 16.5%. Segment profit was ¥0.90B for the Paper Products Business (¥1.03B in the previous year) and ¥0.15B for the Converted Products Business (¥0.12B in the previous year). The decline in the Paper Products Business’s profit margin, to 7.6%, reduced consolidated profit. Ordinary Income was ¥0.73B (-16.3%), and Net Income was ¥0.53B (-21.6%). Non-operating and extraordinary items largely offset one another, while the difference between Profit Before Tax and Net Income was attributable to the corporate tax burden (an effective tax rate of approximately 30%). In conclusion, the Company recorded higher revenue but lower earnings.

Segment Analysis

The reported segments consist of the Paper Products Business and the Converted Products Business. The Paper Products Business recorded revenue of ¥11.80B (54.2% of total, +0.4% YoY) and Operating Income of ¥0.90B (7.6% margin, -12.6% from ¥1.03B in the previous year), resulting in lower earnings despite higher revenue. The Converted Products Business recorded revenue of ¥4.41B (20.2% of total, -0.4% YoY) and Operating Income of ¥0.15B (3.4% margin, +29.1% from ¥0.12B in the previous year), resulting in higher earnings despite lower revenue. The “Other Business,” primarily product sales, recorded the strongest growth at ¥5.58B (25.6% of total, +8.7% YoY), supporting the increase in consolidated revenue. The corporate expense adjustment was -¥0.55B, widening from -¥0.51B in the previous year and also weighing on consolidated Operating Income.

Key Financial Indicators

【Profitability】The Operating Income margin was 3.1%, down from approximately 3.8% in the previous year, while the Net Income margin also declined to 2.4% from approximately 3.2%, indicating that rising costs are placing pressure on profitability. 【Cash Flow Quality】Accounts receivable increased to ¥5.35B from ¥3.74B in the previous year, a +43.0% increase, substantially outpacing revenue growth of +2.2% and suggesting a lengthening collection cycle. Inventories were ¥2.46B, equivalent to 15.1% of total assets, representing a somewhat elevated level. 【Investment Efficiency】Annualized ROE was 13.7%. Total asset turnover was approximately 1.34x, while financial leverage was approximately 3.1x, based on total assets of ¥16.27B and equity of ¥5.17B, indicating that leverage is driving ROE higher. 【Financial Soundness】The Equity Ratio was 31.8%, largely unchanged from 32.3% in the previous year. Interest-bearing debt totaled ¥2.68B, consisting of short-term debt of ¥1.06B and long-term debt of ¥1.62B. With EBIT of ¥0.68B against interest expense of ¥0.05B, the interest burden remains limited.

Cash Flow Analysis

As disclosure of items in the cash flow statement is limited, cash movements are analyzed based on changes in the balance sheet. Cash and deposits declined to ¥2.31B from ¥2.83B in the previous year. The substantial increase in accounts receivable (+¥1.61B) placed pressure on working capital and may have led to a decline in cash on hand. Meanwhile, accounts payable also increased by ¥0.85B, suggesting that changes in payment terms on the purchasing side provided some support to cash flow. Property, plant and equipment increased by ¥0.20B YoY, while intangible assets increased by ¥0.08B, indicating continued investment in facilities and software. Both short-term and long-term borrowings declined, suggesting that repayment may have been prioritized in financing activities. Overall, the impact of the immobilization of working capital due to the increase in accounts receivable on cash management requires close monitoring going forward.

Quality of Earnings

The impact of non-operating and extraordinary gains and losses on recurring business earnings was limited. Of ¥0.11B in non-operating income, dividends received of ¥0.04B accounted for the majority. Non-operating expenses of ¥0.05B consisted almost entirely of interest expense of ¥0.05B, leaving Ordinary Income at a level reflecting Operating Income after these adjustments. Extraordinary income of ¥0.06B consisted of gains on the sale of investment securities and temporarily increased Net Income as a non-recurring factor. Extraordinary losses of ¥0.03B, including losses on disposal of fixed assets, remained small. Comprehensive Income was ¥0.59B, approximately ¥0.06B above Net Income of ¥0.53B, primarily due to valuation differences on other securities of ¥0.04B. The difference between Net Income and Comprehensive Income was small and did not materially distort earnings quality. Overall, Net Income for the current period includes a temporary gain on the sale of investment securities, suggesting that the underlying earnings level from core operations is somewhat lower than the headline figure.

Earnings Forecast and Guidance

The full-year forecast calls for Revenue of ¥28.20B (+2.3% YoY), Operating Income of ¥0.78B (-13.5%), and Ordinary Income of ¥0.84B (-17.8%). Cumulative Q3 revenue of ¥21.79B represents 77.3% progress against the full-year forecast, while Operating Income of ¥0.68B represents 86.5% progress. Revenue is broadly on plan, while Operating Income is progressing ahead of plan. However, the full-year forecast itself incorporates lower earnings YoY, and the outlook does not anticipate an improvement in profitability.

Shareholder Returns

The dividend is forecast at ¥110 for the full year, compared with the previous fiscal year-end actual dividend of ¥105, indicating a policy of increasing the dividend. Based on forecast EPS of ¥410.93, the Payout Ratio is approximately 26.8%. Based on current-period actual Net Income of ¥0.53B, the Payout Ratio is approximately 33.4% (total dividends of approximately ¥0.177B / Net Income of ¥0.53B). The Company has cash and deposits of ¥2.31B, and based on the levels of Operating Income and Ordinary Income, there is no indication that dividend payments would be constrained. However, the potential impact of the increased working capital burden resulting from higher accounts receivable on future financial capacity should be monitored.

Risk Factors

1. Accounts Receivable Collection Risk: Accounts receivable and notes receivable were ¥5.35B, a +43.0% increase from ¥3.74B in the previous year, expanding substantially faster than revenue growth of +2.2%. The impact of a lengthening collection cycle on working capital and cash flow requires close monitoring.

2. Profitability Decline Risk: The Operating Income margin was 3.1%, down from the previous year and below the industry median of 8.6%. If costs continue to increase under a structure characterized by a gross margin of 19.6% and an SG&A ratio of 16.5%, the scope for improving the earnings structure may be limited.

3. Financial Leverage Risk: The Equity Ratio was 31.8%, while the debt-to-total-assets ratio was approximately 68%, a relatively high level. Although the interest burden is limited relative to interest-bearing debt of ¥2.68B, the high level of leverage could constrain financial flexibility during periods of downside earnings risk.

Industry Benchmark (For Reference; Compiled by the Company)

Industry Benchmark (manufacturing)

Profitability and Returns

The Company’s profitability is substantially below the industry median and also below the lower bound of the IQR.

Growth and Capital Efficiency

The revenue growth rate is slightly below the industry median but falls within the IQR and is not extremely inferior.

※Source: Compiled by the Company

Key Points from the Results

1. While revenue continued to increase, Operating Income, Ordinary Income, and Net Income all declined by double digits due to increases in costs and SG&A expenses. The trend in profit margins should be closely monitored as an indication of a potential inflection point in the earnings structure.

2. Accounts receivable increased by +43.0% YoY, substantially outpacing revenue growth, and the earnings data indicates that the immobilization of working capital may affect future cash flow.

3. The full-year forecast incorporates higher revenue but lower earnings. Although the dividend policy indicates an increase from ¥105 at fiscal year-end to ¥110 for the full year, the Payout Ratio based on Net Income is approximately 33.4%.

Theoretical Share Price (Reference Value)

Sensitivity: ¥3,599–¥3,809 at ±1% for the cost of equity, and ¥3,697–¥3,710 at ±0.1 for ω.

Notes:

• Because progress toward full-year forecast Net Income (87%) exceeds the standard level (75%), forecast EPS has been adjusted upward within a maximum range of +10% (because companies progressing ahead of plan tend to outperform their forecasts; the adjustment may be excessive for businesses with strong seasonality).
• Net assets as of the end of the quarter are used (there is a time-period mismatch with the full-year forecast).
• Because net assets include non-controlling interests, the theoretical value may be calculated somewhat higher.

(Calculation model: Residual Income Model (Ohlson-type, explicit 5-year fade) / Interest rate reference month: 2026-07 / Mechanically calculated value based solely on publicly disclosed data; this is not a forecast of the market share price or a recommendation of any specific investment action, and does not predict or guarantee future share prices.)

---

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 security. The industry benchmark is reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, after consulting with professionals as necessary.

---End of Report---