Superbag Company,Limited FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥13.43B
• Operating Income: ¥296M
• Net Income: ¥270M
• EPS: ¥175.58

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment 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

Superbag Co., Ltd. (3945) reported FY2026 Q2 consolidated results under JGAAP showing modest topline growth but weaker operating leverage. Revenue rose 2.4% year over year to ¥13.43bn, while operating income declined 11.0% to ¥296m, indicating cost pressures and/or elevated SG&A that outpaced sales growth. Gross profit was ¥2.58bn with a gross margin of 19.2%, and operating margin compressed to approximately 2.2%, underscoring thin profitability in the current mix. Ordinary income of ¥339m exceeded operating income, suggesting positive net non-operating items that more than offset interest expense of ¥34m. Net income was ¥260m (-4.2% YoY), translating to a net margin of 1.94% and EPS of ¥175.58. DuPont decomposition indicates ROE of 5.31% driven by a low margin (1.94%), moderate asset turnover (0.897x), and material financial leverage (3.06x). Balance sheet strength is moderate: total assets are ¥14.97bn and total equity ¥4.90bn, implying an equity ratio around 32.7% (computed from disclosed balances) despite the reported equity ratio field showing 0.0% (unreported). Liquidity is adequate with a current ratio of 138.3% and quick ratio of 109.3%, supported by working capital of ¥2.82bn. Interest coverage is a comfortable 8.7x using EBIT, reflecting manageable debt servicing capacity given current earnings. Operating cash flow of ¥277m modestly exceeds net income, yielding an OCF/NI of 1.07, which points to acceptable earnings quality for the period. EBITDA was ¥424m (3.2% margin), highlighting limited operating buffer relative to sales and cost volatility. Free cash flow was shown as 0 due to unreported investing cash flows; actual capex and FCF cannot be inferred from the provided zeros. Dividends and payout metrics are also shown as zero, consistent with lack of disclosure at Q2 rather than confirmation of no payout. Overall, the company is navigating a low-margin environment with moderate leverage, stable liquidity, and adequate near-term cash generation, but negative operating leverage in Q2 and thin margins constrain profit growth. Key monitoring points include gross margin resilience, SG&A discipline, working capital efficiency, and any updates on capex and dividend policy as the fiscal year progresses.

Profitability Analysis

roe_decomposition: ROE 5.31% = Net margin 1.94% × Asset turnover 0.897× × Financial leverage 3.06×. The low net margin is the main drag; leverage provides a meaningful boost to equity returns while asset utilization is moderate. margin_quality: Gross margin at 19.2% supports contribution, but operating margin is only about 2.2% (¥296m/¥13,431m), indicating SG&A and other operating costs are absorbing most of gross profit. Ordinary income exceeds operating income due to positive non-operating items, but reliance on non-operating gains is not a durable earnings driver. operating_leverage: Revenue grew 2.4% YoY while operating income fell 11.0% YoY, implying negative operating leverage in the quarter. With EBITDA margin of 3.2%, small cost swings materially impact operating profit, highlighting sensitivity to input costs and pricing.

Growth Assessment

revenue_sustainability: Topline growth of +2.4% suggests stable demand in core packaging segments; however, growth is modest and likely volume- or mix-driven rather than price-led given margin pressure. profit_quality: Net income fell less than operating income (-4.2% vs -11.0%) aided by non-operating contributions. OCF/NI at 1.07 indicates cash conversion consistent with accrual profits this period, a positive but modest signal. outlook: With thin EBITDA margin (3.2%) and negative operating leverage, profit growth will depend on cost pass-through, procurement gains, and SG&A control. If input cost normalization continues and pricing holds, margin recovery is possible; conversely, persistent cost inflation or weaker volumes would pressure earnings.

Financial Health

liquidity: Current ratio 138.3% and quick ratio 109.3% indicate adequate short-term coverage. Working capital of ¥2,817m provides operational flexibility. solvency: Total liabilities/Equity is 2.02×. Using period-end balances, the equity ratio is approximately 32.7% (¥4,896m/¥14,972m), reflecting moderate leverage for the sector. Interest coverage is 8.7× (EBIT/interest), suggesting comfortable service capacity under current earnings. capital_structure: Leverage (assets/equity) at 3.06× aligns with the reported DuPont leverage. Interest-bearing debt detail is not disclosed; the D/E proxy here uses total liabilities.

Cash Flow Quality

earnings_quality: Operating CF of ¥277m versus net income of ¥260m (OCF/NI 1.07) indicates broadly aligned cash and accrual earnings for the half-year. fcf_analysis: Free cash flow is shown as 0 due to unreported investing cash flows and capex; therefore, true FCF cannot be assessed from the provided data. EBITDA of ¥424m offers some internal funding capacity, but capex intensity is unknown. working_capital: Inventories are ¥2,133m within current assets of ¥10,173m. Without comparative period data, changes in receivables/payables/inventory cannot be analyzed; however, the quick ratio above 1.0 suggests limited inventory drag on liquidity in this period.

Dividend Sustainability

payout_ratio_assessment: Payout ratio is shown as 0.0% due to unreported dividend data; no inference about actual payout should be made from this zero. Based on earnings alone (¥260m for H1), capacity for distribution exists, subject to full-year performance and policy. fcf_coverage: FCF coverage is reported as 0.00x because FCF is undisclosed; coverage cannot be evaluated without capex and investing cash flows. policy_outlook: No dividend policy update is provided in the data. Future payout will depend on margin recovery, leverage tolerance, and capex needs; stable OCF supports optionality if profitability normalizes.

Risk Assessment

Business Risks:

• Input cost volatility for paper, pulp, and energy impacting gross margins
• Pricing pressure from retail and consumer goods customers in packaging
• Volume sensitivity to consumer demand and store traffic
• Product mix shifts from plastic substitution to paper that may require reinvestment
• Competitive intensity among domestic packaging converters

Financial Risks:

• Thin operating margin (≈2.2%) leaving limited cushion against shocks
• Moderate leverage (Liabilities/Equity ≈2.02×) amplifying earnings volatility
• Potential interest rate increases affecting financing costs
• Working capital swings influencing OCF given inventory/receivables needs

Key Concerns:

• Negative operating leverage in Q2 despite revenue growth
• Dependence on non-operating income to lift ordinary profit above operating profit
• Limited visibility on capex and FCF due to unreported investing cash flows
• Dividend visibility absent at mid-year

Investment Implications

Key Takeaways:

• Topline growth of 2.4% YoY with operating income down 11.0% indicates cost pressure and/or SG&A drag
• ROE at 5.31% is leverage-assisted; core margins remain the primary constraint
• Liquidity is adequate (current ratio 138%, quick ratio 109%) with working capital of ¥2.82bn
• Interest coverage at 8.7x suggests manageable debt service under current earnings
• Cash conversion is acceptable (OCF/NI 1.07), but FCF is not assessable due to missing investing cash flow data

Metrics to Watch:

• Gross margin trajectory versus input cost trends
• SG&A as a percentage of sales and operating margin recovery
• Ordinary income components (non-operating gains/losses) and interest expense
• Working capital turns (inventory and receivables days) and OCF/NI
• Capex levels and disclosed FCF once investing cash flows are available
• Equity ratio and liabilities/equity to gauge solvency momentum
• Dividend announcements and payout guidance

Relative Positioning: Within Japanese packaging peers, the company exhibits modest growth, thin but positive operating margins, moderate leverage, and adequate liquidity; sustaining margins and improving cost pass-through will be key to closing the profitability gap with stronger-margin competitors.

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