Fabrica Holdings Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥5.00B
• Operating Income: ¥598M
• Net Income: ¥372M
• EPS: ¥69.25

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

Fabrica Holdings (41930) reported FY2026 Q2 consolidated results under JGAAP with solid top-line growth but softer earnings conversion. Revenue reached ¥5,004 million, up 12.8% YoY, indicating healthy demand across its businesses. Operating income rose 5.7% YoY to ¥598 million, implying some margin compression as operating income growth lagged revenue growth. Ordinary income was ¥602 million, slightly above operating income, suggesting modest net non-operating gains. Net income declined 6.4% YoY to ¥372 million despite higher sales, pointing to pressure below the operating line or higher non-operating costs/taxes/minority interest not disclosed here. The reported EPS was ¥69.25, consistent with the net income trend. DuPont metrics show a net profit margin of 7.43%, asset turnover of 0.902x, and financial leverage of 1.43x, yielding an ROE of 9.61%, which is adequate for a mid-cap services/IT-solution style business. The operating margin calculated from disclosed figures is approximately 11.95% (¥598m/¥5,004m), and the ordinary margin is approximately 12.03%. With total assets of ¥5,547 million and reported total equity of ¥3,870 million, the implied assets-to-equity leverage of 1.43x aligns with the DuPont leverage factor. Using the balance sheet identity, implied total liabilities would be ~¥1,677 million (assets minus equity), although detailed liability composition is not disclosed. Liquidity and cash flow data are largely unreported in XBRL for this period, limiting conclusions on working capital dynamics and free cash flow. Dividend data show DPS of ¥0 and a payout ratio of 0%, which may reflect timing (no interim dividend) rather than a definitive policy shift. Overall, the company delivered healthy revenue growth with stable, mid-teens operating profitability but experienced compression at the net level, resulting in a mid-to-high single-digit ROE. The quality of earnings cannot be fully assessed due to missing cash flow data, but the consistency between leverage implied by the balance sheet and DuPont suggests internal coherence of the reported figures. Key watch points include margin trajectory in 2H, cost normalization, and confirmation of cash conversion once OCF data are available. Data limitations are material, as many line items (COGS, gross profit, depreciation, interest, taxes, cash flows, current items) are not disclosed here and appear as zeros.

Profitability Analysis

ROE_decomposition: ROE 9.61% = Net margin 7.43% × Asset turnover 0.902 × Financial leverage 1.43. This implies earnings are driven more by reasonable margins and moderate asset efficiency than by leverage. margin_quality: Operating margin ~11.95% (¥598m/¥5,004m) versus net margin 7.43% indicates typical non-operating/tax drag. Ordinary income slightly exceeds operating income (¥602m vs ¥598m), implying small non-operating gains. YoY, revenue growth outpaced operating income growth (+12.8% vs +5.7%), indicating some cost inflation or mix shift that compressed operating margin. operating_leverage: Positive but modest operating leverage: revenue grew +12.8% while operating income grew +5.7%. This suggests incremental margins were below the existing operating margin in 1H, possibly due to higher personnel/SG&A or investment in growth. Depreciation is unreported, so EBITDA analysis is limited.

Growth Assessment

revenue_sustainability: Revenue growth of +12.8% YoY suggests healthy demand and/or successful expansion initiatives. Absent segment disclosure, the breadth of growth is unclear, but the magnitude indicates resilience. profit_quality: Net income declined 6.4% YoY despite higher sales, indicating pressure below the operating line or increased costs. Ordinary income slightly above operating income suggests some non-operating support, but the decline at the bottom line warrants scrutiny of taxes, minority interests, and extraordinary items not disclosed here. outlook: If cost pressures are cyclical and investments start to yield operating leverage in 2H, full-year earnings could re-accelerate. Conversely, sustained cost inflation or continued below-OP headwinds could cap EPS growth. The current ROE of 9.61% provides a reasonable base, with upside contingent on margin recovery and better cash conversion.

Financial Health

liquidity: Current assets and current liabilities are unreported; thus, current and quick ratios cannot be assessed from this dataset. Cash and equivalents are also unreported. solvency: Total assets ¥5,547m and total equity ¥3,870m imply total liabilities of ~¥1,677m. Implied equity ratio by calculation is ~69.8% (3,870/5,547), though the reported equity ratio shows 0.0% due to non-disclosure. Financial leverage of 1.43x (assets/equity) is moderate. capital_structure: Debt-to-equity is unreported. Without a breakdown of interest-bearing debt versus other liabilities, leverage quality cannot be determined. Interest expense is not disclosed, limiting assessment of coverage.

Cash Flow Quality

earnings_quality: OCF is unreported; the OCF/Net Income ratio displayed as 0.00 should not be interpreted as true zero. Therefore, we cannot validate accruals intensity or cash conversion. FCF_analysis: Investing and financing cash flows are unreported; free cash flow cannot be calculated. Capex intensity and working capital investment remain unknown. working_capital: Current asset/liability details are missing, precluding analysis of inventory turns, receivable days, or payables leverage.

Dividend Sustainability

payout_ratio_assessment: Payout ratio is listed at 0.0% alongside DPS of ¥0.00, which likely reflects timing (no interim dividend) or non-disclosure rather than a definitive full-year stance. FCF_coverage: Not assessable due to unreported OCF and capex figures. Earnings-based coverage appears conservative given zero payout in 1H, but this is not a robust indicator without cash data. policy_outlook: With ROE at 9.61% and implied low leverage, the company has capacity to return capital if cash generation is steady; however, the absence of disclosed cash flows and dividend policy commentary limits visibility. Monitor full-year guidance and year-end DPS decisions.

Risk Assessment

Business Risks:

• Margin pressure from wage inflation and SG&A investments outpacing revenue growth
• Potential adverse mix shift reducing operating leverage
• Competitive intensity in core service lines impacting pricing
• Execution risk in growth initiatives needed to sustain double-digit revenue growth

Financial Risks:

• Limited visibility on liquidity due to unreported current assets/liabilities and cash balances
• Unknown interest-bearing debt composition; debt service capacity cannot be verified
• Cash flow volatility risk; OCF and capex unreported, hindering FCF assessment

Key Concerns:

• Net income decline (-6.4% YoY) despite strong sales growth
• Operating margin compression versus the prior year implied by slower operating income growth
• Data gaps across cash flow and working capital metrics impede earnings quality evaluation

Investment Implications

Key Takeaways:

• Top-line growth strong at +12.8% YoY; operating income lagged at +5.7%, signaling margin pressure
• ROE of 9.61% supported by 7.43% net margin and 0.902x asset turnover; leverage is moderate at 1.43x
• Ordinary income slightly above operating income indicates small non-operating gains
• Net income down 6.4% YoY; bottom-line pressure requires scrutiny of below-OP items
• Cash flow disclosure is insufficient; cannot confirm cash conversion or FCF
• Implied equity ratio ~69.8% suggests a solid balance sheet, subject to liability composition

Metrics to Watch:

• Operating margin and SG&A-to-sales ratio in 2H
• OCF and OCF/Net Income once disclosed
• Capex and investment cash flows for FCF visibility
• Ordinary vs operating income gap (non-operating gains/losses)
• Effective tax rate and minority interests when available
• Year-end DPS and payout guidance

Relative Positioning: The company appears to occupy a relatively conservative balance sheet position with moderate leverage and mid-to-high single-digit ROE. Its growth profile is solid on revenue but currently constrained by margin pressure, placing it in a middle tier versus peers that convert double-digit sales growth into proportionate earnings acceleration. Clarity on cash conversion and 2H margin dynamics will be decisive for relative standing.

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