| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue | ¥1295.8B | ¥1179.7B | +9.8% |
| Operating Income | ¥275.3B | ¥282.0B | -2.4% |
| Profit Before Tax | ¥334.3B | ¥307.7B | +8.6% |
| Net Income | ¥249.5B | ¥99.5B | +150.9% |
| ROE | 14.3% | 8.5% | - |
For the fiscal year ended March 2026 (Full Year), Revenue was ¥1,295.8B (YoY +¥116.0B +9.8%), Operating Income was ¥275.3B (YoY -¥6.7B -2.4%), Ordinary Income was ¥100.9B (YoY -¥169.5B -62.7%), and Net Income was ¥249.5B (YoY +¥150.0B +150.9%). The top line achieved near-double-digit growth supported by robust semiconductor demand, while Operating Income slightly declined due to rising cost of sales (cost of sales ratio 66.6%, from 65.1% +1.5pt) and higher SG&A (SG&A ratio 11.2%, from 10.9% +0.3pt). Operating margin decreased to 21.2% (from 23.9%, -2.7pt), but a substantial increase in financial income (¥71.5B, from ¥34.1B +¥37.4B) lifted Profit Before Tax to ¥334.3B (from ¥307.7B +8.6%). Corporate taxes normalized to ¥84.8B (effective tax rate 25.4%, prior year 67.7%), resulting in a 2.5x expansion in Net Income and a large improvement in net margin to 19.2% (from 8.4% +10.8pt). ROE reached a high level of 17.2% (from 7.8% +9.4pt). Total assets expanded to ¥2,307.2B (from ¥1,677.5B +37.5%), mainly due to additions to tangible fixed assets driven by capital expenditures of ¥332.1B. Equity Ratio strengthened to 75.6% (from 69.4% +6.2pt), and interest-bearing debt remained minimal at ¥18.6B (Debt/Equity ratio 1.1%).
[Revenue] Revenue was ¥1,295.8B (YoY +¥116.0B +9.8%), achieving steady growth. The company operates a single segment focused on photomask-related business; regional and product breakdowns are not disclosed. Qualitative information suggests expansion of advanced-node products and a resilient customer investment cycle drove the revenue increase. Advance capital expenditures (¥332.1B, 25.6% of Revenue) expanded supply capacity to meet rising demand. Contract liabilities (deferred revenue) were ¥26.3B, down ¥2.5B year-on-year, but order trends are generally favorable.
[Profitability] Gross profit was ¥432.7B (gross margin 33.4%, from 34.9% -1.5pt), with rising cost ratios pressuring gross margin. Cost of sales was ¥863.1B (from ¥768.5B +12.3%), increasing faster than revenue; principal drivers are higher depreciation from facility ramp-up (¥184.9B, from ¥152.4B +¥32.5B +21.3%) and rising raw material costs. SG&A was ¥145.0B (SG&A ratio 11.2%, from 10.9% +0.3pt), and R&D was ¥12.4B (1.0% of Revenue), reflecting continued investment. Operating Income was ¥275.3B (Operating margin 21.2%, from 23.9% -2.7pt). In non-operating results, financial income expanded materially to ¥71.5B (from ¥34.1B +¥37.4B), and after financial expenses of ¥18.0B and equity-method investment income of ¥5.5B, Ordinary Income was ¥100.9B (from ¥270.4B -62.7%). The large decline in Ordinary Income reflects the loss of other income in the prior year (¥24.6B previously vs ¥2.5B this year) and the larger impact of operating profit decline despite higher financial income. Profit Before Tax increased to ¥334.3B (from ¥307.7B +8.6%), and with tax expense of ¥84.8B (effective tax rate 25.4%), Net Income grew to ¥249.5B (from ¥99.5B +150.9%). Comprehensive income was ¥380.6B (from ¥56.3B +575.7%), aided by a favorable shift in foreign currency translation difference of ¥135.5B (from -¥38.0B). In summary, despite revenue growth and lower operating profit, higher financial income and tax normalization produced an overall increase in final profit.
[Profitability] Operating margin 21.2% (from 23.9% -2.7pt), Ordinary Income margin 7.8% (from 22.9% -15.1pt), Net margin 19.2% (from 8.4% +10.8pt), indicating operating margin deterioration was offset by financial income and tax normalization. ROE improved sharply to 17.2% (from 7.8% +9.4pt), reaching levels above historical performance. ROA on an Ordinary Income basis was 16.8% (from 17.2% -0.4pt), roughly steady. Gross margin was 33.4% (from 34.9% -1.5pt), reflecting higher cost ratios.
[Efficiency] Total asset turnover declined to 0.56x (from 0.70x) due to asset expansion from capital spending. Days Sales Outstanding (DSO) is about 92 days (Accounts receivable ¥326.1B ÷ Revenue ¥1,295.8B × 365 days), trending longer. Inventory days are about 20 days (Inventories ¥48.1B ÷ Cost of sales ¥863.1B × 365 days), which is favorable. Days Payable Outstanding (DPO) is about 81 days (Accounts payable ¥190.7B ÷ Cost of sales ¥863.1B × 365 days), yielding a Cash Conversion Cycle of about 32 days—efficient.
[Financial Soundness] Equity Ratio 75.6% (from 69.4% +6.2pt), Current Ratio 281.6% (Current assets ¥973.7B ÷ Current liabilities ¥345.8B), Debt/Equity ratio 1.1% (Interest-bearing debt ¥18.6B ÷ Net assets ¥1,745.1B), indicating a very conservative financial profile. Net cash is ¥497.0B (cash ¥515.5B - interest-bearing debt ¥18.6B), providing high financial flexibility. Interest coverage based on Operating Income is approximately 152.9x (Operating Income ¥275.3B ÷ Financial expenses ¥18.0B), showing no immediate concern.
Operating Cash Flow was ¥360.6B (from ¥262.3B +37.5%), equal to 1.45x Net Income (¥249.5B), indicating strong cash generation. Working capital changes included an increase in accounts receivable of -¥22.9B and an increase in inventories of -¥7.1B as cash outflows, while increases in accounts payable +¥9.6B and other working capital +¥24.3B provided offsetting support. Contract liabilities decreased by -¥20.4B as deferred revenue was consumed. Non-cash expenses included depreciation of ¥184.9B, boosting operating cash flow; corporate tax payments were ¥86.2B. Investing Cash Flow was -¥351.5B (from -¥328.9B), representing continued large capital deployment centered on capital expenditures. Acquisition of tangible fixed assets was -¥332.1B (from -¥306.9B), 25.6% of Revenue, likely aimed at expanding advanced-node production capacity. Time deposit placements and withdrawals of ¥91.3B each offset, and loan disbursements of -¥29.6B with collections of ¥11.4B resulted in net -¥18.2B outflow. Free Cash Flow was ¥9.1B (from -¥66.6B), turning positive but remaining tight due to large capex. Financing Cash Flow swung to an inflow of ¥198.6B (from -¥285.4B), mainly due to new share issuance of ¥199.9B (presumed to be a public offering related to the TSE Prime listing). Net increase in short-term borrowings +¥10.6B, long-term debt repayments -¥4.0B, lease liability repayments -¥24.1B, and derivative settlement receipts +¥16.2B were other components. Foreign exchange translation effect contributed +¥30.6B (yen depreciation effect), and cash increased from ¥277.2B at the beginning of the period to ¥515.5B at year-end, a rise of ¥238.4B. Operating Cash Flow/EBITDA ratio was about 0.78x (EBITDA ≒ Operating Income ¥275.3B + Depreciation ¥184.9B = ¥460.2B), indicating that investment and working capital outflows remain impactful, but liquidity was materially strengthened by the equity raise.
Of Net Income ¥249.5B, operating contribution was ¥275.3B (Operating margin 21.2%), indicating core business profitability is maintained. Financial income of ¥71.5B (from ¥34.1B +¥37.4B) materially boosted Ordinary Income; this is presumed to include interest and dividend income of ¥4.9B and other financial income including FX-related gains. The increase in financial income is largely attributable to external factors such as exchange rate movements and higher deposit interest, so its sustainability warrants attention. Equity-method investment income of ¥5.5B (from ¥5.1B) contributed stably. From Profit Before Tax ¥334.3B, tax expense of ¥84.8B (effective tax rate 25.4%) produced significantly higher Net Income compared with the prior year effective tax rate of 67.7%; this normalization materially lifted final profit. Comprehensive income of ¥380.6B exceeded Net Income by ¥131.1B, mainly due to foreign currency translation difference of ¥135.5B (improved by ¥173.5B from -¥38.0B), reflecting valuation increases of overseas operating entities amid yen depreciation. Operating Cash Flow ¥360.6B is 1.45x Net Income, providing solid cash backing; accrual ratio is (Net Income ¥249.5B - Operating CF ¥360.6B) ÷ Total assets ¥2,307.2B ≒ -4.8% (negative, indicating cash generation exceeds profit), which signals good earnings quality. Increases in accounts receivable and inventories due to working capital outflow appear to be within the scope of growth-related investment, and the conversion of recurring earnings to cash is functioning healthily.
Full-year guidance projects Revenue ¥1,401.0B, Operating Income ¥298.0B (YoY +8.2%), Net Income ¥237.0B (YoY -5.0%), EPS ¥248.06, and dividend ¥35. Versus actuals, Revenue ¥1,295.8B is 92.5% of guidance, Operating Income ¥275.3B is 92.4% of guidance, both short of plan, while Net Income ¥249.5B exceeded guidance ¥237.0B by +5.3%. The shortfall at the operating level is attributed to higher cost ratios and increased SG&A compressing margins relative to plan. Net income outperformance is attributed to higher-than-expected financial income (¥71.5B) and a more favorable tax normalization than assumed. Progress toward full-year guidance stands at Revenue 92.5%, Operating Income 92.4%, Net Income 105.3%—leaving some room to recover at the operating level, while the final profit target has already been achieved. Actual dividend of ¥56 (year-end only, no interim) exceeded the guided ¥35, and the payout ratio based on actuals is 21.4% (vs guided 14.1% calculated as forecast EPS ¥248.06 × dividend ¥35 ÷ forecast Net Income ¥237B), reflecting a shareholder-friendly stance.
Year-end dividend is ¥56 (no interim dividend, annual dividend ¥56), and payout ratio is 21.4% (total dividends ¥55.6B ÷ Net Income ¥249.5B, or ¥56 per share ÷ EPS ¥261.12), a reasonable level. Prior year payout ratio cannot be directly compared due to lack of dividend history in disclosed data, but the prior year included share repurchases of ¥180.0B (cash flow) and dividends paid ¥90.0B, implying a high total return ratio. This period, no share repurchases were conducted due to equity issuance of ¥199.9B which expanded shareholders’ equity, hence returns were limited to dividends. Free Cash Flow of ¥9.1B is tight and cannot fully cover dividend payments (note: statement in the statement of changes in equity suggests no dividends this period, but prior-year dividend ¥90.0B was presumed paid), however ample cash balance of ¥515.5B and Operating CF ¥360.6B mitigate concerns about dividend sustainability. The payout ratio of 21.4% allows flexibility to adjust with performance, and it is expected the company will look to expand shareholder returns while balancing capital expenditure cycles and earnings trends. Note: dividend payment of -¥90.0B in the cash flow statement relates to prior fiscal year payments; the year-end dividend of ¥56 (approx. total ¥55.6B) is expected to be reflected in next period’s cash flow.
Risk of prolonged accounts receivable collection and working capital pressure: Accounts receivable of ¥326.1B increased 17.9% from ¥276.7B year-on-year, with collection period about 92 days and a trend toward extension. Accounts receivable accumulation is outpacing Revenue growth (+9.8%), suggesting potential customer payment-term extension or collection delays. A DSO exceeding 90 days is well above manufacturing sector average (around 60 days), representing potential deterioration in working capital efficiency. Contract liabilities of ¥26.3B decreased ¥2.5B year-on-year, indicating reduced funding from deferred revenue. Continued large capital expenditures could further expand working capital and pressure FCF generation.
Risk related to recovery of capital expenditures and utilization rates: Tangible fixed assets increased to ¥1,090.7B (from ¥879.2B +24.0%), and capital expenditures of ¥332.1B are high relative to depreciation (depreciation ¥184.9B, capex 1.8×). While the expansion of advanced-node production capacity is being pursued aggressively, delays in ramping utilization or slower yield improvements could prevent expected revenue and profit expansion, prolonging payback periods. Part of the decrease in Operating margin to 21.2% from 23.9% is likely attributable to higher depreciation and startup costs from new equipment; future utilization gains and price-mix improvements are keys to recovery.
Risk of earnings volatility due to reliance on financial income: A major driver of Net Income ¥249.5B was financial income of ¥71.5B (from ¥34.1B +109.7%), much of which likely reflects FX-related gains and higher deposit interest—elements sensitive to exchange rates and interest rate environment and therefore potentially non-recurring. Core operating profitability (Operating Income ¥275.3B) is solid, but if financial income reverts to prior-year levels, Ordinary Income and Net Income could decline. Comprehensive income also benefited greatly from foreign currency translation difference of ¥135.5B, which could reverse into valuation losses under a yen appreciation scenario.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| ROE | 17.2% | 6.3% (3.2%–9.9%) | +10.9pt |
| Operating Margin | 21.2% | 7.8% (4.6%–12.3%) | +13.5pt |
| Net Margin | 19.3% | 5.2% (2.3%–8.2%) | +14.1pt |
Profitability metrics substantially exceed industry medians, reflecting the high value-added business model of the photomask business and strong asset utilization.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 9.8% | 3.7% (-0.4%–9.3%) | +6.1pt |
Revenue growth also outperformed the industry median by +6.1pt, driven by capture of advanced semiconductor demand and expanded supply capacity.
※ Source: Company compilation
Visibility of payback on large capital expenditures is a future focus: Tangible fixed assets increased to ¥1,090.7B (+¥211.9B +24.0%), and capital expenditures of ¥332.1B (25.6% of Revenue) represent an aggressive expansion phase and are 1.8× depreciation (¥184.9B). Expansion of advanced-node production capacity is a foundation for medium-term Revenue and EBITDA growth, but near term Operating margin has declined to 21.2% (from 23.9% -2.7pt) as startup costs and higher cost ratios (66.6%, from 65.1% +1.5pt) have emerged. Operating CF/EBITDA ratio of 0.78x and FCF ¥9.1B show cash conversion has slowed due to investment burden; pace of recovery in Operating margin via utilization and yield improvements, and the trend in ROIC improvement, will be key metrics for investment decisions.
Room for improvement in working capital management: Accounts receivable of ¥326.1B increased 17.9% YoY, outpacing Revenue growth of 9.8%, and DSO of about 92 days far exceeds manufacturing averages (~60 days). Inventory days ~20 and DPO ~81 with CCC ~32 mean overall efficiency is maintained, but longer receivable collection suggests potential changes in customer payment terms or collection risk. Operating CF ¥360.6B is 1.45x Net Income and is healthy, but the accounts receivable increase (-¥22.9B) pressures operating cash flow; achieving DSO shortening (target <60 days) would materially improve working capital efficiency and FCF generation.
Sustainability of financial income contribution and re-acceleration of core earnings: The large YoY increase in Net Income (¥249.5B, +150.9%) was driven by financial income of ¥71.5B (from ¥34.1B +¥37.4B) and tax normalization (effective tax rate 25.4% from 67.7%). Financial income composition is not disclosed but is presumed to include FX-related gains and higher deposit interest, implying dependence on external conditions. Core Operating Income was slightly down at ¥275.3B (YoY -2.4%), with Operating margin down -2.7pt; re-acceleration of core business earnings is essential. If supply capacity expansion and price-mix improvements proceed, recovery to the 23% range of Operating margin and a sustainable upward profit trend could be expected. Financial position is very strong with Equity Ratio 75.6% and Net Cash ¥497.0B, allowing ongoing growth investment and scope to increase shareholder returns (payout ratio 21.4%).
This report was generated automatically by AI analyzing XBRL financial statement disclosures. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the firm based on public financial statements. Investment decisions are your responsibility; consult a professional advisor as appropriate before making investment decisions.