Immuno-Biological Laboratories Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥485M
• Operating Income: ¥142M
• Net Income: ¥72M
• EPS: ¥15.21

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

Immuno-Biological Laboratories Co., Ltd. (45700) delivered a strong FY2026 Q2 print with clear operating momentum and margin expansion. Revenue grew 9.3% year over year to ¥485.0m, while operating income surged 109.0% to ¥142.0m, evidencing substantial operating leverage. Net income rose 98.0% to ¥141.0m, with EPS reported at ¥15.21. Profitability metrics are robust: gross margin is shown at 57.7% and EBITDA margin at 30.5%, indicating a favorable mix and improved cost discipline. DuPont decomposition points to a 29.07% net margin, 0.247x asset turnover, and 1.19x financial leverage, yielding an ROE of 8.52%. Liquidity is exceptionally strong, with a current ratio of 494.2% and quick ratio of 479.0%, supported by working capital of ¥1,108.98m. The balance sheet appears conservative: total liabilities are ¥331.0m against equity of ¥1,655.0m, and the reported debt-to-equity ratio is 0.20x. Interest coverage is very high at 229.4x, highlighting de minimis financial risk. Operating cash flow was ¥76.78m, implying an OCF/Net Income conversion of 0.54x for the half-year, below earnings, likely reflecting working capital consumption or timing effects. Free cash flow is not observable because investing cash flows and cash balances are not disclosed (zeros indicate unreported, not actual zeros). An effective tax rate of 0.0% and a negative income tax line (¥-7.3m) suggest utilization of tax credits or loss carryforwards in the period. The company paid no dividends (DPS ¥0.00), consistent with a reinvestment stance or a cautious capital return posture. The equity ratio is shown as 0.0% in reported data (unreported), but based on total equity and assets it approximates 84%, reinforcing balance sheet resilience. There is a minor inconsistency between reported gross profit (¥279.98m) and the arithmetic difference of revenue and cost of sales; however, the provided margin metrics should be prioritized for analysis. Overall, fundamentals indicate improving earnings power on a solid balance sheet, with the main watchpoint being cash conversion versus reported profit. Data limitations around cash, investing cash flows, and share count constrain some per-share and FCF analyses.

Profitability Analysis

ROE of 8.52% is driven primarily by a high net profit margin (29.07%), modest asset turnover (0.247x), and low financial leverage (1.19x). Operating margin expansion is evident: operating income grew +109% YoY on +9.3% revenue growth, signaling strong operating leverage and improved cost structure. Gross margin is reported at 57.7%, indicating favorable product mix/pricing and cost control despite input cost pressures. EBITDA of ¥148.06m implies a 30.5% margin, suggesting healthy underlying profitability and limited non-cash burden (D&A ¥6.06m). Ordinary income (¥149m) exceeds operating income (¥142m), implying positive financial/other income offsetting small interest expense (¥0.62m). The effective tax rate is reported at 0.0% with a negative tax expense, likely reflecting tax attributes; this boosted net margin temporarily. Overall margin quality appears strong, but sustainability depends on maintaining mix, pricing, and scale benefits, and the non-recurring nature (if any) of tax credits.

Growth Assessment

Top-line growth of +9.3% YoY to ¥485.0m suggests continued demand for the company’s products/services. Profit growth far outpaced revenue, with operating income up +109% and net income up +98%, reflecting significant operating leverage and structural cost improvements. The widened margins (EBITDA margin 30.5%, net margin 29.1%) indicate better fixed-cost absorption and potentially higher value-added sales. The jump in profitability may also be aided by favorable other income and tax effects, which may not recur at the same magnitude. Asset turnover at 0.247x is consistent with a capital-rich balance sheet; incremental growth should continue to drop through meaningfully if revenue momentum persists. Outlook hinges on sustaining revenue growth in core markets and maintaining pricing/mix tailwinds; any normalization in tax/other income could moderate net margin. Near-term growth quality is solid but should be monitored through cash conversion and working capital dynamics.

Financial Health

Liquidity is very strong with a current ratio of 494.2% and quick ratio of 479.0%, supported by current assets of ¥1,390.32m and current liabilities of ¥281.34m. Working capital stands at ¥1,108.98m, providing ample cushion for operations and growth investments. Solvency is conservative: total liabilities of ¥331.03m versus equity of ¥1,655.0m translate to a debt-to-equity ratio of 0.20x. The reported equity ratio is 0.0% (unreported), but implied equity/asset ratio is approximately 84% (¥1,655.0m / ¥1,965.0m), underscoring balance sheet strength. Interest coverage is extremely high at 229.4x, indicating negligible financial distress risk. Inventories are modest at ¥42.61m, suggesting limited inventory risk at this stage. Overall capital structure is low leverage with substantial financial flexibility.

Cash Flow Quality

Operating cash flow of ¥76.78m versus net income of ¥141.0m yields an OCF/NI of 0.54x, indicating weaker cash conversion in the period relative to earnings. This gap likely reflects working capital investment (e.g., receivables growth, lower payables) and timing, and possibly tax effects given the negative tax line. Depreciation and amortization are low (¥6.06m), so earnings are predominantly cash-based absent working capital swings. Free cash flow cannot be fully assessed due to unreported investing cash flows (Investing CF shown as 0 indicates non-disclosure) and unreported cash balances. Financing cash flow was an outflow of ¥38.86m, suggesting some form of shareholder return or debt repayment, though details are not disclosed. Cash conversion should be monitored across subsequent quarters to confirm whether the current shortfall is temporary or structural.

Dividend Sustainability

The company paid no dividends (DPS ¥0.00), with a reported payout ratio of 0.0%. Given positive earnings and strong balance sheet metrics, the decision likely reflects reinvestment priorities or a conservative capital policy. FCF coverage cannot be evaluated because FCF is not measurable with unreported investing cash flows. With low leverage and robust liquidity, the capacity to introduce or raise dividends exists in principle, but sustainability would depend on consistent OCF generation and visibility on growth investments. Absent explicit policy guidance and with limited cash flow detail, the outlook for dividends remains indeterminate.

Risk Assessment

Business Risks:

• Revenue concentration in specific products/markets typical for specialized biotech/diagnostics firms
• Pricing and reimbursement pressures affecting margins
• R&D and product pipeline execution risk
• Regulatory and quality-compliance risks across markets
• Supply chain constraints for critical reagents and materials

Financial Risks:

• Lower-than-earnings cash conversion (OCF/NI 0.54x) indicating working capital sensitivity
• Potential normalization of tax benefits given negative tax expense and 0% effective tax rate
• Exposure to FX on imports/exports if applicable (not disclosed)
• Limited disclosure on cash, investing flows, and interest-bearing debt composition

Key Concerns:

• Sustainability of expanded margins given outsized profit growth versus revenue
• Unreported cash and investing cash flow data hinder full FCF assessment
• Minor inconsistency between reported gross profit and revenue minus cost of sales
• Possible one-off effects in other income/taxes influencing net income

Investment Implications

Key Takeaways:

• Strong operating leverage: +109% YoY operating income on +9.3% revenue
• High profitability with 57.7% gross margin and 30.5% EBITDA margin
• ROE of 8.52% driven by high net margin and low leverage
• Exceptional liquidity (current ratio ~494%) and low balance sheet risk
• Cash conversion lagging earnings (OCF/NI 0.54x) warrants monitoring
• Tax credits/benefits boosted bottom line; sustainability uncertain
• FCF and cash position not assessable due to unreported investing CF and cash data

Metrics to Watch:

• OCF/NI ratio and working capital turnover (AR, inventory, AP days)
• Gross and operating margins to gauge mix and cost discipline
• Revenue growth trajectory and order pipeline visibility
• Effective tax rate normalization and impact on net margin
• Equity/asset ratio (implied) and any changes in leverage
• Investing cash flows and capex to clarify FCF profile

Relative Positioning: Within Japan small-cap healthcare/diagnostics peers, IBL exhibits above-average margins and a stronger balance sheet (implied equity ratio ~84%) with low leverage, but shows weaker cash conversion in the latest half and limited disclosure on cash/FCF relative to best-in-class peers.

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