NANO MRNA Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥41M
• Operating Income: ¥-399M
• Net Income: ¥-440M
• EPS: ¥-6.20

Income Statement

Balance Sheet

Cash Flow Statement

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

Verdict: FY2026 Q2 was a weak quarter operationally, with deep operating losses and negative free cash burn despite a notable revenue increase from a very small base. Revenue reached 0.41, rising 433.8% YoY, but remained far short of covering SG&A of 4.30, resulting in operating income of -3.99. Gross profit was 0.31 with a high gross margin of 76.1%, indicating pricing/mix strength on limited sales, but scale is insufficient. Ordinary income was -3.84 after 0.17 of interest income, and net income was -4.40 (EPS -6.20 yen). Operating cash flow was -3.12; with financing cash flow of -6.10, cash burn accelerated at the consolidated level. Asset efficiency remains extremely low (asset turnover 0.012), reflective of a development-stage profile. ROE was -16.7%, driven by a very large negative net margin (-1,073%), modest leverage (1.28x), and negligible turnover. ROIC printed at -24.0%, well below the 5% warning threshold, underscoring subscale operations. Liquidity is ample near term (current ratio 410%, working capital 21.39), with cash and deposits of 9.74 versus current liabilities of 6.89. However, earnings quality is weak (OCF/NI 0.71x), signaling that accrual losses are not fully translating to cash yet, but cash burn remains material. Margin comparison in basis points versus prior periods is not assessable due to limited disclosures; current operating margin is about -973%, ordinary margin about -936%, and net margin about -1,073%. Non-operating income was mainly interest income (0.17), implying no reliance on one-off gains. Balance sheet shows no reported interest-bearing debt; equity of 26.34 supports solvency for now despite cumulative retained losses (-34.27). Forward-looking, the company must either secure additional funding, accelerate partnering/licensing revenues, or curb SG&A to extend runway; absent these, dilution risk rises. Overall, the quarter reinforced the pre-commercial biotech profile: growing but still trivial revenue, heavy opex, negative ROIC, and reliance on cash on hand and potential external financing.

Profitability Analysis

ROE decomposition (DuPont): ROE = Net Profit Margin × Asset Turnover × Financial Leverage = (-1,073.2%) × 0.012 × 1.28 ≈ -16.7%. The component that dominates the change is the Net Profit Margin, which is extremely negative due to operating losses (SG&A 4.30 vs revenue 0.41) despite a high gross margin. Asset turnover is very low (0.012), consistent with early-stage companies with sizable cash and R&D assets but minimal sales; leverage is modest at 1.28x and not a material driver. Business reason: revenue is nascent while fixed cost base (personnel, clinical, admin) is heavy, producing severe negative operating leverage; the reported interest income (0.17) marginally offsets losses. Sustainability: the high gross margin is likely sustainable on small volumes but not meaningful until scale; the negative NPM should improve only with step-changes in licensing milestones or commercialization—without them, current loss levels are likely to persist. Concerning trends: SG&A (4.30) vastly outpaced revenue (0.41), implying SG&A growth > revenue growth on an absolute basis and intensifying operating deleverage. No signs of one-time non-operating gains; profit quality depends on cost control and revenue ramp.

Growth Assessment

Revenue increased 433.8% YoY to 0.41 but off a very small base; absolute growth (approx. +0.33) is immaterial relative to SG&A. Gross profit of 0.31 and 76.1% margin suggest favorable unit economics if scaled, but current scale is too low to offset fixed costs. Operating margin stands at approximately -973%, highlighting severe negative operating leverage. With ordinary margin at about -936% and net margin at about -1,073%, profitability is far from breakeven. Non-operating income (0.17 interest) indicates some benefit from cash on hand, but it cannot bridge the operating deficit. Outlook hinges on catalysts such as partnerships, grants, or clinical milestones; absent these, organic revenue growth alone appears insufficient to reach profitability in the near term. Given ROIC at -24.0%, incremental investments should be tightly prioritized toward near-term value inflection points.

Financial Health

Liquidity is strong in the near term: current ratio 410.3% and quick ratio 410.3%, with current assets of 28.28 versus current liabilities of 6.89. There is no warning on leverage: D/E is 0.28x and no interest-bearing debt is reported. Maturity mismatch risk appears low: cash and deposits of 9.74 plus other current assets comfortably exceed current liabilities. Total equity is 26.34 despite accumulated losses (retained earnings -34.27), supported by large capital surplus (56.41). No off-balance sheet obligations are disclosed in the provided data. There are no flags for Current Ratio < 1.0 or D/E > 2.0.

Cash Flow Quality

OCF was -3.12 versus net income of -4.40, yielding OCF/NI of 0.71x, which is below the 0.8 threshold and flags weaker earnings quality. The shortfall indicates that a portion of the accounting loss did not convert to cash outflow in the period, potentially due to working capital movements or non-cash charges not disclosed (depreciation unreported). Free cash flow is not disclosed; however, with negative OCF and unknown capex, FCF is likely negative. Financing CF was -6.10, implying net outflows (e.g., debt repayment or lack of new equity proceeds), which, together with OCF, suggests a reduction in cash balances during the half. Working capital manipulation signs are limited: accounts receivable (0.08) are small relative to revenue (0.41), and inventories are unreported; no abnormal swings can be inferred from available data. Sustainability: absent a funding event or sharp revenue/milestone inflows, continued negative OCF is expected.

Dividend Sustainability

No dividends are reported and the company is loss-making with negative operating cash flow; therefore, a dividend is not applicable or sustainable under current conditions. Payout ratios and FCF coverage are not calculable from the disclosed data. Given development-stage economics and capital needs, distribution policy will likely remain conservative with retention of cash.

Risk Assessment

Business Risks:

• Clinical and development risk: failure or delay in mRNA program milestones could defer commercialization and revenue.
• Commercialization risk: extremely low asset turnover (0.012) and small revenue base highlight execution risk to scale sales.
• Dependence on external partners or grants: lack of material recurring revenue streams increases reliance on partnerships.
• IP and competitive risk in mRNA/biotech space, with rapid innovation cycles.

Financial Risks:

• Cash burn risk: OCF -3.12 with financing outflows -6.10 reduces cash runway.
• Dilution risk: absent operating cash generation, equity issuance may be needed to fund operations.
• Negative ROIC (-24.0%) indicates value dilution risk if capital deployed without clear returns.
• Potential interest rate risk on financial income as interest income (0.17) may decline if rates fall.

Key Concerns:

• Earnings quality flag: OCF/NI at 0.71x (<0.8).
• Persistent operating losses: operating margin ~-973% and net margin ~-1,073%.
• Retained losses (-34.27) despite adequate current equity, implying sensitivity to ongoing deficits.
• Limited revenue visibility; high SG&A relative to revenue (4.30 vs 0.41).

Investment Implications

Key Takeaways:

• Top-line grew sharply YoY but remains immaterial versus the cost base.
• Gross margin is high (76.1%) but overwhelmed by SG&A, leading to deep operating losses.
• Liquidity is comfortable near term (current ratio 410%), but cash burn persists (OCF -3.12).
• ROE (-16.7%) and ROIC (-24.0%) reflect subscale operations and value dilution risk without near-term catalysts.
• Earnings quality is weak (OCF/NI 0.71x), reinforcing the need to monitor cash conversion and burn.

Metrics to Watch:

• Cash and deposits versus quarterly OCF burn to gauge runway.
• SG&A trajectory and hiring pace relative to revenue growth.
• Any disclosed R&D and clinical milestone timelines that could unlock licensing revenue.
• Non-operating items: grants/other income and changes in interest income.
• Equity financing or debt issuance events and resulting dilution/leverage.
• Asset turnover improvement as a proxy for commercialization progress.

Relative Positioning: Within pre-commercial Japanese biotech peers, the company exhibits typical high gross margin potential but below-average operating leverage given the gap between SG&A and revenue; liquidity is adequate short term, yet ROIC and cash burn metrics place it on the higher-risk side absent near-term partnering milestones.

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