AISAN TECHNOLOGY CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥3.11B
• Operating Income: ¥206M
• Net Income: ¥41M
• EPS: ¥33.64

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

Aisan Technology Co., Ltd. (4667) delivered a strong FY2026 Q2 cumulative performance, highlighted by a 28.4% YoY increase in revenue to ¥3.11bn and a sharp rebound in profitability. Operating income rose 208.3% YoY to ¥206m, and net income climbed 270.3% YoY to ¥177m, indicating meaningful operating leverage on top-line growth. Gross profit reached ¥988m, implying a gross margin of 31.8%, while operating margin improved to approximately 6.6% (¥206m/¥3,110m), pointing to better cost discipline and/or mix effects. Ordinary income of ¥207m compares closely to operating income, reflecting minimal non-operating drag given modest interest expense of ¥2.6m. The company’s cash generation outpaced accounting earnings, with operating cash flow (OCF) of ¥415m yielding an OCF/Net Income ratio of 2.34, a positive signal for earnings quality. Depreciation and amortization of ¥123m supports EBITDA of ¥329m and an EBITDA margin of 10.6%, suggesting improved cost absorption and scale benefits. Balance sheet strength is notable: total assets of ¥8.88bn and equity of ¥6.27bn imply an equity ratio around 70–71%, despite the equity ratio metric being unreported; liabilities are a modest ¥2.32bn. Liquidity is ample with a current ratio of 352.5% and quick ratio of 342.1%, supported by working capital of ¥4.61bn. Financial risk is low, evidenced by a debt-to-equity ratio of 0.37x and exceptional interest coverage of 78.8x. The effective tax rate is not reported in the metrics, but inferred at roughly 12.9% (¥26.8m/¥207m) from the income statement, which aided bottom-line expansion. Asset turnover of 0.350 and financial leverage of 1.42 result in a calculated ROE of 2.82% for the period; annualization would imply a higher run-rate ROE if performance sustains, though second-half seasonality should be considered. The absence of reported investing cash flows and free cash flow limits visibility on capital intensity and reinvestment pace; however, the strong OCF provides headroom for growth investments. Dividend data (DPS and payout) are not disclosed; nonetheless, the current balance sheet and cash generation indicate potential capacity, subject to capital allocation priorities. Overall, the company is executing well on growth while preserving balance sheet resilience, with improving profitability quality and low financial risk. Key watchpoints include sustaining revenue momentum, margin resilience amid project mix changes, and the trajectory of working capital and capex in the second half. Data gaps (equity ratio, cash and equivalents, investing cash flows, dividend metrics, share count) constrain granularity, but the available figures paint a constructive operating and financial picture.

Profitability Analysis

ROE decomposition (DuPont) indicates: Net Profit Margin 5.69% × Asset Turnover 0.350 × Financial Leverage 1.42 = ROE 2.82% for the period. Margin quality improved materially YoY: operating income grew +208% on +28% revenue, indicating strong operating leverage and cost control. Gross margin of 31.8% and EBITDA margin of 10.6% support the view that scale and mix effects are contributing to profitability. Operating margin of ~6.6% shows significant recovery versus prior-year softness (not quantified here), and the proximity of ordinary income to operating income reflects limited non-operating headwinds. Interest expense is negligible (¥2.6m), yielding an interest coverage ratio of 78.8x and underscoring low financial burden. The inferred effective tax rate of ~12.9% (based on income tax vs. ordinary income) aided net margin expansion. Asset turnover at 0.350 suggests moderate efficiency for a solutions/software and mapping-related business; improvements from higher utilization and delivery cadence could enhance ROE. Financial leverage of 1.42 is conservative, so future ROE uplift will rely more on margin and turnover improvements rather than leverage. Overall, profitability is on an improving trend with positive operating leverage, backed by high-quality earnings conversion to cash.

Growth Assessment

Revenue grew 28.4% YoY to ¥3.11bn in the first half, signaling healthy demand recovery in core segments. The outsized increase in operating income (+208.3%) versus sales suggests mix shift toward higher-margin projects/products or improved delivery efficiency. Net income growth of +270.3% indicates incremental benefits from operating leverage and a benign non-operating/tax environment. Sustainability will depend on order intake, backlog conversion, and second-half seasonality, which can be meaningful in project-based businesses. The asset turnover level (0.350) indicates room for efficiency gains if the revenue trajectory holds. EBITDA growth and stable D&A (¥123m) suggest the current asset base can support near-term growth without disproportionate capex, though investing cash flow data are not available. With strong OCF (¥415m), the company has capacity to fund working capital for growth. Outlook hinges on continued momentum in GIS/HD mapping and related solutions, as well as public and enterprise demand cycles; absent detailed segment disclosure, we assume growth is broad-based. Profit quality appears sound given high OCF/NI, but monitoring revenue mix and one-off items is important to gauge repeatability.

Financial Health

Liquidity is robust: current ratio 352.5%, quick ratio 342.1%, and working capital of ¥4.61bn indicate substantial short-term headroom. Solvency is strong with total liabilities at ¥2.32bn versus equity of ¥6.27bn, implying low leverage and considerable balance sheet cushion. The reported equity ratio is unprovided; based on total equity/total assets, the implied equity ratio is approximately 70.6% (¥6.27bn/¥8.88bn). Debt service capacity is excellent given interest coverage of 78.8x and minimal interest expense of ¥2.6m. Capital structure is conservative, with a debt-to-equity ratio of 0.37x; incremental borrowing capacity exists if required for growth. Inventory is modest at ¥190m, consistent with a software/services-heavy mix and limiting inventory risk. Overall, financial flexibility is high, supporting both operating continuity and investment needs.

Cash Flow Quality

Earnings quality appears high: OCF of ¥415m versus net income of ¥177m yields an OCF/NI of 2.34, indicating strong cash conversion, likely aided by favorable working capital movements and solid collections. EBITDA of ¥329m and D&A of ¥123m suggest a healthy non-cash component supporting OCF. Free cash flow cannot be assessed because investing cash flow is not disclosed (reported as 0 indicates unreported), and cash & equivalents are also unreported. Working capital levels are ample (¥4.61bn), reducing liquidity risk; however, the durability of OCF will depend on sustaining timely receivables collection and disciplined project billing. Absent capex detail, we cannot determine maintenance vs. growth investment intensity; monitoring future investing CF disclosures will be key. Overall, cash flow quality trends positive based on OCF, but full FCF assessment is constrained by data limitations.

Dividend Sustainability

Dividend per share and payout ratio are not disclosed for the period, and FCF is not calculable due to missing investing cash flow data. From a capacity standpoint, current profitability (net income ¥177m) and strong OCF (¥415m) indicate room to sustain or consider dividends, subject to reinvestment priorities and any strategic initiatives. With a conservative balance sheet and low interest burden, the company has flexibility; however, without DPS guidance or historical policy context in this dataset, sustainability cannot be formally assessed. We will monitor: official dividend policy statements, full-year payout intentions, and FCF once investing cash flows are reported.

Risk Assessment

Business Risks:

• Project timing and acceptance risk affecting quarterly revenue recognition and margins
• Revenue concentration in specific verticals (e.g., public sector GIS, automotive HD mapping) leading to demand volatility
• Competitive pressures in mapping/GIS/ITS and software niches potentially compressing margins
• Technology and R&D execution risk in rapidly evolving autonomous/ADAS-related domains
• Talent retention and cost inflation for specialized engineers impacting delivery and profitability
• Potential seasonality and second-half weighting typical of project businesses

Financial Risks:

• Working capital swings affecting OCF despite strong current metrics
• Limited disclosure on investing cash flows obscures capex and acquisition commitments
• Customer credit risk if receivables growth outpaces collections in expansion phases
• Foreign exchange exposure if international revenues or procurement are material (not disclosed here)

Key Concerns:

• Sustainability of elevated operating leverage driving profit growth
• Lack of visibility on capex/FCF due to unreported investing cash flows
• Potential margin variability from project mix and delivery schedules

Investment Implications

Key Takeaways:

• Strong top-line growth (+28.4% YoY) with outsized operating profit recovery (+208.3%)
• Improving margin profile: gross margin 31.8%, operating margin ~6.6%, EBITDA margin 10.6%
• High-quality earnings: OCF/NI of 2.34 and interest coverage of 78.8x
• Robust balance sheet with implied equity ratio ~70.6% and low leverage (D/E 0.37x)
• ROE at 2.82% for H1; potential to improve via continued margin and turnover gains
• Data gaps on investing CF, cash, DPS, and share count limit precision on FCF and per-share analysis

Metrics to Watch:

• Order intake and backlog conversion to assess revenue sustainability
• Operating margin and gross margin to gauge operating leverage durability
• Working capital days (DSO/DPO/DIO) and OCF consistency
• Investing cash flow (capex/M&A) to determine true FCF and reinvestment intensity
• ROE progression (margin and asset turnover) through the second half
• Dividend policy disclosures and payout intentions

Relative Positioning: Within Japanese listed GIS/mapping and ITS/ADAS solution peers, Aisan Technology appears financially conservative with strong liquidity and low leverage, showing improving operating efficiency and cash conversion; continued execution on scalable software/services and high-value mapping projects will be key to maintaining margin momentum and enhancing ROE versus 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