SHUEI YOBIKO Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥4.89B
• Operating Income: ¥-241M
• Net Income: ¥-290M
• EPS: ¥-59.02

Income Statement

Balance Sheet

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

Shuei Yobiko (TSE:4678) reported FY2026 Q2 (cumulative) consolidated results under JGAAP with modest top-line growth but continued losses. Revenue was ¥4.887bn, up 0.3% YoY, indicating essentially flat demand in a competitive and demographically challenged juku market. Gross profit was ¥439.7mn, translating to a low gross margin of 9.0%, which points to considerable cost of sales pressure and/or pricing constraints. Operating loss was ¥241mn, an improvement of 6.5% YoY, suggesting some operating discipline despite weak gross margin. Ordinary loss was ¥240mn, broadly in line with operating loss, implying limited financial income/expense impact (interest expense was ¥6.1mn). Net loss widened to ¥396mn, with the net margin at -8.1%; the YoY change of -32.9% indicates a notably larger bottom-line deficit than the prior year. On a DuPont basis, ROE was -9.72% with net margin -8.10%, asset turnover 0.548x, and financial leverage 2.19x; losses are primarily margin-driven rather than asset-utilization or leverage effects. The current ratio stood at 104.1%, indicating tight but positive short-term liquidity; quick ratio is the same due to inventories not being disclosed. Total assets were ¥8.925bn and total liabilities ¥4.890bn, implying a liabilities-to-equity ratio of 1.20x and assets-to-equity (financial leverage) of 2.19x. Interest coverage is negative (-39.7x) given operating losses, though absolute interest expense is modest. Cash flow metrics (OCF/NI, FCF, cash balance) are unreported in the XBRL and shown as zero placeholders; thus, cash generation and funding runway cannot be assessed from this dataset. Depreciation and amortization are also unreported, limiting EBITDA analysis; the reported EBITDA of zero is a placeholder and should not be interpreted as actual. The company paid no dividend (DPS ¥0), consistent with the loss-making position and a prudent stance on capital preservation. Tax expense of ¥26.5mn was recorded despite a pretax loss, which may reflect statutory minimum taxes or deferred tax effects; the displayed effective tax rate metric of 0.0% is not decision-useful in this context. Overall, the quarter shows a business stabilizing revenue but still grappling with structurally low margins and high fixed-cost absorption. Operational improvements are visible at the operating income line, but translation to net profit remains challenged. Data gaps around cash flows and cash balances are a key limitation and restrain confidence in liquidity duration and dividend outlook assessments.

Profitability Analysis

ROE_decomposition: DuPont: Net Profit Margin -8.10% × Asset Turnover 0.548 × Financial Leverage 2.19 = ROE -9.72%. Losses are driven predominantly by weak margins rather than asset utilization. margin_quality: Gross margin is 9.0% (GP ¥439.7mn on revenue ¥4.887bn), indicating significant cost of sales pressure and/or pricing competition. Operating margin is approximately -4.9% (OI -¥241mn). SG&A is implied at ~¥680.7mn (GP ¥439.7mn minus OI -¥241mn), or ~13.9% of revenue, highlighting a heavy cost base relative to scale. operating_leverage: With revenue up 0.3% and operating loss improving 6.5% YoY, there are signs of cost containment. However, the low gross margin suggests limited ability to leverage fixed costs; incremental revenue currently does not lift margins meaningfully. Interest expense is modest (¥6.1mn), so financial leverage is not the main driver of losses.

Growth Assessment

revenue_sustainability: Revenue growth of +0.3% YoY suggests stable but stagnant demand. Given industry headwinds (demographics, competition), sustained growth likely depends on enrollment gains, pricing/ARPU improvements, or mix shift to higher-value offerings. profit_quality: Operating loss improved YoY while net loss widened by ~33% YoY, indicating items below operating income (taxes, non-operating) adversely affected the bottom line. Gross margin at 9.0% indicates limited pricing power and/or high instructional and facility costs. outlook: Near-term profit trajectory hinges on lifting gross margin (pricing, utilization, class mix) and tightening SG&A. Seasonality in the juku business may help in peak terms, but structural margin constraints must be addressed to return to sustainable profitability.

Financial Health

liquidity: Current assets ¥1.860bn vs current liabilities ¥1.787bn yields a current ratio of 1.04x and working capital of ¥73.8mn, indicating thin liquidity. Quick ratio equals current ratio due to inventories not being disclosed. solvency: Total liabilities ¥4.890bn vs equity ¥4.074bn implies liabilities/equity of 1.20x and assets/equity (financial leverage) of 2.19x. Interest expense is modest (¥6.1mn), but negative operating income results in negative interest coverage (-39.7x). capital_structure: Total assets ¥8.925bn and equity ¥4.074bn imply an equity ratio around 45.6% based on provided balances (the reported equity ratio field shows 0.0% due to non-disclosure). Leverage appears moderate for the sector, but ongoing losses could erode equity over time.

Cash Flow Quality

earnings_quality: OCF, investing CF, and financing CF are unreported in this dataset (displayed as zero placeholders). As a result, accrual intensity, OCF-to-NI, and cash conversion cannot be evaluated. FCF_analysis: Free cash flow is not disclosed; capital expenditure and D&A are unreported, preventing assessment of maintenance vs growth investment and FCF coverage. working_capital: Working capital is modest at ¥73.8mn. With current ratio near 1.0x, cash management (receivables collections, payables terms, seasonal tuition inflows) will be critical. Specific AR/AP/inventory dynamics are not disclosed.

Dividend Sustainability

payout_ratio_assessment: DPS is ¥0 with a negative net income (¥-396mn). A payout would be unsustainable under current earnings. FCF_coverage: FCF is not disclosed; thus, dividend coverage by FCF cannot be assessed. Given losses and thin liquidity, resumption would likely require clear positive OCF and margin recovery. policy_outlook: With losses and limited visibility on cash generation, a conservative dividend stance is likely to continue until profitability normalizes and cash buffers are demonstrably sufficient.

Risk Assessment

Business Risks:

• Enrollment and retention volatility in a competitive cram school (juku) market
• Demographic headwinds (declining school-age population) pressuring addressable market
• Pricing pressure limiting ARPU and gross margin expansion
• High fixed costs (facilities, instructor staffing) leading to low operating leverage at current scale
• Seasonality causing intra-year volatility in utilization and margins
• Potential execution risk in curriculum, digital offerings, and channel mix

Financial Risks:

• Tight liquidity (current ratio ~1.04x) with modest working capital buffer
• Negative operating income leading to negative interest coverage despite low interest burden
• Equity erosion risk if losses persist, potentially constraining investment capacity
• Limited visibility on cash flows and cash balance due to non-disclosure
• Possible lease obligations (not disclosed here) that function like fixed debt

Key Concerns:

• Gross margin at 9.0% is structurally low and constrains earnings recovery
• Net loss widened ~33% YoY despite slight operating improvement
• Cash flow data absent, limiting assessment of runway and funding flexibility

Investment Implications

Key Takeaways:

• Revenue essentially flat (+0.3% YoY), pointing to demand stagnation
• Operating loss narrowed 6.5% YoY, indicating some cost control
• Gross margin remains weak at 9.0%, limiting operating leverage
• Liquidity is thin (current ratio 1.04x; working capital ~¥74mn)
• Leverage moderate (liabilities/equity 1.20x), but losses pressure equity
• Cash flow and cash balances are not disclosed, increasing uncertainty

Metrics to Watch:

• Enrollment trends and ARPU by segment/course
• Gross margin trajectory and cost of sales per student
• SG&A ratio and fixed-cost absorption (facility and instructor utilization)
• Operating cash flow, cash and equivalents, and net debt/lease liabilities
• Same-school sales and classroom utilization rates
• Progress on digital/online offerings and pricing initiatives

Relative Positioning: Within listed education peers, Shuei Yobiko shows weaker margins and persistent losses relative to operators with higher tutoring utilization and franchised/light-asset models; leverage is moderate but liquidity is tight, making cash generation and margin recovery key differentiators.

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