| Metric | This Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥79.4B | ¥70.5B | +12.6% |
| Operating Income / Operating Profit | ¥29.6B | ¥24.9B | +18.7% |
| Profit Before Tax | ¥28.1B | ¥23.6B | +19.2% |
| Net Income / Net Profit | ¥19.6B | ¥15.3B | +28.3% |
| ROE | 6.8% | 5.3% | - |
FY2026 Q1 delivered revenue of ¥79.4B (YoY +¥8.9B +12.6%), Operating Income of ¥29.6B (YoY +¥4.7B +18.7%), Ordinary Income of ¥28.1B (YoY +¥4.5B +19.2%), and Net Income of ¥19.6B (YoY +¥4.3B +28.3%), achieving year-over-year increases across all profit measures. Expansion of the customer base in the single segment (Rent Guarantee Business) drove revenue growth. Operating margin improved to 37.2% from 35.3% in the prior-year period (+1.9pt), as expense control and scale benefits enhanced profitability. Net margin rose to 24.7% from 21.7% (+3.0pt), indicating operating leverage flowed through to the net income line.
[Revenue] Revenue of ¥79.4B was up ¥8.9B (+12.6%) year-over-year. The increase was mainly driven by higher contract volumes and recurring contracts in the single segment (Rent Guarantee Business). The company operates a business model specialized in rent guarantee services; stable tenant demand and share gains in the rental market supported sales growth. Regional and segment breakdowns are not disclosed, but given the single-segment portfolio, the revenue increase can be attributed primarily to net additions to guarantee contracts.
[Profitability] Operating expenses were ¥50.9B (vs ¥46.9B in the prior-year period, +¥4.0B +8.5%), rising at a lower rate than revenue (+12.6%), resulting in an operating expense ratio improvement to 64.1% from 64.7% (‑0.6pt). Consequently, Operating Income was ¥29.6B (+18.7%), with an Operating Margin of 37.2% (vs 35.3% prior year, +1.9pt), driven by fixed-cost absorption and credit management optimization. Finance costs were minor at ¥1.4B (¥1.3B prior year), leading to Ordinary Income of ¥28.1B (+19.2%). Other income totaled ¥1.1B and other expenses ¥0.0B, indicating limited effect from non-operating items; main driver of profit growth was operating leverage. After deducting income taxes of ¥8.5B (¥8.3B prior year), Net Income reached ¥19.6B (+28.3%), with Net Margin improving to 24.7% (vs 21.7% prior year, +3.0pt). No special profits or losses were disclosed; divergence between Ordinary Income and Net Income is explainable by taxes only, and there is no indication of one-off profit inflation. In conclusion, the company achieved quality profit growth—higher revenue and profits driven by operating leverage and cost discipline.
[Profitability] Operating Margin of 37.2% improved by 1.9pt from 35.3% in the prior-year period, confirming lower expense ratios and emergence of scale benefits. Net Margin of 24.7% (vs 21.7% prior year, +3.0pt) reflects the improvement in Operating Margin and only a limited increase in finance costs (¥1.4B, 1.8% of revenue). ROE stood at 6.8%; despite the substantial Net Margin improvement, low total asset turnover (0.106x, with Goodwill of ¥360.4B included) and a heavy asset base are constraining capital efficiency.
[Cash Quality] Cash and cash equivalents were ¥148.2B compared with ¥159.8B at the prior-year period end (down ¥11.6B). Seasonally, Q1 cash outflows related to corporate tax payments (accrued corporate taxes decreased from ¥25.6B to ¥10.3B) reduced cash, but working capital levels are broadly stable. Accounts receivable were ¥121.2B (vs ¥117.8B prior year, +¥3.4B); although collection periods continue to lengthen, this remains within the credit management scope of the guarantee business.
[Investment Efficiency] Total asset turnover was 0.106x (annualized 0.42x). Goodwill of ¥360.4B (47.9% of total assets) and intangible assets of ¥74.3B account for approximately 57.8% of total assets of ¥752.1B, explaining the low asset turnover and making short-term improvement unlikely. Fixed asset ratio is high at 61.6%; tangible fixed assets are limited at ¥13.3B. While goodwill and intangibles have no amortization burden under applicable accounting, sensitivity to impairment risk is elevated.
[Financial Soundness] Equity Ratio was 38.6%, up 0.7pt from 37.9% at the prior-year period end, and Net Assets were ¥290.2B (vs ¥288.8B prior-year period end, +¥1.4B). Interest-bearing debt totaled ¥258.7B (short-term borrowings ¥9.6B, long-term borrowings ¥249.1B), resulting in a D/E ratio of 0.89x (flat vs 0.90x prior-year period end). Interest coverage is approximately 20.4x (Operating Income ¥29.6B ÷ Finance Costs ¥1.4B), remaining high and indicating strong resilience to rising interest rates. Current Ratio was 154.6% (Current Assets ¥289.1B ÷ Current Liabilities ¥186.9B), showing no short-term liquidity concerns.
A cash flow statement was not disclosed; funding trends are analyzed from balance sheet movements. Cash and cash equivalents were ¥148.2B (vs ¥159.8B prior-year period end, down ¥11.6B). This decrease is primarily attributable to corporate tax payments at the prior fiscal year end, as accrued corporate taxes fell from ¥25.6B to ¥10.3B (a ¥15.3B decrease). Accounts receivable rose to ¥121.2B (vs ¥117.8B prior-year period end, +¥3.4B), reflecting working capital increases associated with revenue growth. Interest-bearing debt remained stable at ¥258.7B, indicating no new borrowing financing. Retained earnings were ¥208.0B (vs ¥206.6B prior-year period end, +¥1.4B), with internal reserves growing due to Net Income of ¥19.6B; however, the increase was limited by dividend payouts (estimated dividend outflow approximately ¥120B based on prior-year dividend of ¥230.08 per share). Overall, cash generation from operating activities is stable and short-term liquidity risk is assessed as low.
Operating Income of ¥29.6B constitutes the majority of Ordinary Income of ¥28.1B. Non-operating income totaled ¥1.1B (financial income ¥0.0B, other income ¥1.1B), representing 1.4% of revenue, and non-operating expenses were finance costs ¥1.4B and other expenses ¥0.0B. The increase in finance costs was marginal (+¥0.1B from ¥1.3B prior year). Earnings quality is therefore attributable to core operations. The reduction from Ordinary Income ¥28.1B to Net Income ¥19.6B is mainly due to income taxes of ¥8.5B; no special gains or losses were disclosed, so there is no evidence of one-off profit inflation. Comprehensive income of ¥19.6B equals Net Income, with other comprehensive income at zero, indicating no divergence from unrecognized gains/losses. The accounts receivable increase of ¥3.4B is within the natural rise from revenue growth and shows no abnormal accrual buildup. Earnings quality is high, indicating a sustainable profit structure.
Full Year guidance anticipates Revenue ¥330.7B (YoY +10.9%), Operating Income ¥119.0B (YoY +20.5%), and Net Income ¥79.0B (YoY +24.9%). Q1 progress rates versus full-year guidance are: Revenue 24.0% (¥79.4B ÷ ¥330.7B), Operating Income 24.8% (¥29.6B ÷ ¥119.0B), and Net Income 24.9% (¥19.6B ÷ ¥79.0B), roughly consistent with a standard quarterly pace (25% per quarter), indicating on-track progress toward full-year targets. Full-year Operating Margin is forecast at 36.0% (¥119.0B ÷ ¥330.7B), below Q1’s 37.2%, likely reflecting conservative assumptions for higher costs and seasonality in the second half. Forecast EPS is ¥151.46, and forecast dividend is ¥38.00. The payout ratio relative to full-year Net Income of ¥79.0B is 25.1% (¥38.00 × 52,156 thousand shares ÷ ¥79.0B), a sustainable level. There were no revisions to performance forecasts or dividend forecasts at Q1; company plans remain unchanged.
Dividend guidance is ¥38.00 for the full year, reflecting the 1-for-2 stock split effective October 11, 2025. Based on Q1 Net Income ¥19.6B and full-year Net Income guidance ¥79.0B, the annual dividend outflow is approximately ¥19.8B (¥38.00 × 52,156 thousand shares), and the full-year payout ratio is 25.1%, a conservative level. Prior-year actual dividend was ¥230.08 (pre-split), which converts to ¥115.04 post-split; the current guidance of ¥38.00 appears lower, but this may reflect a change in disclosure method from quarterly to annual presentation or differences between interim and year-end dividend aggregation rather than an actual policy shift. There is no share buyback disclosed; shareholder returns consist only of dividends. Given ROE of 6.8% and Equity Ratio of 38.6%, a payout ratio of 25.1% is assessed as a policy aiming to retain internal reserves for growth investment while maintaining stable dividends. With cash at ¥148.2B and Operating Income at ¥29.6B, dividend sustainability is high.
Business Concentration Risk: The company is 100% dependent on a single segment (Rent Guarantee Business). Contraction of the rental market, intensified competition, or delinquency rates exceeding assumptions could directly damage earnings. Revenue of ¥79.4B and Operating Income of ¥29.6B are entirely derived from this business, and lack of diversification increases volatility.
Goodwill Impairment Risk: Goodwill of ¥360.4B equals 124.2% of Net Assets of ¥290.2B. Under IFRS, goodwill is not amortized, but if future impairment tests show business value below assumptions, a substantial one-off impairment could materially erode Net Assets and sharply reduce the Equity Ratio of 38.6%.
Working Capital & Collection Risk: Accounts receivable of ¥121.2B equate to roughly 139 days relative to annualized revenue of ¥317.6B, indicating extended collection periods. If accounts receivable growth outpaces revenue growth, cash conversion could worsen and strain liquidity.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 37.2% | – | – |
| Net Margin | 24.7% | – | – |
Due to insufficient industry benchmark data, relative positioning is difficult to assess, but Operating Margin of 37.2% and Net Margin of 24.7% are presumed to be high.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 12.6% | – | – |
Revenue growth of 12.6% maintains double-digit growth, consistent with market expansion in the guarantee business and share gains.
※ Source: Company aggregation
High-profitability structure and realization of operating leverage: Operating Margin 37.2% and Net Margin 24.7% improved by 1.9pt and 3.0pt respectively from the prior year, confirming a structure in which expenses grow more slowly than sales. With Revenue growth +12.6%, Operating Income growth +18.7%, and Net Income growth +28.3%, operating leverage is flowing through to Net Income; sustaining scale benefits and cost control will be key to maintaining profitability.
Structural constraints on capital efficiency and reliance on goodwill: ROE of 6.8% remains suppressed despite Net Margin improvement, due to low Total Asset Turnover of 0.106x and heavy asset composition including Goodwill ¥360.4B (47.9% of total assets, 124.2% of Net Assets). Under IFRS, goodwill is not amortized, but future impairment tests could materially reduce Net Assets if business value underperforms assumptions. Improving capital efficiency will require sustained revenue growth and higher asset turnover, or disposal/review of low-return assets.
Financial soundness and dividend sustainability: Equity Ratio 38.6%, D/E 0.89x, and Interest Coverage approx. 20.4x indicate a stable financial position; cash of ¥148.2B substantially exceeds short-term borrowings of ¥9.6B. Payout Ratio 25.1% is conservative and balances internal reserve accumulation for growth with stable dividends. However, the pace of increase in accounts receivable and lengthening collection periods warrant monitoring as a working capital risk.
This report was automatically generated by AI analyzing XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmark data are reference information aggregated by the company from public financial statements. Investment decisions are your responsibility; consult advisors as needed before making investment decisions.