These are mechanically computed values based on a residual income model. They are not a forecast of market prices or a recommendation of any investment action, and do not predict or guarantee future share prices. Historical values are computed retrospectively using current guidance-achievement statistics.
| Metric | Current Period | Same Period Last Year | YoY |
|---|---|---|---|
| Revenue | ¥312.6B | ¥273.9B | +14.1% |
| Operating Income | ¥161.5B | ¥147.1B | +9.8% |
| Ordinary Income | ¥163.5B | ¥148.7B | +9.9% |
| Net Income | ¥111.2B | ¥103.3B | +7.7% |
| ROE | 5.8% | 4.9% | - |
USS posted higher revenue and earnings, driven by growth in its core AutoAuction Business and Recycling Business, although profit margins narrowed slightly year on year due to a decline in the gross profit margin. Revenue was ¥312.6B (¥273.9B in the same period last year, YoY+14.1%), Operating Income was ¥161.5B (¥147.1B in the same period last year, YoY+9.8%), and Ordinary Income was ¥163.5B (¥148.7B in the same period last year, YoY+9.9%). Net Income attributable to owners of the parent was ¥109.5B (¥102.3B in the same period last year, YoY+7.0%), while consolidated Net Income, including the portion attributable to non-controlling interests, was ¥111.2B (¥103.3B in the same period last year, YoY+7.7%). The slower earnings growth relative to revenue growth was primarily attributable to the decline in the gross profit margin to 61.3% (63.4% in the same period last year) due to an increase in the cost-of-sales ratio, while the SG&A ratio improved slightly to 9.6% (9.7% in the same period last year).
【Revenue】Revenue was ¥312.6B (YoY+14.1%), with the core AutoAuction Business leading overall performance at ¥242.6B (77.6% of total revenue, YoY+8.0%). In addition, the Recycling Business expanded substantially to ¥34.2B (10.9% of total revenue, YoY+80.8%), while UsedVehicleSalesPurchases also increased revenue to ¥32.6B (10.4% of total revenue, YoY+14.0%). In addition to resilient demand for the used-vehicle auction business, growth in non-core businesses contributed further to overall revenue growth.
【Profit and Loss】Operating Income was ¥161.5B (YoY+9.8%), with the AutoAuction Business accounting for nearly all company-wide profit at ¥157.3B (YoY+7.6%, profit margin of 64.8%). The Recycling Business generated ¥0.28B, up YoY+435.8%, while UsedVehicleSalesPurchases generated ¥0.7B, up YoY+360.0%, highlighting improved profitability in the non-core businesses. The difference between Ordinary Income of ¥163.5B and Net Income attributable to owners of the parent of ¥109.5B was primarily due to income taxes of ¥52.3B (an effective tax rate of approximately 32.0%) and Net Income attributable to non-controlling interests of ¥1.8B. Extraordinary items—extraordinary gains of ¥0.2B and extraordinary losses of ¥0.2B—were both immaterial, and there was virtually no impact from temporary factors. Despite higher revenue and earnings, the Operating Income margin declined to 51.7% (53.7% in the same period last year), while the Net Income margin attributable to owners of the parent declined to 35.0% (37.4% in the same period last year).
By segment, the AutoAuction Business generated revenue of ¥242.6B (YoY+8.0%) and Operating Income of ¥157.3B (YoY+7.6%), maintaining a profit margin of 64.8%. It remains the core business, accounting for nearly all of the company-wide Operating Income of ¥161.5B. The Recycling Business expanded rapidly, generating revenue of ¥34.2B (YoY+80.8%) and Operating Income of ¥2.8B (YoY+435.8%), with its profit margin improving to 8.3%. UsedVehicleSalesPurchases generated revenue of ¥32.6B (YoY+14.0%) and Operating Income of ¥0.7B (YoY+360.0%); although its profit margin remained low at 2.0%, the segment expanded its profit contribution. Profit concentration in the AutoAuction Business remains high, but the strong earnings growth rates of Recycling and UsedVehicleSalesPurchases indicate that the business portfolio is gradually becoming more diversified.
【Profitability】The Operating Income margin was 51.7% (53.7% in the same period last year), while the gross profit margin was 61.3% (63.4% in the same period last year); both declined by approximately 2pt from the previous year, although absolute profitability remains extremely high. The Net Income margin attributable to owners of the parent was 35.0% (37.4% in the same period last year), primarily due to the decline in the gross profit margin.【Cash Flow Quality】Operating Cash Flow (OCF) was ¥43.1B, representing approximately 0.39x Net Income attributable to owners of the parent of ¥109.5B, indicating that cash generation was slower relative to earnings.【Capital Efficiency】ROE was 5.8%, while the ratio of Revenue to total assets, on a quarterly basis, was 0.129x, both improving from the previous year.【Financial Soundness】The Equity Ratio was 78.3% (78.1% in the same period last year), remaining at a high level. Interest-bearing debt is limited, resulting in a substantially debt-free financial structure.
Cash flow from operating activities was ¥43.1B (YoY+8.6%). Compared with Profit Before Tax of ¥163.5B, cash generation was moderate, primarily due to income tax payments of ¥103.4B. Cash flow from investing activities was -¥8.4B, mainly reflecting capital expenditures of ¥3.0B and acquisitions of intangible assets, with no large-scale investments undertaken. Free Cash Flow (Operating CF + Investing CF) was positive at ¥34.6B. Cash flow from financing activities was -¥318.1B, primarily due to share repurchases of ¥180.0B and dividend payments of ¥137.0B. As a result of returning capital to shareholders on a scale substantially exceeding Free Cash Flow, cash and cash equivalents declined from the previous year. Cash and deposits on the balance sheet remained ample at ¥816.9B; however, if total shareholder returns continue to exceed cash flow, cash reserves may continue to trend downward.
Current-period earnings were primarily generated by recurring business activities. Extraordinary gains of ¥0.2B and extraordinary losses of ¥0.2B were both immaterial, and there were few temporary factors that impaired earnings quality. Non-operating income was ¥2.2B (0.7% of revenue), while non-operating expenses were ¥0.3B; the composition was primarily interest income and other items, and non-operating income and expenses were not large enough to materially affect performance. The gap between Ordinary Income of ¥163.5B and Net Income attributable to owners of the parent of ¥109.5B was primarily due to income taxes of ¥52.3B (an effective tax rate of approximately 32.0%) and Net Income attributable to non-controlling interests of ¥1.8B. These were attributable to ordinary tax expenses and the portion attributable to minority shareholders, rather than unusual accounting factors. Comprehensive Income was ¥111.1B, of which ¥109.3B was attributable to owners of the parent, approximately in line with Net Income attributable to owners of the parent of ¥109.5B. Since valuation differences on securities and adjustments related to retirement benefits remained only slightly negative, the gap between Net Income and Comprehensive Income was small, indicating generally stable earnings quality. However, the fact that Operating CF was below Net Income warrants attention when assessing cash-based profitability.
Progress against the full-year earnings forecast was 25.7% for Revenue (¥312.6B/¥1,218.0B), 25.8% for Operating Income (¥161.5B/¥626.0B), 25.8% for Ordinary Income (¥163.5B/¥634.0B), and 25.7% for Net Income attributable to owners of the parent (¥109.5B/¥426.0B), broadly in line with the standard quarterly progress rate of 25%. During the current quarter, revisions were made to both the earnings forecast and the dividend forecast, reflecting a review of the assumptions underlying the full-year outlook. Based on current progress, no significant deviation from the full-year plan is apparent.
The full-year dividend forecast is ¥56.4 per share, implying a Payout Ratio of approximately 60.3% based on the full-year EPS forecast of ¥93.46. Dividend payments during Q1 were ¥137.0B (¥108.0B in the same period last year), and the company also conducted share repurchases of ¥180.0B. Combined dividends and share repurchases brought total shareholder returns to approximately ¥317.0B. Total shareholder returns substantially exceeded Free Cash Flow of ¥34.6B, and were implemented against the backdrop of ample cash and deposits of ¥816.9B. The sustainability of dividends alone appears reasonably high based on the cash balance; however, if total shareholder returns including share repurchases continue, improvement in Operating Cash Flow will be an important prerequisite going forward.
Segment concentration risk: The AutoAuction Business accounts for 77.6% of Revenue and nearly all Operating Income, meaning fluctuations in demand in the used-vehicle auction market and winning bid prices could have a significant impact on company-wide performance.
Decline in the gross profit margin: The gross profit margin declined to 61.3% from 63.4% in the previous year, a decrease of 2.1pt. If this trend continues, the earnings benefit from revenue growth (operating leverage) may weaken.
Weak cash conversion of earnings: Operating CF was ¥43.1B, representing only approximately 0.39x Net Income attributable to owners of the parent of ¥109.5B. Free Cash Flow of ¥34.6B was below total shareholder returns of ¥317.0B through dividends and share repurchases.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Income Margin | 51.7% | 8.1% (2.3%–15.9%) | +43.6pt |
| Net Income Margin | 35.6% | 5.9% (1.6%–10.7%) | +29.7pt |
Both the Operating Income margin and Net Income margin substantially exceed the industry median, indicating an exceptionally high level of profitability within the industry.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 14.1% | 9.3% (0.4%–16.9%) | +4.8pt |
The Revenue growth rate also exceeds the industry median, placing the company in a relatively favorable position in terms of both profitability and growth.
Source: Compiled by the Company
While Revenue increased +14.1%, the Operating Income margin declined from 53.7% in the previous year to 51.7%, and the earnings growth rate (+9.8%) continued to trail the revenue growth rate. The trend in the gross profit margin will be a key structural factor determining the pace of future earnings growth.
Recycling (Operating Income YoY+435.8%) and UsedVehicleSalesPurchases (YoY+360.0%) have rapidly improved profitability. The gradual shift in profit concentration away from AutoAuction is noteworthy as a change in the composition of the business portfolio.
While Operating CF remained at approximately 0.39x Net Income attributable to owners of the parent, total shareholder returns through dividends and share repurchases substantially exceeded Free Cash Flow. Shareholder returns were funded by cash on hand. The future trend in cash generation will be an important consideration in assessing the sustainability of this pace of shareholder returns.
This is a mechanically calculated reference range based solely on publicly disclosed data using a residual income model (Ohlson-type, with an explicit 5-year fade). It is not a forecast of the market price or a recommendation to take any specific investment action.
| Scenario | Theoretical Stock Price |
|---|---|
| bear | ¥577 |
| base | ¥599 |
| bull | ¥625 |
| Calculation Assumption | Value |
|---|---|
| Book Value Per Share (BPS) | ¥419 |
| Adjusted Forecast EPS | ¥99.2 |
| Cost of Equity r | 9.15% (10-year Japanese government bond 2.65% + Equity Risk Premium 6.00% + Size Premium 0.50%) |
| Residual Income Persistence Factor ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 60.4% |
| Forecast EPS Confidence Adjustment | ×1.049 (based on the historical guidance achievement rate of comparable companies) |
| Implied PBR / PER |
Sensitivity: ¥582–¥616 at ±1% for the Cost of Equity, and ¥594–¥605 at ±0.1 for ω.
Notes:
(Calculation model: Residual Income Model / Interest rate reference month: 2026-06 / This value is not a forecast or guarantee of the future stock price)
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It is not a recommendation to invest in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility and, where necessary, after consulting with a professional advisor.
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| 1.43x / 6.0x |