ASKA Pharmaceutical Holdings Co.,Ltd. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥17.64B
• Operating Income: ¥1.48B
• Net Income: ¥1.27B
• EPS: ¥43.88

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

Aska Pharmaceutical Holdings (4886) posted FY2026 Q1 consolidated results under JGAAP showing solid top-line growth but pressured margins. Revenue rose 7.9% YoY to ¥17.64bn, evidencing resilient demand in core franchises despite a challenging domestic pricing environment. Gross profit was ¥8.17bn with a gross margin of 46.3%, indicating healthy product economics for a pharma company with a branded/generic mix. Operating income declined 15.9% YoY to ¥1.48bn, compressing the operating margin to 8.4%, suggesting higher SG&A and/or R&D intensity versus the prior year. Ordinary income reached ¥1.62bn, and net income was ¥1.24bn (-2.3% YoY), translating to a net margin of 7.05%. EBITDA was ¥2.55bn, with a 14.4% margin, highlighting solid cash earnings capacity aided by ¥1.07bn in D&A. DuPont metrics point to low quarterly ROE of 1.80%, driven by modest asset turnover (0.171) and moderate financial leverage (1.49x). Liquidity is strong: current ratio 254% and quick ratio 189%, with working capital of ¥35.17bn providing ample buffer for operations. The capital structure is conservative with a debt-to-equity ratio of 0.45x and exceptional interest coverage of 134.5x, reflecting minimal interest burden (¥11m interest expense). Operating cash flow of ¥1.16bn was ~0.93x net income, indicating acceptable cash conversion; D&A supported OCF, while working capital likely absorbed some cash. Financing cash outflows were ¥2.41bn, likely debt repayments or other shareholder/financing items; however, reported DPS and cash balances are shown as zero (unreported), limiting dividend and liquidity conclusions. Several items are unreported (e.g., cash and equivalents, investing cash flows, equity ratio, shares outstanding, DPS), so analyses rely on available non-zero data and standard pharma seasonality assumptions. The mix of top-line growth with margin compression suggests operating leverage turned adverse this quarter, likely from elevated R&D or commercial spend. Balance sheet strength mitigates downside risk, but sustainability of growth and path to margin normalization are key to improving ROE. Monitoring price revisions, product mix shifts, and pipeline milestones will be critical for forward profitability. Overall, the quarter shows a fundamentally sound platform with near-term profitability pressure but solid liquidity and solvency.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 7.05%
• asset_turnover: 0.171
• financial_leverage: 1.49
• calculated_ROE: 1.80%
• commentary: ROE is modest due to low asset velocity and mid-single-digit net margin; leverage is conservative and not a material ROE driver. margin_quality:
• gross_margin: 46.3%
• operating_margin: 8.4%
• EBITDA_margin: 14.4%
• net_margin: 7.05%
• observations: Gross margin remains healthy for a specialty pharma mix, but the spread from gross to operating margin narrowed this quarter, implying higher SG&A/R&D intensity. The gap between operating and net margins is small given low interest expense. operating_leverage: Despite 7.9% YoY revenue growth, operating income declined 15.9% YoY, indicating negative operating leverage in the quarter, likely from increased R&D spend, promotion costs, or one-off operating items. D&A of ¥1.07bn (6.1% of sales) supports EBITDA but does not offset higher operating expenses. other_notes: Interest expense of ¥11m is immaterial; interest coverage at 134.5x underscores that financing costs do not constrain profitability.

Growth Assessment

revenue_sustainability: Revenue growth of 7.9% YoY to ¥17.64bn appears broad-based resilience; however, sustainability depends on product mix durability, competitive dynamics (including generics), and NHI price revisions. No segment data provided to attribute drivers. profit_quality: Net income decline (-2.3% YoY) versus revenue growth points to margin compression. With low interest burden and typical tax rates, the pressure likely arises in operating expenses. EBITDA margin at 14.4% remains solid but below what would be expected if operating leverage were positive. outlook: Key swing factors include the cadence of NHI price revisions, launch ramp of new products, lifecycle management, and R&D milestones. Absent mix headwinds, margins could recover as spending normalizes; however, further commercial/R&D investments may keep operating margin in high-single digits near term.

Financial Health

liquidity:

• current_ratio: 253.7%
• quick_ratio: 189.2%
• working_capital: ¥35.17bn
• commentary: Strong short-term liquidity with sizable quick assets relative to current liabilities. Inventory at ¥14.76bn is meaningful but not excessive given pharma supply needs. solvency:
• debt_to_equity: 0.45x
• interest_coverage: 134.5x
• total_assets: ¥102.95bn
• total_equity: ¥69.23bn
• total_liabilities: ¥31.34bn
• commentary: Conservative balance sheet; leverage is low and serviceability is excellent. Equity ratio is shown as 0.0% but is unreported; based on totals, implicit equity ratio would be roughly 67%. capital_structure: Predominantly equity-funded with manageable liabilities; negligible interest cost suggests limited interest-bearing debt or low rates on borrowings.

Cash Flow Quality

earnings_quality: OCF of ¥1.16bn is 0.93x net income of ¥1.24bn—acceptable cash conversion for Q1. D&A of ¥1.07bn supports cash earnings; working capital movements likely offset part of the add-back. FCF_analysis: Investing CF is shown as 0 (unreported). Without capex detail, FCF cannot be reliably calculated. The reported 'Free Cash Flow: 0' reflects data unavailability rather than true zero. working_capital_dynamics: Current assets of ¥58.05bn and current liabilities of ¥22.88bn yield strong coverage. Inventory at ¥14.76bn is notable for a single quarter; changes in inventories and receivables/payables are likely the main OCF swing factors.

Dividend Sustainability

payout_ratio_assessment: Annual DPS and payout ratio are shown as 0.00 (unreported). Based on EPS of ¥43.88 for Q1, earnings capacity exists for a dividend, but no conclusion can be drawn from the provided data. FCF_coverage: FCF coverage cannot be assessed due to missing investing cash flow data. OCF of ¥1.16bn provides a base, but capex and R&D capitalization (if any) are unknown. policy_outlook: With a strong balance sheet and low leverage, the company has potential flexibility for shareholder returns; however, management policy and full-year guidance are needed to assess sustainability.

Risk Assessment

Business Risks:

• NHI drug price revisions in Japan compressing margins
• Generic competition and loss of exclusivity on key products
• Execution risk on pipeline approvals and market uptake
• Product mix shifts impacting gross margin
• Supply chain and inventory management risks affecting service levels and cash conversion
• Regulatory and pharmacovigilance risks inherent to pharma

Financial Risks:

• Potential working capital build increasing cash needs
• R&D and SG&A spend variability causing operating leverage swings
• Limited visibility on capex and investment cash flows due to unreported items
• Exposure to reimbursement timing affecting receivables

Key Concerns:

• Operating margin compression despite revenue growth (-15.9% YoY OP)
• Low quarterly ROE at 1.80% driven by low asset turnover
• Data gaps (cash, investing CF, DPS, equity ratio) constrain full assessment

Investment Implications

Key Takeaways:

• Top-line growth of 7.9% YoY with healthy 46.3% gross margin
• Operating margin compressed to 8.4% as expenses outpaced revenue growth
• Strong liquidity (current ratio 254%, quick ratio 189%) and conservative leverage (D/E 0.45x)
• Robust interest coverage (134.5x) underscores low financing risk
• OCF at 0.93x net income signals acceptable cash conversion, but FCF is not determinable from data
• Quarterly ROE of 1.80% highlights need for improved margin and/or asset efficiency

Metrics to Watch:

• SG&A and R&D as a percentage of sales (drivers of operating leverage)
• Inventory days and receivables/payables days (working capital efficiency)
• EBITDA margin trajectory and operating margin recovery
• NHI price revision impact and product mix evolution
• Pipeline milestones, launch performance, and LOE exposures
• Capex and investing cash flows to gauge true FCF

Relative Positioning: Within Japan mid-cap specialty pharma, Aska shows a stronger-than-average balance sheet and liquidity, mid-teens EBITDA margin, but lower ROE due to modest asset turnover and near-term margin pressure.

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
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