YASUHARA CHEMICAL CO.,LTD. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥3.88B
• Operating Income: ¥530M
• Net Income: ¥361M
• EPS: ¥39.78

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

Yasuhara Chemical (4957) reported solid top-line and operating profit growth in FY2026 Q1 on a standalone JGAAP basis, with revenue of ¥3.885bn (+9.6% YoY) and operating income of ¥530m (+29.2% YoY). Gross profit was ¥892m, implying a gross margin of 23.0%, indicating improved spread or mix versus the prior year. Operating margin expanded to 13.6%, reflecting positive operating leverage and good cost control. Ordinary income of ¥516m tracked close to operating income, consistent with minimal financial/non-operating drag; interest expense was a modest ¥4m and interest coverage was a very strong 132.5x. Despite stronger operations, net income fell 18.2% YoY to ¥361m (net margin 9.3%), suggesting prior-year comparisons benefited from one-offs or unusually low taxes that did not recur. The current quarter’s implied effective tax rate is approximately 34.8% (¥193m tax on roughly ¥554m pre-tax), indicating a normalization higher than the figure shown in the provided “effective tax rate” metric. DuPont analysis yields a quarterly ROE of 1.69%, decomposed into a 9.29% net margin, 0.14x asset turnover, and 1.29x financial leverage; note that this is a single-quarter calculation and not annualized, so interpret with caution. The balance sheet appears conservative, with total liabilities of ¥6.658bn against equity of ¥21.393bn (debt-to-equity 0.31x), and liquidity is ample with a current ratio of 538% and working capital of ¥16.133bn. Ordinary income closely aligning with operating income underscores the core business as the driver of results this quarter. Cash flow statements, depreciation, inventories, and share data were not disclosed (reported as zero), limiting deeper assessment of cash conversion, capital intensity, and per-share metrics. EBITDA-related measures are not meaningful given depreciation is unreported. Dividend data for the period is also unreported (DPS and payout shown as zero), so no inferences on capital return can be drawn from this dataset. Overall, fundamentals point to strengthening core profitability and a robust balance sheet, offset by a weaker bottom line due to taxes or non-operating normalization. For a pine-chemicals/rosin derivative producer like Yasuhara Chemical, margin resilience likely reflects pricing actions, product mix, and potentially favorable FX for exports, but feedstock and energy costs remain important swing factors. Key monitoring items include sustainability of gross margin gains, tax rate normalization, and cash flow conversion once disclosed.

Profitability Analysis

ROE_decomposition: ROE 1.69% (single quarter, not annualized) = Net margin 9.29% × Asset turnover 0.140 × Financial leverage 1.29. Operating margin 13.6% and ordinary margin 13.3% indicate strong core profitability with minimal non-operating drag. margin_quality: Gross margin 23.0% on the back of revenue +9.6% YoY suggests improved pricing/mix or lower input pressure. Operating margin of 13.6% indicates effective SG&A control. Net margin at 9.3% is compressed vs operating due largely to a normalized tax burden (~34.8% implied) rather than financing costs. operating_leverage: Operating income grew +29.2% YoY on +9.6% sales, demonstrating positive operating leverage. This implies fixed-cost absorption and/or cost efficiencies. Sustainability will depend on volume/mix and input cost stability.

Growth Assessment

revenue_sustainability: Top-line growth of +9.6% YoY likely reflects a mix of pricing and end-demand recovery in adhesives, inks, and specialty chemical applications; FX could be supportive for exports. Durability depends on downstream demand (electronics/automotive/packaging) and competitive dynamics. profit_quality: Ordinary income tracking operating income underscores core business strength. The YoY decline in net income despite stronger operating performance points to prior-year one-offs or unusually low taxes; current period taxes appear normalized. outlook: If gross margins near 23% can be maintained, operating leverage should continue to support earnings. Watch raw material spreads (rosin/turpentine/crude-tall-oil derivatives), energy costs, and FX. Near-term trajectory appears constructive operationally, contingent on input cost and demand conditions.

Financial Health

liquidity: Current assets ¥19.812bn vs current liabilities ¥3.679bn yields a current ratio of 538% and working capital of ¥16.133bn. Quick ratio equals the current ratio due to undisclosed inventories; interpret as strong but provisional. solvency: Total liabilities ¥6.658bn against equity ¥21.393bn implies a debt-to-equity of 0.31x and financial leverage of 1.29x, indicating conservative leverage. Interest expense is minimal (¥4m) with coverage >100x. capital_structure: Balance sheet is equity-heavy with ample headroom for investment. The reported equity ratio of 0.0% appears undisclosed rather than literal; based on assets and equity, the implied equity ratio would be approximately 77%.

Cash Flow Quality

earnings_quality: OCF not disclosed; cannot assess OCF/NI reliability. However, the close alignment of operating and ordinary income suggests limited reliance on non-operating items this quarter. FCF_analysis: With OCF and investing cash flows undisclosed, FCF cannot be derived. Depreciation is also undisclosed, preventing assessment of maintenance capex needs and EBITDA. working_capital: Inventories and detailed working capital movements are undisclosed. As such, cash conversion cycle and inventory turnover cannot be analyzed this quarter.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are undisclosed (shown as zero). EPS for the quarter is ¥39.78, but without dividend information and share count, payout assessment is not possible. FCF_coverage: FCF is undisclosed; coverage of any dividend cannot be evaluated from this dataset. policy_outlook: No inference on policy can be made this quarter. Future sustainability should be assessed against full-year earnings, OCF, and capex once available, considering the company’s conservative balance sheet.

Risk Assessment

Business Risks:

• Feedstock price volatility (rosin/turpentine/crude tall oil) impacting spreads
• Energy and utility cost fluctuations affecting manufacturing margins
• Demand cyclicality in end-markets (adhesives, inks, electronics, automotive)
• Foreign exchange volatility affecting export competitiveness and input costs
• Product mix and customer concentration risk in niche specialty chemicals
• Environmental and safety regulations raising compliance and capex needs
• Potential supply chain disruptions for specialty inputs

Financial Risks:

• Tax rate variability and potential one-off tax items affecting net income
• Limited cash flow visibility this quarter due to undisclosed OCF/FCF
• Interest rate changes (albeit low leverage reduces sensitivity)
• Working capital swings if inventories and receivables rise with growth

Key Concerns:

• Net income decline YoY despite stronger operations suggests non-operating/tax normalization headwind
• Absence of cash flow and depreciation data constrains assessment of cash conversion and capital intensity
• Inventory and share data undisclosed, limiting per-share and liquidity quality analyses

Investment Implications

Key Takeaways:

• Core operations strengthened: revenue +9.6% YoY and operating income +29.2% YoY
• Margins improved: gross margin ~23% and operating margin ~13.6%
• Net income down 18.2% YoY likely due to higher/normalized tax rather than operating weakness
• Balance sheet conservative: D/E ~0.31x, strong liquidity (current ratio ~5.4x)
• Ordinary income closely tracks operating income; minimal non-operating noise
• Cash flow, depreciation, and dividend data not disclosed this quarter, limiting cash-based analysis

Metrics to Watch:

• Gross margin and operating margin sustainability
• Implied effective tax rate normalization and drivers of YoY delta
• Raw material spread (selling prices minus feedstock and energy costs)
• FX impact on export margins and input costs
• OCF/Net income once disclosed; FCF and capex intensity
• Inventory levels and turnover; receivables days
• Ordinary vs operating income gap as a quality check

Relative Positioning: Within Japanese specialty chemicals, Yasuhara Chemical appears to combine niche product exposure in pine-chemical derivatives with conservative leverage and improving operating margins; however, limited disclosure this quarter on cash flows and capital intensity constrains comparative cash-based evaluation.

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