C.Uyemura & Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥41.70B
• Operating Income: ¥9.57B
• Net Income: ¥6.72B
• EPS: ¥425.10

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

C. Uyemura (上村工業株式会社, 4966) delivered solid mid-year results for FY2026 Q2 under JGAAP on a consolidated basis, with both top-line and operating profit growth outpacing inflationary concerns. Revenue rose 2.3% YoY to ¥41.7bn, while operating income increased 4.9% YoY to ¥9.58bn, indicating positive operating leverage. Gross profit came in at ¥16.02bn, yielding a robust gross margin of 38.4%, consistent with a high-value chemical/process solutions mix. Operating margin of 23.0% and EBITDA margin of 25.5% underscore strong unit economics and cost discipline. Net income was ¥6.86bn (+2.0% YoY), reflecting a net margin of 16.45% and indicating that below-OP items were largely neutral to marginally positive. DuPont analysis shows an ROE of 6.38%, driven by a healthy net margin (16.45%) and conservative leverage (Assets/Equity of 1.22), albeit tempered by low asset turnover (0.319). Balance sheet quality appears strong: current ratio 469.7% and quick ratio 446.4% suggest ample liquidity and low short-term refinancing risk. Solvency is conservative with a debt-to-equity ratio of 0.23x and total liabilities at only ¥24.5bn against equity of ¥107.6bn. Operating cash flow of ¥6.51bn tracks net income closely (OCF/NI 0.95), indicating good cash conversion with limited accrual risk this period. Financing cash outflows of ¥3.39bn imply shareholder returns and/or debt service, though itemization is not disclosed. Several reported zeros (e.g., Equity Ratio, Investing CF, Cash & Equivalents, DPS, BVPS) reflect undisclosed items rather than true zeros, constraining some ratio diagnostics (e.g., net cash position and FCF). The implied tax burden appears normal (income tax ¥3.12bn vs. net income suggests an approximate statutory-like rate), despite the ‘effective tax rate’ metric displaying 0.0% due to data limitations. Overall, profitability and liquidity are strong, leverage is low, and cash conversion is solid; the primary watchpoints are sustaining growth given modest revenue expansion and maintaining margins amid potential input cost and FX variability. The outlook depends on demand in end-markets for surface treatment chemicals/equipment and pricing discipline. Given the interim nature of the data, conclusions about capex intensity and dividend capacity are provisional pending full-year disclosures.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 16.45%
• asset_turnover: 0.319x
• financial_leverage: 1.22x (Assets/Equity = 130.8bn / 107.6bn)
• calculated_ROE: 6.38%
• commentary: ROE is margin-driven rather than asset-turnover-driven, with very conservative leverage. Improving turnover or modestly increasing leverage could lift ROE, but the company appears to prioritize balance sheet strength. margin_quality:
• gross_margin: 38.4% (¥16.02bn GP on ¥41.70bn revenue)
• operating_margin: 23.0% (¥9.58bn OI)
• EBITDA_margin: 25.5% (¥10.65bn EBITDA)
• net_margin: 16.45% (¥6.86bn NI)
• tax_observation: Income tax of ¥3.12bn implies an approximate tax rate near 31% on pre-tax earnings, even though the ‘effective tax rate’ metric displayed 0.0% due to disclosure limitations. operating_leverage:
• yoY_revenue_growth: 2.3%
• yoY_operating_income_growth: 4.9%
• implied_operating_leverage: ≈2.1x
• interpretation: Cost base flexibility and/or mix/pricing tailwinds supported profits growing faster than sales.

Growth Assessment

revenue_sustainability: Top-line growth of 2.3% YoY is modest; sustainability hinges on demand from core end-markets and pricing discipline. No geographic or segment mix disclosed, limiting conclusions on breadth of growth. profit_quality: Operating margin expansion vs. sales growth indicates healthy cost control and product mix. Ordinary income closely tracks operating income, suggesting limited financial/other income distortion. outlook: With strong interim margins and lean leverage, the company is positioned to navigate demand fluctuations. Key swing factors include input costs, FX, and the pace of customer activity; data limitations (no order backlog or segment detail) constrain visibility.

Financial Health

liquidity:

• current_ratio: 469.7% (CA ¥86.65bn / CL ¥18.45bn)
• quick_ratio: 446.4% ((CA−Inventories) ¥82.37bn / CL ¥18.45bn)
• working_capital: ¥68.20bn
• commentary: Exceptionally strong short-term liquidity; cash and cash equivalents were undisclosed, but current asset coverage is ample. solvency:
• debt_to_equity: 0.23x (Total liabilities ¥24.47bn / Equity ¥107.57bn)
• assets_to_equity: 1.22x
• equity_ratio_note: Reported equity ratio of 0.0% reflects non-disclosure rather than actual zero; balance sheet composition indicates high equity buffer. capital_structure: Low leverage with abundant equity; conservative posture supports resilience and optionality for investment or shareholder returns.

Cash Flow Quality

earnings_quality: OCF/NI of 0.95 indicates strong cash conversion and limited accrual build at the interim stage. FCF_analysis: Investing cash flow and capex were undisclosed (reported as 0). Consequently, free cash flow cannot be reliably calculated despite the tabular FCF field showing 0. working_capital: Inventories of ¥4.29bn are modest relative to H1 revenue (≈10% of sales for the period), suggesting disciplined inventory management. Detailed receivables/payables movements are undisclosed.

Dividend Sustainability

payout_ratio_assessment: EPS is ¥425.10; payout ratio reported at 0.0% reflects non-disclosure of DPS, not an actual zero payout. Without DPS or full-year guidance, payout sustainability cannot be quantified. FCF_coverage: Free cash flow is not determinable due to lack of capex disclosure; thus FCF coverage of dividends cannot be assessed. policy_outlook: Financing cash outflows of ¥3.39bn suggest either shareholder returns and/or debt service, but without breakdowns we cannot infer policy stance. Strong balance sheet and cash generation support capacity for distributions, pending board policy and capex needs.

Risk Assessment

Business Risks:

• End-market demand variability affecting plating chemicals and equipment volumes.
• Input cost and raw material price volatility potentially pressuring margins.
• Product mix shifts impacting gross margin and operating leverage.
• Regulatory and environmental compliance costs tied to chemical processes.
• Technology and customer qualification cycles lengthening sales conversion.

Financial Risks:

• FX exposure in revenues and/or sourcing (not disclosed), which could affect margins and reported earnings.
• Working capital swings at period-end affecting OCF conversion in future quarters.
• Potential extraordinary items under JGAAP causing volatility between ordinary and net income.
• Reinvestment requirements (capex/R&D) not disclosed, creating uncertainty around future FCF.

Key Concerns:

• Modest revenue growth (+2.3% YoY) against a high-margin base raises sensitivity to any volume softness.
• Limited disclosure on investing cash flows and dividend policy restricts visibility on capital allocation.
• Low asset turnover (0.319x) constrains ROE despite strong margins.

Investment Implications

Key Takeaways:

• Strong profitability profile (OPM ~23%, EBITDA margin ~26%) with positive operating leverage.
• Conservative balance sheet (D/E ~0.23x) and ample liquidity (current ratio ~4.7x).
• Solid cash conversion (OCF/NI ~0.95) supports earnings quality.
• ROE (6.38%) is margin-led; low asset turnover and conservative leverage cap return on equity.
• Disclosure gaps (capex, cash, equity ratio detail, DPS) limit assessment of FCF and capital returns.

Metrics to Watch:

• Gross and operating margin trajectory versus input costs and FX.
• OCF/NI ratio and working capital movements (receivables, inventories, payables).
• Capex and investing cash flows to gauge FCF and growth reinvestment.
• Revenue growth pace and mix to assess sustainability of operating leverage.
• Any updates on dividend policy or share repurchases in financing CF breakdown.

Relative Positioning: Within specialty chemicals/surface treatment peers, the company exhibits above-average margins and below-average leverage, with ROE moderated by low asset turnover and a conservative capital structure.

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
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