Taisei Lamick Group Head Quarter & Innovation Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥15.95B
• Operating Income: ¥1.08B
• Net Income: ¥901M
• EPS: ¥95.21

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend 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

Taisei Lamick Group Co., Ltd. (49940) reported FY2026 Q2 consolidated results under JGAAP with revenue of ¥15.95bn, up 4.2% YoY, but operating income declined 20.3% YoY to ¥1.08bn, indicating meaningful margin compression. Gross profit was ¥4.14bn, yielding a gross margin of 25.9%, while operating margin stood at 6.8% versus an estimated 8.9% in the prior-year period. Ordinary income of ¥1.11bn was slightly above operating income, implying modest positive non-operating contributions. Net income declined 33.9% YoY to ¥0.60bn, with EPS of ¥95.21, as the effective tax burden was substantial. DuPont analysis shows ROE of 2.37%, driven by a 3.74% net margin, 0.475x asset turnover, and low financial leverage of 1.33x. ROA approximates 1.78%, highlighting modest overall returns despite a strong balance sheet. Cash generation was solid: operating cash flow (OCF) reached ¥2.17bn, 3.63x net income, reflecting robust earnings-to-cash conversion and non-cash charges (notably ¥626m of D&A). The balance sheet remains conservative with equity of ¥25.17bn and total liabilities of ¥9.06bn, implying an equity ratio of roughly 74.9% (despite the reported 0.0% equity ratio metric being non-informative). Liquidity is strong, with a current ratio of 206.7% and working capital of ¥9.21bn; interest-bearing leverage appears minimal as interest expense was only ¥0.6m and interest coverage is extremely high at 1,786x. Operating leverage proved negative this half: higher sales did not translate into higher profits due to cost inflation and/or higher SG&A, compressing operating margin by roughly 2.1 percentage points YoY. Ordinary income-tax dynamics suggest an effective tax rate near 39–40% based on reported tax expense and net income. Capital allocation visibility is limited: investing cash flow, cash and equivalents, and dividend data are unreported in the XBRL feed, constraining FCF and payout analysis. Nevertheless, assuming maintenance capex roughly in line with D&A, implied FCF would likely be positive given the strong OCF. Overall, operational resilience is evidenced by healthy cash generation and a fortress-like balance sheet, but profitability pressure and subdued ROE weigh on capital efficiency. Management’s ability to restore margins, manage input costs, and control SG&A will be the key to improved returns in the coming periods.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 3.74%
• asset_turnover: 0.475
• financial_leverage: 1.33
• calculated_ROE: 2.37%
• interpretation: Low ROE is primarily a function of modest net margin and slow asset turnover; leverage is low and not a meaningful amplifier of returns. margin_quality:
• gross_margin: 25.9%
• operating_margin: 6.8%
• EBITDA_margin: 10.7%
• YoY_trend_commentary: Operating margin compressed by an estimated ~2.1pp YoY (from ~8.9% to 6.8%), despite 4.2% top-line growth, indicating cost pressure and/or elevated SG&A. operating_leverage: Negative in this half: revenue grew +4.2% YoY while operating income declined -20.3% YoY. Prior-year operating income implied ~¥1.35bn vs. ¥1.08bn current, suggesting costs grew faster than sales. other_observations: Ordinary income exceeded operating income by ~¥35m, reflecting small net non-operating gains; interest expense is negligible, so financial structure does not distort operating performance.

Growth Assessment

revenue_sustainability: Top-line increased 4.2% YoY to ¥15.95bn, implying steady demand. Sustainability will depend on maintaining volumes and pricing amid input cost fluctuations. profit_quality: Net margin of 3.74% is subdued; the decline in operating income despite revenue growth indicates margin pressure from cost inflation and/or SG&A. However, cash realization is strong as OCF significantly exceeded net income. outlook: Near-term profit recovery hinges on pass-through of costs, procurement normalization, and expense discipline. With a strong balance sheet, the company can prioritize efficiency initiatives and selective growth investments, but margin restoration is the primary lever for improved ROE.

Financial Health

liquidity:

• current_ratio: 206.7%
• quick_ratio: 175.3%
• working_capital: 9210614000
• assessment: Ample short-term liquidity with sizeable buffer to meet obligations. solvency_and_capital_structure:
• total_assets: 33594000000
• total_liabilities: 9063487000
• total_equity: 25174000000
• equity_ratio_estimate: 74.9%
• debt_to_equity: 0.36x (using total liabilities/equity as a proxy)
• interest_coverage: 1,786x
• assessment: Very conservative balance sheet with minimal financial risk; solvency is strong and interest burden negligible. notes_on_reported_metrics: The reported equity ratio of 0.0% is a non-disclosure artifact; calculated equity ratio is ~74.9% using available balance sheet figures.

Cash Flow Quality

earnings_quality:

• OCF: 2165205000
• net_income: 596000000
• OCF_to_net_income: 3.63
• interpretation: High cash conversion supported by non-cash D&A (¥626m) and likely favorable working capital; earnings quality appears strong this period. FCF_analysis:
• investing_CF_reported: 0
• capex_proxy: Not disclosed. D&A = ¥626m can serve as a rough maintenance capex proxy.
• FCF: Not directly calculable due to missing investing CF; assuming capex ≈ D&A, indicative FCF could be positive (~¥1.5bn), but this is an assumption, not a reported figure. working_capital_dynamics: End-period working capital is ¥9.21bn; OCF strength suggests either receivable collections, inventory discipline, or payable terms supported cash, though exact drivers are not disclosed.

Dividend Sustainability

payout_ratio_assessment: Reported DPS and payout ratio are shown as 0.00, which likely indicates non-disclosure rather than zero dividends. EPS is ¥95.21; without an actual DPS, payout cannot be assessed. FCF_coverage: Undeterminable given missing investing cash flows and capex. If one assumes maintenance capex ~ D&A, indicative FCF would likely cover a modest dividend, but this is speculative. policy_outlook: With a strong balance sheet and solid OCF, the capacity for shareholder returns exists, but sustainability depends on margin recovery and actual capex plans; disclosure on dividend policy is needed for a definitive view.

Risk Assessment

Business Risks:

• Input cost volatility potentially squeezing gross margins if pass-through lags.
• Negative operating leverage if volumes soften or SG&A continues to rise.
• Customer concentration or sector demand cyclicality (not disclosed but typical for specialized packaging-related businesses).
• FX exposure for imported materials or export sales if applicable (not disclosed).

Financial Risks:

• Limited, given low leverage and high equity ratio.
• Potential working capital swings affecting OCF in weaker periods.
• Effective tax rate near ~39–40% reduces net profitability and ROE.

Key Concerns:

• Operating margin contraction of ~2.1pp YoY despite revenue growth.
• Low ROE (2.37%) relative to capital base, signaling subdued capital efficiency.
• Data gaps on investing cash flows and dividends hinder full cash return assessment.

Investment Implications

Key Takeaways:

• Solid top-line growth (+4.2% YoY) but significant profit contraction (-20.3% operating income, -33.9% net income).
• Strong cash generation (OCF ¥2.17bn; OCF/net income 3.63x) supports earnings quality.
• Balance sheet is robust with ~75% equity ratio and negligible interest burden.
• ROE is low at 2.37%, constrained by margin pressure and modest asset turnover.
• Margin restoration and cost control are the critical near-term levers to improve returns.

Metrics to Watch:

• Operating margin trajectory and gross margin recovery.
• SG&A as a percentage of sales and productivity indicators.
• Working capital turns (inventory days, receivable/payable days) to sustain OCF.
• Capex disclosures and investing cash flows to gauge true FCF.
• Pricing power and cost pass-through effectiveness.
• Effective tax rate normalization and any structural tax changes.

Relative Positioning: Financially conservative with superior balance sheet strength versus typical peers, but currently weaker margin momentum and ROE; performance improvement hinges on cost discipline and potential pricing actions.

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