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 Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥322.1B | ¥290.9B | +10.7% |
| Operating Income | ¥33.8B | ¥38.2B | -11.4% |
| Profit Before Tax | ¥37.0B | ¥36.4B | +1.7% |
| Net Income | ¥27.5B | ¥26.6B | +3.4% |
| ROE | 2.9% | 2.9% | - |
Although revenue increased during the quarter, operating income declined. The primary reason was the reversal of temporary other income recognized in the previous year, while the profitability of the core business improved. Revenue was ¥322.1B (+10.7% YoY), operating income was ¥33.8B (-11.4% YoY), and net income was ¥27.5B (+3.4% YoY). The gross margin improved to 31.3% from the previous year, and segment profit (core operating income) increased substantially, indicating that the apparent decline in earnings was attributable to the lapse of non-recurring factors.
【Revenue】Revenue increased 10.7% YoY to ¥322.1B. The core Automotive Parts Business (51.2% composition ratio, ¥165.0B, +12.8%) led growth, while the Industrial Materials Business (¥102.8B, +8.2%) and High-Performance Elastomer Products Business (¥39.8B, +10.7%) also contributed to the revenue increase.
【Profit and Loss】Operating income declined 11.4% YoY to ¥33.8B, primarily because other income, which was ¥15.9B in the previous year, decreased to ¥0.7B in the current period as a temporary factor fell away. Total segment profit (core operating income) rose substantially to ¥29.6B from ¥19.6B in the previous year, indicating improved profitability in the core business. The decline in financial expenses from ¥4.1B to ¥0.8B also contributed, enabling profit before tax to remain nearly flat at ¥37.0B (+1.7%), while net income was ¥27.5B (+3.4%). The overall structure is one of revenue growth and earnings growth on a core basis, while consolidated operating income declined due to non-recurring factors.
By segment, the Automotive Parts Business (revenue of ¥165.0B, operating income of ¥15.7B, margin of 9.5%, operating income YoY +33.1%) was the largest in both revenue and profit. The Industrial Materials Business (¥102.8B, ¥10.8B, margin of 10.5%) had the highest profit margin, with operating income increasing significantly by +52.7%. The High-Performance Elastomer Products Business (¥39.8B, ¥2.8B, margin of 7.1%) recorded a substantial increase in operating income of +260.3% YoY, showing marked improvement. The Other Businesses (¥14.5B, ¥1.4B, margin of 10.0%) also maintained a high profit margin. All segments achieved revenue and profit growth; however, the Automotive Parts Business’s revenue dependence (51.2%) should be noted as a business concentration risk.
【Profitability】The operating margin was 10.5%, down from approximately 13.1% in the previous year due to the reversal of temporary other income recognized in the previous year. However, the gross margin improved by approximately +2.3pt YoY to 31.3%, indicating stronger product mix and pricing capabilities in the core business. The net profit margin was 8.5%, slightly below approximately 9.1% in the previous year.【Cash Quality】Operating Cash Flow (OCF) was ¥33.1B, approximately 1.2 times net income of ¥27.5B, confirming the company’s earnings power. However, cash conversion related to working capital slowed somewhat due to increases in accounts receivable and inventories.【Investment Efficiency】ROE was 2.9%, while total asset turnover remained low, leaving room for improvement in capital efficiency.【Financial Soundness】The equity ratio was high at 70.0%. With cash and cash equivalents of ¥190.6B versus interest-bearing debt of approximately ¥49.2B, the company was effectively in a net cash position and maintained a solid financial foundation.
Operating Cash Flow was ¥33.1B, down 37.7% YoY, mainly due to increased income taxes paid (-¥15.9B, compared with -¥8.3B in the previous year) and the accumulation of working capital resulting from an increase in accounts receivable (-¥18.2B). Investing Cash Flow was -¥17.6B, reflecting capital expenditures centered on capital investments of -¥14.9B. Financing Cash Flow was -¥42.8B, with dividend payments of -¥32.6B and share repurchases of -¥3.6B as the primary cash outflows. Free Cash Flow (OCF + investing cash flow) was ¥15.4B, below the combined amount of dividends and share repurchases during the quarter. However, cash and cash equivalents remained substantial at ¥190.6B, and considering the company’s full-year cash generation capacity and available funds, no immediate funding concerns are evident. Improving cash conversion through better turnover of accounts receivable and inventories will be a key issue going forward.
Current-period earnings were driven by the core business (total segment profit of ¥29.6B, up more than +49% YoY), indicating improved recurring profitability. Meanwhile, other income, which was ¥15.9B in the same period of the previous year, decreased to ¥0.7B in the current period. This lapse of a temporary factor caused the apparent decline in consolidated operating income and should be noted. Below operating income, financial income increased to ¥3.9B (¥2.2B in the previous year), while financial expenses decreased to ¥0.8B (¥4.1B in the previous year), supporting profit before tax. Equity-method investment income of ¥4.0B also made a stable contribution. OCF was approximately 1.2 times net income, confirming cash generation supporting reported earnings; however, the increase in accounts receivable and inventories indicates that accrual-related factors have become somewhat stronger.
Progress against the full-year plan was 26.8% for revenue (¥322.1B/¥1,200.0B) and 30.8% for operating income (¥33.8B/¥110.0B), exceeding the simple quarterly benchmark of 25%. The company’s full-year plan forecasts operating income of ¥110.0B (-8.9% YoY), representing a conservative outlook that may incorporate changes in demand trends and costs during the second half. There were no revisions to the earnings or dividend forecasts for the current quarter, and the plan remains unchanged at this time.
The company forecasts an annual dividend of ¥100, implying a payout ratio of approximately 51% against full-year forecast EPS of ¥196.31. During the quarter, the company paid ¥32.6B in dividends to shareholders of the parent and repurchased ¥3.6B of treasury stock. Quarterly free cash flow of ¥15.4B was below the combined amount of dividends and share repurchases, reflecting the concentration of dividend payments in Q1. Given cash and cash equivalents of ¥190.6B and the company’s effectively net-cash financial position, there appears to be no issue with the sustainability of shareholder returns for the full year.
Business concentration risk: Revenue from the Automotive Parts Business accounted for 51.2% (¥165.0B/¥322.1B), meaning that fluctuations in demand cycles for this business and OEM production plans could have a significant impact on performance.
Slower cash conversion: Accounts receivable increased by +¥19.3B from the end of the previous fiscal year, while inventories increased by +¥0.9B, weighing on OCF. Improving collection and inventory management efficiency in line with revenue growth will be a key focus going forward.
Earnings volatility due to the lapse of temporary income: Other income recognized in the previous year of ¥15.9B decreased to ¥0.7B in the current period, becoming a factor affecting consolidated operating income. Interpretation of period-over-period comparisons will therefore require attention to the presence or absence of non-recurring items.
Profitability and Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 10.5% | 8.7% (4.2%–14.2%) | +1.8pt |
| Net Profit Margin | 8.5% | 7.0% (3.2%–10.6%) | +1.5pt |
Both the company’s operating margin and net profit margin exceed the industry median, indicating that profitability is relatively high within the industry.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 10.7% | 6.2% (-1.1%–14.6%) | +4.5pt |
The revenue growth rate exceeds the industry median and is near the upper limit of the IQR, demonstrating high growth relative to the industry.
※Source: Compiled by the company
Although consolidated operating income declined 11.4% YoY, total segment profit increased substantially by approximately +49% YoY, indicating from the earnings data that the underlying performance was affected by an apparent change resulting from the lapse of temporary income recognized in the previous year.
The gross margin improved to 31.3% from the previous year, confirming higher profitability in the Industrial Materials and High-Performance Elastomer Products Businesses. Meanwhile, OCF declined 37.7% YoY due to increases in accounts receivable and inventories, making cash conversion a key item to monitor going forward.
Against a solid financial foundation comprising an equity ratio of 70.0% and effective net cash of approximately ¥141B, the company is balancing shareholder returns with a payout ratio of approximately 51% and capital expenditures.
This is a mechanically calculated reference range based solely on publicly disclosed data using a residual income model (Ohlson-type model with an explicit 5-year fade). It is not a forecast of the market share price or a recommendation of any specific investment action.
| Scenario | Theoretical Share Price |
|---|---|
| bear | ¥2,222 |
| base | ¥2,277 |
| bull | ¥2,330 |
| Calculation Assumption | Value |
|---|---|
| Book Value Per Share (BPS) | ¥2,300 |
| Adjusted Forecast EPS | ¥216.5 |
| Cost of Equity r | 9.77% (10-year government bond 2.77% + equity risk premium 6.00% + size premium 1.00%) |
| Residual Income Persistence Coefficient ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 50.9% |
| Forecast EPS Confidence Adjustment | ×1.103 (based on the track record of guidance achievement in the same industry) |
| implied PBR / PER |
Sensitivity: ¥2,216–¥2,342 for cost of equity ±1%, and ¥2,276–¥2,278 for ω±0.1.
Notes:
(Calculation model: Residual income model / Interest rate reference month: 2026-07 / This value does not forecast or guarantee the future share price)
This report is an earnings analysis document automatically generated by AI through analysis of XBRL earnings flash report data. It does not recommend investment 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 discretion and responsibility, after consulting with professionals as necessary.
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| 0.99x / 10.5x |