Quick View
| Metric | Current Period | Same Period Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥2463.4億 | ¥2102.0億 | +17.2% |
| Operating Income | ¥88.3億 | ¥68.7億 | +28.5% |
| Profit Before Tax | ¥18.7億 | ¥27.4億 | −31.5% |
| Net Income | ¥1.1億 | ¥4.5億 | −75.2% |
| ROE (Annualized) | 0.2% | 1.0% | - |
Executive Summary
Revenue achieved double-digit growth and operating income increased; however, due to the burden of finance costs and the high tax burden, improvement in net income was limited, and the earnings recovery remains fragile. Revenue was ¥2463.4億 (up +17.2% YoY), while operating income was ¥88.3億 (up +28.5% YoY). Meanwhile, net income (consolidated quarterly profit) was ¥1.1億, down -75.2% from ¥4.5億 in the previous year, while profit attributable to owners of the parent was ¥1.9億, representing a turnaround from the previous year's loss of -¥1.5億. Revenue growth was observed across all segments—Building Glass, Automotive Glass, and High-Performance Glass—but finance costs of ¥86.7億 reached almost the same level as operating income and served as a factor depressing profit.
Factors Behind Earnings Fluctuations
【Revenue】Revenue increased across all three segments to ¥2463.4億 (up +17.2% YoY). Automotive Glass accounted for the largest revenue scale at ¥1326.9億 (+20.9%), followed by Building Glass at ¥1008.4億 (+13.0%) and High-Performance Glass at ¥125.8億 (+13.9%). By region, the Americas (+24.5%) and Europe (+17.8%) led growth, while Asia was relatively sluggish at +6.4%.
【Profit and Loss】Operating income increased to ¥88.3億 (up +28.5% YoY), but the gross margin was 22.5%, largely unchanged from the previous year, suggesting that fixed-cost absorption from revenue growth was the primary driver. By segment, the profit margin for Building Glass improved to 8.6% (+1.1pt), and that for High-Performance Glass improved to 17.3% (+5.8pt). In contrast, Automotive Glass declined significantly to 0.9% (-1.3pt), resulting in higher revenue but lower profit. Finance costs of ¥86.7億 significantly exceeded finance income of ¥10.7億, reducing profit before tax to ¥18.7億 (down -31.5% YoY). Combined with the high tax burden of income taxes and other taxes of ¥17.6億 (effective tax rate: 94.0%), consolidated net income was ¥1.1億 (-75.2%). Overall, the company achieved higher revenue and higher operating income, but the structure is one in which non-operating finance costs and the tax burden weigh on net income, meaning that the benefits of revenue growth have not fully translated into overall earnings.
Segment Analysis
Building Glass (41% of revenue composition) generated revenue of ¥1008.4億 (+13.0%), operating income of ¥86.6億 (+30.0%), and a profit margin of 8.6%, achieving higher revenue and higher profit. Automotive Glass (54% of revenue composition) recorded the largest growth in revenue at ¥1326.9億 (+20.9%), but operating income declined to ¥11.9億 (-49.9%) and the profit margin fell to 0.9%, resulting in higher revenue but lower profit. High-Performance Glass (5% of revenue composition) generated revenue of ¥125.8億 (+13.9%), operating income of ¥21.8億 (+71.1%), and a profit margin of 17.3%, the highest profitability among all company segments. Building Glass makes the largest contribution to total company profit, while the deterioration in Automotive Glass profitability is constraining improvement in the company-wide margin.
Key Financial Indicators
【Profitability】The operating margin was 3.6%, improving from 3.3% in the same period of the previous year, but the gross margin of 22.5% was largely unchanged, while the net profit margin was extremely low at 0.05%. 【Cash Quality】Operating CF was -¥138.6億 (a +7.4% improvement YoY), remaining negative, and free CF was -¥281.6億, indicating that capital expenditures of ¥133.6億 could not be funded through internal resources. 【Investment Efficiency】ROE (annualized) was 0.2%, and capital efficiency remained low due to the combination of a low net profit margin and high financial leverage. 【Financial Soundness】The equity ratio was 13.4%, almost unchanged from 13.5% in the previous year. Current assets of ¥3382.2億 compared with current liabilities of ¥5127.5億 indicate that the current ratio was below 1x.
Cash Flow Analysis
Operating CF was -¥138.6億. Although this improved from -¥149.7億 in the same period of the previous year, it remained negative. Interest payments of ¥81.2億 were a significant burden on operating CF, and the company's cash-generating capacity from operating activities was limited. Investing CF was -¥143.0億, primarily due to capital expenditures of ¥133.6億, resulting in negative free CF of -¥281.6億 after combining operating CF and investing CF. Financing CF was +¥123.9億, as proceeds of ¥674.9億 from bond issuance and borrowings exceeded repayments of ¥550.3億, resulting in a funding structure that covers the free CF shortfall through borrowing. Consequently, cash and cash equivalents declined to ¥442.7億 compared with the end of the previous fiscal year, making improvement in internal cash generation an important consideration for future liquidity management.
Earnings Quality
Reported operating income increased to ¥88.3億, up +28.5% YoY. However, operating income after excluding separately disclosed items (temporary factors) was ¥82.2億, down -3.7% from ¥85.4億 in the previous year. Thus, the increase in reported operating income was partly attributable primarily to differences in separately disclosed items versus the previous year. Finance costs of ¥86.7億 significantly exceeded finance income of ¥10.7億, with net finance costs of ¥76.0億 consuming most of operating income. Equity-method investment income of ¥12.6億 accounted for approximately 67% of profit before tax of ¥18.7億, indicating a high degree of dependence on the performance of external investees. While operating CF was negative at ¥138.6億, consolidated net income was positive at ¥1.1億, revealing a significant divergence between earnings and cash flow. This divergence is likely substantially affected by working capital and funding costs, including inventory accumulation and interest payments. When evaluating earnings quality, the status of cash conversion should therefore be reviewed together with reported profit.
Earnings Forecast and Guidance
The Q1 progress rate against the full-year forecast was 28.0% for revenue (forecast: ¥8800.0億) and 24.9% for operating income (forecast: ¥360.0億), broadly in line with a standard progress pace of approximately 25% at the operating level. In contrast, the progress rate for net income was only 2.8% (forecast: ¥40.0億), making normalization of finance costs and the tax burden in the second half of the fiscal year an important factor in assessing the achievement of the full-year forecast. The full-year forecast calls for revenue of +0.1% YoY, operating income of +24.9%, and net income of -32.1%. The current Q1 results can be viewed as progress within this range. No revisions were made to the earnings forecast or dividend forecast during the quarter.
Shareholder Returns
No dividends were paid to shareholders of the parent during Q1, and the company's full-year dividend forecast is also ¥0 per share. Accordingly, the payout ratio is calculated at 0%, and expenditure on share repurchases was effectively zero, indicating that shareholder returns are extremely limited at present. Given the current negative operating CF and free cash flow, the priority in capital allocation appears to be securing stable funding rather than resuming dividends.
Risk Factors
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Financial Leverage and Liquidity: The equity ratio is 13.4%, while current assets of ¥3382.2億 compare with current liabilities of ¥5127.5億, resulting in a current ratio below 1x. Finance costs of ¥86.7億 are almost equal to operating income of ¥88.3億, indicating limited interest coverage capacity.
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Differences in Segment Profitability: The operating margin of Automotive Glass (54% of revenue composition) has declined to 0.9%, constraining improvement in the company-wide margin. This contrasts with the higher profits generated by Building Glass and High-Performance Glass.
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Cash Generation and Inventory: Operating CF of -¥138.6億 and free CF of -¥281.6億 remain negative, and capital expenditures cannot be funded through internal resources. Inventory has accumulated to ¥1943.6億, increasing from the previous year, and its impact on liquidity management warrants close attention.
Industry Benchmark (Reference; Compiled by the Company)
Industry Benchmark (manufacturing)
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 3.6% | 8.7% (4.2%–14.3%) | −5.1pt |
| Net Profit Margin | 0.0% | 7.1% (3.2%–10.6%) | −7.1pt |
Profitability is significantly below the industry median, with both operating and net profit margins ranking at low levels within the industry.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 17.2% | 6.2% (-1.1%–14.6%) | +11.0pt |
The revenue growth rate significantly exceeds the industry median, and top-line expansion is at a high level within the industry.
※Source: Compiled by the Company
Key Points from the Financial Results
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Revenue increased across all segments and demonstrated a high growth rate within the industry. At the same time, the decline in the profit margin of Automotive Glass, the largest segment, is constraining improvement in company-wide profitability.
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Reported operating income increased, but underlying operating income excluding separately disclosed items declined YoY, while the heavy burden of finance costs and taxes prevented operating improvements from translating into net income. The financial results reveal two contrasting aspects: improvement at the operating level and fragility in net income.
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Operating CF and free CF remain negative, and the company continues to rely on borrowings and bond issuance for funding. The increase in inventory and low current ratio are key points to monitor when assessing future cash-generating capacity.
Theoretical Share Price (Reference Value)
| Scenario | Theoretical Share Price |
|---|---|
| bear (Bearish) | ¥837 |
| base (Base) | ¥843 |
| bull (Bullish) | ¥847 |
| Valuation Assumption | Value |
|---|---|
| Book Value per Share (BPS) | ¥1,061 |
| Adjusted Forecast EPS | ¥23.6 |
| Cost of Equity r | 9.77% (10-year Japanese government bond 2.77% + equity risk premium 6.00% + size premium 1.00%) |
| Residual Income Persistence Factor ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 0.0% |
| Forecast EPS Confidence Adjustment | ×1.117 (based on the track record of guidance achievement in the same industry) |
| Implied PBR / PER | 0.79x / 35.7x |
Sensitivity: ¥819–¥867 at cost of equity ±1%; ¥835–¥847 at ω±0.1.
Notes:
- Net income is substantially compressed relative to operating income due to the tax burden, acquisition-related expenses, and non-controlling interests, among other factors (net income ÷ operating income: 8%). This value reflects that compression at face value; if the factors are temporary, normalized earnings power may be higher.
- Because forecast ROE is below the cost of equity, the theoretical value is below book value per share.
- Goodwill represents a high proportion of net assets, and the assumptions would change materially if impairment were recognized.
- Net assets as of the end of the quarter are used; there is a timing difference relative to the full-year forecast.
(Model: Residual Income Model (Ohlson-type; explicit 5-year fade-out) / Interest Rate Reference Month: 2026-07 / Mechanically calculated value based solely on publicly disclosed data; this is not a forecast of the market share price or a recommendation of any specific investment action, and does not predict or guarantee future share prices)
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release 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 a professional as necessary.
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