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 of Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥2219.2B | ¥2111.9B | +5.1% |
| Operating Income | ¥114.6B | ¥100.6B | +13.9% |
| Ordinary Income | ¥123.1B | ¥99.9B | +23.2% |
| Net Income | ¥89.3B | ¥72.1B | +23.9% |
| ROE | 1.3% | 1.0% | - |
Taiheiyo Cement posted higher revenue and earnings in Q1 (April–June 2026), supported by the impact of price revisions in its core Cement Business and cost stabilization. Revenue was ¥2,219.2B (¥2,111.9B in the previous year, YoY +5.1%), Operating Income was ¥114.6B (¥100.6B, YoY +13.9%), Ordinary Income was ¥123.1B (¥99.9B, YoY +23.2%), and Net Income attributable to owners of the parent was ¥83.5B (¥68.2B, YoY +22.3%). In addition to higher revenue, improved gross margin and an increase in dividends received supported growth in Operating Income and Ordinary Income, while higher interest expenses somewhat constrained Net Income growth.
【Revenue】Revenue was ¥2,219.2B, up YoY +5.1%. The core Cement Business, which accounted for 73.8% of consolidated revenue, grew +4.8% and drove overall performance. The Environment Business increased +9.2%, while Other Businesses (including real estate and engineering) performed well, rising +9.0%. Building Materials and Civil Engineering was the only segment to record lower revenue, declining -3.2%. Resources posted a modest increase of +2.6%.
【Profit and Loss】Gross margin was 22.7%, improving from approximately 22.0% in the previous year. Operating margin improved to 5.2% (4.8% in the previous year), while Ordinary Income margin improved to 5.5% (4.7% in the previous year). In non-operating items, dividends received of ¥20.3B contributed to growth in Ordinary Income, while interest expenses increased to ¥19.3B, resulting in a higher interest burden. Extraordinary income was ¥8.2B (including ¥6.3B in gains on sales of investment securities), and extraordinary losses were ¥7.2B, resulting in a modest net gain of +¥1.0B with limited impact on Net Income. Both revenue and earnings exceeded the previous year, resulting in higher revenue and earnings.
The Cement Business generated revenue of ¥1,637.8B (YoY +4.8%, 73.8% of consolidated revenue), Operating Income of ¥59.8B (YoY +34.4%), and a margin of 3.6%. In addition to higher revenue, improved profitability made this the primary driver of consolidated earnings growth. Resources generated revenue of ¥231.0B (YoY +2.6%) and Operating Income of ¥27.3B (YoY +7.9%), maintaining the highest margin among all segments at 11.8% and supporting overall profitability. The Environment Business increased revenue to ¥208.2B (YoY +9.2%), but Operating Income declined to ¥18.7B (YoY -5.8%) as higher costs pressured profitability. Building Materials and Civil Engineering reported revenue of ¥100.9B (YoY -3.2%) and Operating Income of ¥0.9B (YoY -76.0%), representing a substantial earnings decline. Its margin also fell to 0.9%, making this the segment with the most pronounced profitability challenges. Other Businesses recorded steady growth, with revenue of ¥191.5B (YoY +9.0%) and Operating Income of ¥8.3B (YoY +12.2%).
【Profitability】Operating margin improved to 5.2% from 4.8% in the previous year. Net margin, based on Net Income attributable to owners of the parent, improved to 3.8% from 3.2%. Price revisions and cost stabilization have contributed to improved profitability across the company. 【Cash Quality】As cash flow statement data has not been disclosed, trends are analyzed from the balance sheet. Cash and deposits increased substantially year on year to ¥1,589.1B, while trade receivables of ¥1,479.7B and inventories of ¥622.0B also continued to increase, indicating an accumulation of working capital. 【Investment Efficiency】ROE was 1.3% (quarterly basis, Net Income ÷ average equity), while the Equity Ratio was 44.4%, down from approximately 48.1% in the previous year. Against total assets of ¥15,900.1B, net assets were ¥7,064.9B. As total assets increased (+7.5%), exceeding the slight decline in net assets (-0.8%), asset efficiency requires monitoring. 【Financial Soundness】The current ratio was 96.5% and the quick ratio was 84.9%, both below 1x, indicating a relatively large concentration of current liabilities, including short-term borrowings of ¥2,554.9B. Interest coverage was maintained at 5.95x based on Operating Income, indicating continued resilience to the current interest payment burden.
As cash flow statement data has not been disclosed, funding trends are analyzed based on balance sheet movements. Cash and deposits were ¥1,589.1B, increasing by +¥951.9B (+149.4%) from ¥637.2B in the previous year, resulting in a substantial buildup of liquidity at the end of the period. Meanwhile, short-term borrowings also increased to ¥2,554.9B, up +¥969.9B (+61.2%) from the previous year. It is therefore important to note that a considerable portion of the increase in cash appears to have been generated through short-term financing. Treasury stock stood at -¥315.1B, expanding by -¥100.0B from the previous year, suggesting progress in share repurchases. Trade receivables (¥1,479.7B) and inventories (¥622.0B) also increased from the previous year, and the accumulation of working capital associated with business expansion is an important factor affecting the effective flexibility of available funds.
Current-period earnings were primarily supported by substantive improvements in profitability at the Operating Income and Ordinary Income levels, while the contribution from nonrecurring factors was limited. Extraordinary income of ¥8.2B (including ¥6.3B in gains on sales of investment securities) and extraordinary losses of ¥7.2B resulted in a net gain of only +¥1.0B. This represented approximately 1.2% of Net Income attributable to owners of the parent (¥83.5B), a small contribution. Of non-operating income of ¥34.3B, dividends received were ¥20.3B, equivalent to approximately 0.9% of revenue. Although this income may be affected by market conditions, the level does not indicate excessive dependence. Meanwhile, interest expenses increased to ¥19.3B, and the increase in interest costs associated with the accumulation of interest-bearing debt emerged as a headwind at the Ordinary Income level. The gap between Operating Income (¥114.6B) and Net Income attributable to owners of the parent (¥83.5B) was primarily attributable to income taxes of ¥34.8B and Net Income attributable to non-controlling interests of ¥5.8B. No particularly abnormal adjustment items were identified.
Q1 progress against the Full-Year earnings forecast was 21.6% for Revenue (¥2,219.2B/¥10,270.0B), 15.1% for Operating Income (¥114.6B/¥760.0B), and 17.6% for Ordinary Income (¥123.1B/¥700.0B). Compared with 25%, the benchmark for simple proportional allocation, progress on the earnings side was somewhat slow. The company’s Full-Year plan assumes Revenue growth of YoY +14.3%, Operating Income growth of YoY +1.8%, and Ordinary Income decline of YoY -6.8%, representing a conservative plan for earnings growth and decline that differs from the double-digit earnings growth pace recorded in Q1. No revisions were made to the earnings forecast or dividend forecast during the quarter. Given the seasonality of the Cement Business, including construction demand weighted toward the second half, achievement of the Full-Year plan will depend on demand trends and the penetration of price revisions in the second half.
The company’s annual dividend forecast is ¥120, implying a Payout Ratio of approximately 20.9% based on forecast EPS of ¥575.14 (¥120/¥575.14). The dividend paid at the same point in the previous year was ¥50, but because the comparison period and basis may differ, the assessment is limited to the current-period forecast basis. On the balance sheet, treasury stock expanded by the equivalent of +¥100.0B from the previous year, suggesting progress in share repurchases. However, because there has been no specific disclosure regarding the amount or policy of share repurchases, the Payout Ratio is evaluated based solely on dividends.
Short-Term Liquidity Risk: The current ratio of 96.5% and quick ratio of 84.9% were both below 1x, and current liabilities, including short-term borrowings of ¥2,554.9B, represent a significant proportion of liabilities. Compared with cash and deposits of ¥1,589.1B, the financial structure shows somewhat high dependence on current liabilities.
Differences in Segment Profitability: Operating Income in Building Materials and Civil Engineering declined substantially by YoY -76.0%, while the Environment Business also reported a YoY -5.8% earnings decline. Profitability has deteriorated in certain segments other than the core Cement Business, which has a margin of 3.6%.
Business Concentration Risk: The Cement segment accounts for 73.8% of consolidated revenue and more than half of Operating Income. Consequently, supply-demand and pricing trends in this business have a relatively significant impact on consolidated performance.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 5.2% | 8.7% (4.2%–14.2%) | -3.5pt |
| Net Margin | 4.0% | 7.0% (3.2%–10.6%) | -3.0pt |
Both the company’s Operating Margin and Net Margin are below the industry median, placing its profitability at a relatively low level within the industry.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (Year on Year) | 5.1% | 6.2% (-1.1%–14.6%) | -1.2pt |
Although the Revenue Growth Rate is slightly below the industry median, it remains within the IQR range.
※Source: Compiled by the Company
Operating Income in the Cement Business increased substantially by YoY +34.4%, driving the company-wide improvement in Operating Income (YoY +13.9%). Price revisions and cost stabilization were the primary factors behind the improvement in profitability (Operating Margin of 5.2%, compared with 4.8% in the previous year). Whether this trend continues into the second half will be a key determinant of performance.
Cash and deposits increased by +149.4% from the previous year, while short-term borrowings also increased by +61.2%. The fact that the expansion of available liquidity was supported by short-term financing is an important characteristic of the financial structure to monitor.
Q1 progress against the Full-Year earnings forecast was 15.1% for Operating Income and 17.6% for Ordinary Income, both below the 25% implied by simple proportional allocation. The company’s plan is also conservative, projecting Full-Year Ordinary Income of YoY -6.8%.
This is a mechanically calculated reference range based solely on publicly available data using a residual income model (Ohlson-type model with an explicit five-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 | ¥6,408 |
| base | ¥6,603 |
| bull | ¥6,745 |
| Calculation Assumption | Value |
|---|---|
| Book Value per Share (BPS) | ¥6,484 |
| Adjusted Forecast EPS | ¥642.2 |
| Cost of Equity r | 9.27% (10-year government bond 2.77% + equity risk premium 6.00% + size premium 0.50%) |
| Residual Income Persistence Coefficient ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 20.9% |
| Forecast EPS Confidence Adjustment | ×1.117 (based on the industry’s historical guidance achievement rate) |
| Implied PBR / PER |
Sensitivity: ¥6,416–¥6,800 at Cost of Equity ±1%, and ¥6,601–¥6,608 at ω ±0.1.
Notes:
（Calculation model: Residual income model / Interest rate reference month: 2026-07 / This value does not predict or guarantee the future share price）
This report is an earnings analysis document automatically generated by AI based on XBRL earnings flash 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 responsibility, after consulting professionals as necessary.
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| 1.02x / 10.3x |