| Metric | Current Period | Prior-year Period | YoY |
|---|---|---|---|
| Revenue | ¥172.9B | ¥179.6B | -3.7% |
| Operating Income | ¥21.9B | ¥31.0B | -29.2% |
| Ordinary Income | ¥23.0B | ¥31.3B | -26.3% |
| Net Income | ¥15.4B | ¥20.4B | -25.4% |
| ROE | 5.3% | 7.4% | - |
FY2026 Q3 results landed with lower revenue and earnings: Revenue ¥172.9B (YoY -¥6.7B, -3.7%), Operating Income ¥21.9B (YoY -¥9.1B, -29.2%), Ordinary Income ¥23.0B (YoY -¥8.3B, -26.3%), and Net Income attributable to owners of the parent ¥15.4B (YoY -¥5.0B, -24.5%). The Real Estate Development Business is the core segment with Revenue of ¥111.9B and Operating Income of ¥18.8B. Total assets increased to ¥484.7B (YoY +¥41.6B), and Net assets rose to ¥288.6B (YoY +¥11.8B). Full-year guidance calls for Revenue of ¥300.0B (+9.2% YoY), Operating Income of ¥50.0B (+6.9% YoY), and Net Income of ¥32.0B.
[Profitability] ROE 5.2% (declined YoY, materially below the industry median of 11.0%), Net Profit Margin 8.9% (above the industry median of 5.0%), Operating Margin 12.7% (down -4.6pt from 17.3% in the prior-year period, above the industry median of 8.5%). EBIT margin is equivalent to 12.7%, and interest coverage is about 22.0x, indicating adequate debt service capacity. Effective tax rate 33.3%. [Cash Quality] Cash and cash equivalents ¥20.3B (down -42.3% from ¥35.2B in the prior year), cash-to-short-term liabilities coverage at 0.13x indicates emerging liquidity stress. Non-operating income includes one-off elements: Gain on sale of marketable securities of ¥1.1B and Dividend income of ¥0.9B. [Investment Efficiency] Total asset turnover 0.357x (low asset efficiency), Return on Assets (ROA) 3.2% (below the industry median of 3.6%), and ROIC 3.4% warrant caution regarding cost-of-capital coverage. [Financial Soundness] Equity Ratio not available due to insufficient data; Debt-to-Equity ratio 0.68x; Debt-to-Capital ratio 35.2%. The Current Ratio is 229.7%, a healthy headline indicator, but Short-term borrowings of ¥152.2B (up +107.8% from ¥73.2B in the prior year) and a short-term liabilities ratio of 96.9% indicate extremely high reliance on short-term funding. Real estate for sale of ¥383.6B accounts for 79.1% of total assets, making inventory liquidation the top priority.
Operating Cash Flow (OCF) data has not been disclosed, but analysis of balance sheet trends indicates tightening liquidity: Cash and deposits decreased from ¥35.2B to ¥20.3B (-¥14.9B, -42.3%), signaling clear signs of cash strain. Short-term borrowings surged from ¥73.2B to ¥152.2B (+¥79.0B, +107.8%), increasing reliance on external financing. Within working capital, Accounts payable declined sharply from ¥46.8B to ¥6.5B (-¥40.3B, -86.2%), suggesting increased short-term funding needs due to changes in payment terms or accelerated payments to suppliers. Meanwhile, Accounts receivable rose from ¥10.1B to ¥13.3B (+¥3.2B, +31.3%), implying extended collection periods or changed sales terms. Real estate for sale remained roughly flat YoY, indicating stalled inventory liquidation, which has hindered cash generation. The cash-to-short-term liabilities ratio is an extremely low 0.13x, implying a capital structure predicated on rolling over short-term borrowings, with refinancing risk becoming apparent.
Against Ordinary Income of ¥23.0B and Operating Income of ¥21.9B, net non-operating gains were approximately ¥1.1B. The main components of non-operating income were a ¥1.1B gain on sale of marketable securities and ¥0.9B in dividend income, indicating financial one-off elements partly supported earnings. Total non-operating income of ¥2.1B accounts for 1.2% of revenue. Operating margin declined by -4.6pt to 12.7% from 17.3% in the prior-year period, suggesting deterioration in cost of sales or a change in sales mix (increase in low-margin projects). As OCF data is not disclosed, the cash backing of operating profit cannot be directly verified; however, the decline in cash and the surge in short-term borrowings indicate a high likelihood that cash generation has not kept pace with reported profits, raising concerns about earnings quality. Interest coverage is about 22.0x, and the interest burden is currently light.
[Position within Industry] (Reference information; our survey) Comparison of financial indicators within the real estate industry (FY2025 Q3; industry medians aggregated from 14 companies with disclosed historical Q3 results). Profitability: ROE 5.2% is well below the industry median of 11.0% (IQR: 3.6%–20.5%), placing the company at a low level within the industry. Operating margin 12.7% exceeds the industry median of 8.5% (IQR: 2.9%–11.0%), indicating maintained efficiency. Net profit margin 8.9% is above the industry median of 5.0% (IQR: 1.7%–7.1%). Soundness: Current Ratio 2.30x is in line with the industry median of 2.21x (IQR: 1.95x–3.46x), but the low cash-to-short-term liabilities of 0.13x indicates a substantive liquidity risk. Equity Ratio data is unavailable, but the Debt-to-Equity ratio of 0.68x and Debt-to-Capital ratio of 35.2% are estimated to be mid-range within the industry. Net Debt/EBITDA is not available. Efficiency: ROA 3.2% is slightly below the industry median of 3.6% (IQR: 1.0%–6.0%), driven by weaker inventory efficiency. Revenue growth rate of -3.7% is significantly below the industry median of +13.5% (IQR: +2.9%–+51.3%), highlighting a pronounced revenue decline. In industry comparison, weak profitability and slowing growth emerge as key issues (Source: Our aggregation based on publicly disclosed FY2025 Q3 financial data).
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not constitute a recommendation to invest in any specific security. The industry benchmark is reference information aggregated by our firm based on publicly available financial statements. Investment decisions are your own responsibility; consult a professional as necessary before making any investment decisions.