ASIA PILE HOLDINGS CORPORATION FY2027 Q1 Earnings Report

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Executive Summary

The first quarter of FY2027 delivered higher revenue and earnings, representing a high-quality set of results accompanied by an improvement in gross margin. Revenue was ¥299.7B (+9.5% year on year), Operating Income was ¥32.7B (+14.4%), Ordinary Income was ¥33.9B (+15.2%), and net income attributable to owners of the parent was ¥25.6B (+28.1%). The gross margin improved to 21.7% from the previous year, absorbing the increase in the SG&A ratio (10.8%) and resulting in an Operating Income margin of 10.9% (+47bp). The earnings growth was driven by the combination of stable growth in Domestic and high growth and improved profitability in Overseas.

Factors Affecting Results

【Revenue】Revenue was ¥299.7B (+9.5% year on year), with both segments reporting higher revenue: Domestic (¥245.1B, +6.2%, 81.7% of total) and Overseas (¥56.4B, +31.5%, 18.3% of total). The high growth of Overseas lifted the overall growth rate.

【Profit and Loss】Operating Income was ¥32.7B (+14.4%), as the gross margin improved to 21.7% from 20.4% in the previous year, enabling profit to grow faster than the increase in the SG&A ratio (10.8%, compared with 10.0% in the previous year). Ordinary Income was ¥33.9B (+15.2%), supported by equity-method income/loss (+¥1.0B) and non-operating income. Quarterly net income was ¥25.6B (+28.1%), with the lower tax burden ratio (effective tax rate of 19.1%) further boosting the earnings growth rate. Revenue and earnings both increased.

Segment Analysis

Domestic recorded revenue of ¥245.1B (+6.2%), Operating Income of ¥27.7B (+8.1%), and a profit margin of 11.3%, continuing its stable growth as the core business. Overseas recorded revenue of ¥56.4B (+31.5%), Operating Income of ¥6.6B (+128.3%), and a profit margin of 11.7%, demonstrating high growth and improved profitability and surpassing Domestic’s profit margin. The doubling of Overseas profit made a significant contribution to the increase in company-wide earnings, while progress in regional diversification is enhancing the quality of earnings.

Key Financial Indicators

【Profitability】The Operating Income margin improved to 10.9% from 10.4% in the previous year, while the net profit margin was 9.2%; both improved at a faster pace than revenue growth. 【Cash Quality】Trade receivables and notes receivable were ¥247.3B, and inventories were ¥68.4B, indicating a structure with substantial working capital relative to the growth in Operating Income. 【Investment Efficiency】ROE was 4.7%, with the low total asset turnover ratio restraining the ROE level. The Equity Ratio of 55.8% indicates a high level of financial soundness, while there remains room for improvement in capital efficiency. 【Financial Soundness】The Equity Ratio was 55.8% and cash and deposits were ¥247.5B, indicating ample liquidity. Long-term borrowings were ¥29.0B, and interest-bearing debt remained contained, placing financial security at a high level.

Cash Flow Analysis

As detailed disclosure of the statement of cash flows is not available, an assessment of fund movements based on changes in the balance sheet indicates that cash and deposits were ¥247.5B, a slight decrease from ¥256.3B in the previous year. Trade receivables and notes receivable decreased to ¥247.3B from ¥295.5B in the previous year, while contract liabilities (advance payments received) declined substantially to ¥12.4B from ¥23.3B, indicating reduced reliance on advance payments. Inventories were ¥68.4B, down from ¥74.2B in the previous year, although there appears to be an increasing trend in costs on uncompleted construction contracts, generating working capital requirements associated with project preparation. Retained earnings accumulated to ¥350.3B as revenue increased, indicating continued internal accumulation of earnings.

Quality of Earnings

Both extraordinary income and extraordinary losses were minimal at ¥0.04B, and nearly all of the current quarter’s profit consisted of recurring income generated by operating activities. Non-operating income was ¥3.1B, comprising dividends received of ¥0.7B, interest received of ¥0.7B, foreign exchange gains of ¥0.2B, and other income of ¥0.4B, representing a diversified composition with limited reliance on a single factor. Non-operating expenses were ¥1.9B, primarily consisting of ¥1.7B in interest expenses, although the burden relative to Ordinary Income was limited. Against Ordinary Income of ¥33.9B, net income attributable to owners of the parent was ¥25.6B. The primary factors behind the difference were income taxes of ¥6.5B (equivalent to an effective tax rate of 19.1%) and net income attributable to non-controlling interests of ¥1.8B, representing a structurally explainable gap. Comprehensive income was ¥34.2B, exceeding net income, with valuation differences on securities of ¥5.7B and foreign currency translation adjustments of ¥0.9B added as other comprehensive income.

Earnings Forecast and Guidance

The full-year plan calls for revenue of ¥1200.0B (+3.5% year on year), Operating Income of ¥112.0B (+2.9%), and Ordinary Income of ¥112.0B (+3.1%). The revenue progress rate for the current quarter was 25.0%, a standard level. Meanwhile, Operating Income progress was 29.2% and net income progress was 33.3% (¥25.6B against the net income forecast of ¥77.0B), both exceeding the standard progress rate of 25%, indicating that first-half profitability is progressing at a pace above plan. As of the current quarter, no revisions have been made to the earnings forecast or dividend forecast.

Shareholder Returns

The annual dividend forecast announced by the Company is ¥70 per share, representing a planned increase from the previous year’s annual dividend of ¥24 (based on the interim results and other references). The Payout Ratio against the full-year EPS forecast of ¥202.16 is approximately 34.6%. In light of the financial base comprising cash and deposits of ¥247.5B and an Equity Ratio of 55.8%, a buffer supporting dividend sustainability has been secured. No data regarding share repurchases has been disclosed, and shareholder returns are currently positioned as being centered on dividends.

Risk Factors

1. Working capital accumulation risk: Trade receivables and notes receivable of ¥247.3B and inventories of ¥68.4B are high relative to revenue. If the normalization of collections and inventories is delayed, this could affect liquidity management and cash-generation capacity.

2. Short-term funding composition risk: The relative proportion of short-term liabilities is high, including short-term borrowings of ¥102.9B and long-term borrowings due within one year of ¥18.2B, creating sensitivity to changes in interest-rate conditions and refinancing terms.

3. Operational risk accompanying rapid overseas business growth: Overseas is expanding rapidly, with revenue up +31.5% and Operating Income up +128.3%; monitoring of execution capabilities and governance in relation to the pace of growth will be important.

Industry Benchmark (For Reference; Compiled by the Company)

Industry Benchmark (manufacturing)

Profitability and Returns

Both the Operating Income margin and net profit margin exceed the industry median, placing profitability in the upper tier of the industry.

Growth and Capital Efficiency

The revenue growth rate also exceeds the median, positioning the Company among the higher-growth companies in the industry.

Source: Compiled by the Company

Key Points from the Financial Results

1. In addition to higher revenue and earnings, the gross margin and Operating Income margin improved from the previous year. The improvement in Overseas’ profit margin (11.7%) can be observed as a structural change that is driving company-wide profitability.

2. Earnings progress was 29.2% for Operating Income and 33.3% for net income, exceeding the revenue progress rate of 25.0%. This indicates that first-half profitability is running ahead of the full-year plan.

3. Contract liabilities (advance payments received) were ¥12.4B, down from ¥23.3B in the previous year. The reduced reliance on an advance-payment-based funding structure will be an important point to monitor in tracking future orders and project progress.

Theoretical Share Price (Reference Value)

Sensitivity: ¥1,699–¥1,799 for a ±1% change in the cost of equity, and ¥1,742–¥1,756 for a ±0.1 change in ω.

Notes:

• Net assets as of the end of the quarter are used (there is a timing difference relative to the full-year forecast).
• As net assets include non-controlling interests, the theoretical value may be calculated somewhat higher.

(Calculation model: Residual Income Model (Ohlson-type; explicit 5-year fade) / 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 the future share price.)

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This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary 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 where necessary.

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