| Metric | Current Period | Same Period of Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥2037.0B | ¥1699.3B | +19.9% |
| Operating Income | ¥417.8B | ¥335.9B | +24.4% |
| Profit Before Tax | ¥1422.1B | ¥335.2B | +324.2% |
| Net Income | ¥974.1B | ¥239.1B | +307.5% |
| ROE | 11.5% | 3.1% | - |
In Q1, profitability at the operating level steadily improved owing to higher revenue and operating income in the automotive-related businesses. However, the substantial increase in net income was primarily attributable to a sharp rise in financial income related to financial assets held by the Company, and attention should be paid to its repeatability over the full year. Revenue was ¥2037.1B (+19.9% YoY), Operating Income was ¥417.8B (+24.4% YoY, operating margin of 20.5%), Profit Before Tax was ¥1422.1B (+324.2% YoY), and Net Income attributable to owners of the parent for the quarter was ¥972.7B (+307.7% YoY). The sharp expansion in Profit Before Tax was attributable to financial income increasing sharply from ¥19.7B in the same period of the previous year to ¥1019.9B, a factor distinct in nature from the growth in Operating Income.
【Revenue】Revenue was ¥2037.1B, representing a 19.9% YoY increase. By segment, the core Automotive Components segment generated ¥1640.9B (80.6% of revenue, +17.2% YoY), while Ceramics generated ¥359.7B (17.7% of revenue, +29.6% YoY), with both segments contributing to higher revenue.
【Profit and Loss】Operating Income was ¥417.8B (+24.4% YoY), and the operating margin improved to 20.5% from 19.8% in the same period of the previous year, an improvement of +0.7pt. Although the gross margin declined to 37.6% from 39.1%, a decrease of -1.4pt, the SG&A expense ratio improved from 18.8% to 17.3%, or -1.6pt, resulting in the effect of operating leverage. Profit Before Tax increased substantially to ¥1422.1B (+324.2% YoY), primarily because financial income surged from ¥19.7B to ¥1019.9B. This appears to have been driven by unrealized gains on, and gains from the sale/redemption of, financial assets held by the Company, indicating a strong one-off component. Net Income attributable to owners of the parent for the quarter was ¥972.7B (+307.7% YoY). Revenue and profit both increased.
Automotive Components recorded revenue of ¥1640.9B (+17.2% YoY), Operating Income of ¥407.5B (+22.6% YoY), and a margin of 24.8% (an improvement of +1.1pt from 23.7% in the previous year). It accounted for ¥407.5B of total segment profit of ¥421.7B and drove the majority of Company-wide profit. Ceramics recorded revenue of ¥359.7B (+29.6% YoY), Operating Income of ¥14.2B (+487.2% YoY), and a margin of 3.95% (improving from 0.87% in the previous year). Despite the substantial increase in profit, its profitability level remains low. Other segments recorded an Operating Loss of ¥3.9B, compared with Operating Income of ¥1.2B in the previous year, against revenue of ¥36.5B (+63.7% YoY). Automotive Components accounts for more than 80% of revenue, creating a structure in which supply-demand conditions and margin trends in this segment determine overall Company performance.
【Profitability】The operating margin of 20.5% improved by +0.7pt from 19.8% in the same period of the previous year, while ROE was 11.5%. The net profit margin was high at 47.8%, but this was largely attributable to the temporary boost from the sharp increase in financial income and should be distinguished from the improvement in profitability at the operating level.【Cash Quality】Operating Cash Flow (OCF) was ¥169.9B, equivalent to approximately 17% of Net Income attributable to owners of the parent of ¥972.7B, indicating a considerable gap between profit and cash generation.【Investment Efficiency】Total assets expanded to ¥1兆3285.4B from ¥1兆2211.0B at the end of the previous fiscal year, of which other financial assets (non-current) increased from ¥815.5B to ¥1759.1B.【Financial Soundness】The Equity Ratio was 63.7% (62.8% at the end of the previous fiscal year), while the current ratio was approximately 294% (current assets of ¥6670.8B/current liabilities of ¥2268.8B), indicating that the financial foundation continues to have a conservative structure.
Operating Cash Flow (OCF) was ¥169.9B, up +5.3% from ¥161.5B in the same period of the previous year. However, increases in trade receivables (-¥107.3B), inventories (-¥49.1B), and other working capital decreases (-¥982.3B) occurred concurrently, limiting cash-generation capacity relative to Profit Before Tax of ¥1422.1B. Investing Cash Flow was positive at ¥374.5B, supported by proceeds of ¥144.2B from the sale and redemption of investment securities, among other factors, while ¥133.8B was invested in capital expenditures. Financing Cash Flow was -¥348.1B, reflecting dividend payments of ¥219.0B, share repurchases of ¥114.1B, and a net decrease in long-term borrowings (-¥401.0B). Free Cash Flow (OCF + Investing Cash Flow) was secured at ¥544.5B, exceeding the combined level of total shareholder returns of ¥333.2B and capital expenditures of ¥133.8B. Cash and cash equivalents increased to ¥2120.5B from ¥1877.5B at the end of the previous fiscal year.
Of Profit Before Tax of ¥1422.1B for the current period, Operating Income, which indicates recurring earnings power, was only ¥417.8B, with most of the remainder attributable to the recognition of financial income of ¥1019.9B. Financial income increased substantially from ¥19.7B in the same period of the previous year and is believed to include unrealized gains on, and gains from the sale and redemption of, financial assets held by the Company. Its nature differs from recurring earnings based on operating activities. Comprehensive Income was ¥1127.1B (¥1124.6B attributable to owners of the parent), exceeding Net Income attributable to owners of the parent of ¥972.7B by ¥151.9B. Valuation differences on other securities (+¥68.4B) and foreign currency translation adjustments of foreign operations (+¥84.2B) were recorded as other comprehensive income. The fact that OCF remained low relative to net income suggests that the cash backing of current-period profit was relatively weak.
Progress against the full-year plan was 25.8% for Revenue (¥2037.1B/¥7900.0B) and 27.9% for Operating Income (¥417.8B/¥1500.0B), slightly ahead of the simple progress benchmark of 25%. Meanwhile, Net Income attributable to owners of the parent reached 92.6% (¥972.7B/¥1050.0B), meaning that most of the full-year forecast had already been achieved as of Q1. This was largely attributable to the temporary boost from financial income, and the earnings forecast has not been revised. In addition, a share split with September 30, 2026 as the record date was approved, and the full-year EPS forecast of ¥267.50 is stated after taking the impact of the split into account.
Dividend payments during Q1 were ¥219.0B, resulting in a Payout Ratio of 22.5% relative to Net Income attributable to owners of the parent of ¥972.7B. Share repurchases of ¥114.1B were conducted, bringing total shareholder returns, including dividends, to ¥333.2B and the Total Return Ratio to 34.3%. Free Cash Flow of ¥544.5B exceeded the amount of shareholder returns, indicating that funding for returns has been secured. In addition, a two-for-one share split of common shares, with September 30, 2026 as the record date, was approved. The dividend forecast for the fiscal year ending March 2027 is disclosed after taking the impact of the split into account (the annual dividend without considering the split would be ¥210.00).
Business concentration risk: The Automotive Components segment accounts for 80.6% of revenue, creating a structure in which production trends at automotive OEMs and changes in model mix could have a significant impact on overall performance.
Volatility due to reliance on financial income: Financial income accounted for ¥1019.9B of Profit Before Tax of ¥1422.1B, increasing sharply from ¥19.7B in the same period of the previous year. Other financial assets (non-current) also increased from ¥815.5B to ¥1759.1B, and fluctuations in market prices could affect the P&L and equity.
Increase in working capital and cash-generation capacity: OCF remained at ¥169.9B, representing a significant gap relative to Net Income attributable to owners of the parent of ¥972.7B. If increases in trade receivables (+¥107.3B) and inventories (+¥49.1B) continue, the working capital burden could expand further going forward.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 20.5% | 8.8% (4.3%–14.4%) | +11.7pt |
| Net Profit Margin | 47.8% | 7.3% (3.3%–10.6%) | +40.6pt |
| The Company's operating margin and net profit margin both significantly exceed the industry median. However, it should be noted that the deviation in the net profit margin reflects the temporary contribution of financial income. |
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 19.9% | 6.6% (-0.5%–14.7%) | +13.3pt |
| The Revenue Growth Rate is above both the industry median and the upper quartile (14.7%). |
※Source: Compiled by the Company
The improvement in the operating margin to 20.5% from 19.8% in the previous year resulted from the increase in the Automotive Components margin (23.7%→24.8%) and the decline in the SG&A expense ratio (18.8%→17.3%). Structural factors are included in the improvement in earnings power at the operating level.
Most of Net Income of ¥972.7B (+307.7% YoY) was attributable to the sharp increase in financial income of ¥1019.9B. Attention should be paid to the fact that the high full-year progress rate of 92.6% reflects a one-off contribution from non-operating factors.
The fact that OCF remained low relative to net income (approximately 17%) provides a basis for monitoring future trends from the perspective of the speed at which profit is converted into cash.
This is a reference range mechanically calculated solely from publicly disclosed data using a residual income model (Ohlson type, explicit 5-year fade). It is not a forecast of the market stock price or a recommendation of any specific investment action.
| Scenario | Theoretical Stock Price |
|---|---|
| bear | ¥3,976 |
| base | ¥4,062 |
| bull | ¥4,124 |
| Calculation Assumption | Value |
|---|---|
| Book Value Per Share (BPS) | ¥4,341 |
| Adjusted Forecast EPS | ¥298.7 |
| Cost of Equity r | 9.15% (10-year government bond 2.65% + equity risk premium 6.00% + size premium 0.50%) |
| Residual Income Persistence Factor ω / Explicit Forecast | 0.62 / 5 years |
| Assumed Payout Ratio | 30.0% |
| Forecast EPS Confidence Adjustment | ×1.117 (based on the industry's historical guidance achievement rate) |
| implied PBR / PER | 0.94x / 13.6x |
Sensitivity: ¥3,949–¥4,181 at ±1% for the cost of equity, and ¥4,053–¥4,069 at ±0.1 for ω.
Notes:
(Calculation model: Residual Income Model / Interest Rate Reference Month: 2026-06 / This value is not a forecast or guarantee of the future stock price)
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 issue. 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 a professional as necessary.
---End of Report---
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.