| Metric | Current | Prior-year | YoY |
|---|---|---|---|
| Revenue | ¥192.1B | ¥183.0B | +5.0% |
| Operating Income | ¥7.1B | ¥5.6B | +26.4% |
| Ordinary Income | ¥7.7B | ¥6.0B | +28.2% |
| Net Income | ¥5.2B | ¥4.1B | +33.0% |
| ROE | 4.8% | 3.8% | - |
FY2026 Q3 results delivered revenue of ¥192.1B (YoY +¥9.1B, +5.0%), operating income of ¥7.1B (YoY +¥1.5B, +26.4%), ordinary income of ¥7.7B (YoY +¥1.7B, +28.2%), and net income of ¥5.2B (YoY +¥1.1B, +26.8%), achieving both top-line and bottom-line growth. Operating leverage materialized through revenue expansion and disciplined SG&A, lifting the operating margin to 3.7% (+0.6pt from 3.1% a year ago). At the ordinary income level, accumulation of non-operating income brought the ordinary income margin to 4.0%. The net margin was 2.7%, still low but improved YoY, and ROE rose to 4.4% (from 3.9% a year ago). Full-year guidance calls for revenue of ¥253.0B (+3.5%), operating income of ¥7.6B (+13.7%), ordinary income of ¥8.1B (+11.6%), and net income of ¥5.0B, with progress through Q3 tracking well.
[Profitability] ROE at 4.4% (+0.5pt improvement from 3.9% a year ago) is above the company’s historical level but still low; operating margin 3.7% (+0.6pt from 3.1%); net margin 2.7% (+0.5pt from 2.2%). A gross margin of 13.9% indicates structurally low levels. [Capital efficiency] Total asset turnover of 0.98x (improved from 0.95x a year ago) and financial leverage of 1.79x indicate gradual improvement in asset efficiency. [Cash quality] Cash and cash equivalents of ¥32.7B against short-term borrowings of ¥9.2B imply cash coverage of 3.6x and ample liquidity. In working capital efficiency, days sales outstanding (DSO) of 63 days, days inventory outstanding (DIO) of 107 days, and days payables outstanding (DPO) of 94 days result in a cash conversion cycle of 122 days, trending longer. [Financial soundness] Equity ratio of 56.0% (improved from 54.7%), current ratio 170.9%, and quick ratio 138.8% reflect solid short-term solvency. Interest-bearing debt is ¥11.1B, with a debt-to-equity ratio of 0.10x, indicating a conservative capital structure. Interest coverage of 78x suggests ample debt service capacity. Although the short-term debt ratio is high at 82.6%, surplus cash limits near-term refinancing risk.
Cash and cash equivalents increased by ¥3.9B YoY to ¥32.7B, presumably supported by higher operating profits. In working capital, accounts payable expanded by ¥5.1B YoY to ¥22.1B, indicating improved funding efficiency via extended payment terms and larger procurement volumes. Meanwhile, inventories were ¥15.4B (flat YoY), but DIO at 107 days is lengthy, leaving room to reduce stock. Accounts receivable and electronically recorded monetary claims totaled ¥35.0B, with DSO at 63 days, an acceptable level. Short-term borrowings declined by ¥5.1B from ¥14.3B to ¥9.2B (-35.7%), advancing the reduction of interest-bearing debt. Long-term borrowings also fell by ¥0.9B from ¥2.8B to ¥1.9B (-31.6%), confirming overall financial improvement through debt repayment. Cash coverage of short-term liabilities is 3.6x, indicating sufficient liquidity; however, the elongation of the working capital cycle is a headwind to cash efficiency and warrants attention.
Ordinary income was ¥7.7B versus operating income of ¥7.1B, implying net non-operating gains of ¥0.6B. The breakdown mainly comprises financial income such as dividend income and equity in earnings of affiliates, with non-operating income at roughly 0.3% of revenue—small in scale. Profit build at the ordinary income level is primarily driven by operating income improvement, with limited one-off factors. However, the gross margin is low at 13.9%, suggesting revenue growth likely relies on volume expansion. The operating margin of 3.7% improved YoY, but much of the effect stems from restrained SG&A growth; margin gains without gross margin improvement raise concerns about sustainability. In working capital efficiency, DIO at 107 days, DSO at 63 days, and a cash conversion cycle of 122 days indicate lengthening, pointing to a structural issue of slow cash realization of profits. While Operating Cash Flow (OCF) data is undisclosed, the increase in cash and reduction in interest-bearing debt suggest some level of cash generation.
[Position within industry] (Reference information; Our research) Profitability: ROE 4.4% (0.6pt below the industry median of 5.0%), operating margin 3.7% (4.6pt below the industry median of 8.3%), and net margin 2.7% (3.6pt below the industry median of 6.3%) indicate below-industry profitability. Efficiency: Total asset turnover of 0.98x (well above the industry median of 0.58x) indicates good asset efficiency; DIO of 107 days (roughly in line with the industry median of 109 days); DSO of 63 days (better than the industry median of 83 days, indicating faster collection); working capital cycle of 122 days (above the industry median of 108 days, slightly weaker efficiency). Soundness: Equity ratio 56.0% (7.8pt below the industry median of 63.8%), current ratio 170.9% (below the industry median of 284%), while interest-bearing debt remains low, indicating a conservative financial profile. Growth: Revenue growth rate of 5.0% (+2.3pt above the industry median of 2.7%) places growth pace in the upper tier of the industry. Industry: Manufacturing (98 companies), comparison: FY2025 Q3, source: Our aggregation
This report is an automatically generated earnings analysis prepared by AI based on XBRL financial statement data. It is not a solicitation or recommendation to invest in any specific security. The industry benchmark is reference information compiled by our firm using publicly available financial data. Investment decisions are your own responsibility; please consult a professional as needed before making any decisions.