| Metric | Current Period | Prior Year | YoY |
|---|---|---|---|
| Revenue | ¥131.1B | ¥123.8B | +5.9% |
| Operating Income | ¥15.8B | ¥13.9B | +13.9% |
| Ordinary Income | ¥16.8B | ¥14.5B | +15.9% |
| Net Income | ¥12.0B | ¥10.4B | +15.5% |
| ROE | 6.3% | 5.8% | - |
For FY2025 full year, Revenue was ¥131.1B (YoY +¥7.3B, +5.9%), Operating Income was ¥15.8B (YoY +¥1.9B, +13.9%), Ordinary Income was ¥16.8B (YoY +¥2.3B, +15.9%), and Net Income was ¥12.0B (YoY +¥1.6B, +15.5%), resulting in higher revenue and higher profit. The Operating Margin was 12.1%, improving by +90bp from 11.2% in the prior year, demonstrating an earnings structure where operating leverage works with revenue expansion. By region, Japan generated revenue of 104.7B yen, accounting for about 80% of the total, and recorded Operating Income of 12.7B yen. China contributed revenue of 20.9B yen with Operating Income of 1.1B yen; the U.S. posted revenue of 16.6B yen with Operating Income of 0.2B yen; and Singapore contributed revenue of 5.7B yen with Operating Income of 0.4B yen. The company’s full-year guidance calls for revenue of 132.0B yen (+0.6%), Operating Income of 14.8B yen (-6.4%), and Net Income of 11.8B yen (-1.7%), indicating a slight decline in profit.
[Profitability] Operating Margin 12.1% (+90bp from 11.2% in the prior year), Net Margin 9.2% (+80bp from 8.4% in the prior year), ROE 6.3% (improved from 5.8% in the prior year), and a high Gross Margin of 42.4%. EBITDA was 18.1B yen with an EBITDA margin of 13.8%. [Cash Quality] Cash and equivalents of 92.7B yen (44.0% of total assets), Operating CF/Net Income ratio of 1.47x indicating strong cash conversion of earnings. Operating CF was 17.6B yen, Investing CF was -36.1B yen, and Free CF was -18.5B yen, with the large negative Investing CF being the main cause of cash outflows. [Investment Efficiency] Total Asset Turnover of 0.622x; in the DuPont decomposition, Net Margin 9.2% × Total Asset Turnover 0.622 × Financial Leverage 1.11 = ROE 6.3%. The Capex/Depreciation ratio was 0.34x, with depreciation of 2.3B yen versus capex of 0.8B yen. [Financial Soundness] Equity Ratio 90.4% (-120bp from 91.6% in the prior year), Current Ratio 831.6%, and Debt-to-Equity ratio 0.11x, indicating an extremely conservative stance. Investment Securities were 24.1B yen (+229.8% from 7.3B yen in the prior year), and Fixed Assets were 65.6B yen (+121.5% from 29.6B yen in the prior year), reflecting significant investments.
Operating CF was 17.6B yen, 1.47x Net Income of 12.0B yen, confirming cash backing for earnings. The accrual ratio was -2.7%, indicating high quality of revenue recognition. Investing CF was -36.1B yen, mainly due to Acquisition of securities -149.4B yen, changes in time deposits 113.4B yen, and acquisition of fixed assets 0.8B yen. There was a large capital shift between Investment Securities and time deposits. Financing CF was -4.2B yen, mainly due to dividend payments of 3.9B yen. Share buybacks were virtually none. Free CF was -18.5B yen, with cash outflows from investing activities exceeding Operating CF; however, cash on hand of 92.7B yen accounts for 44.0% of total assets, indicating extremely robust liquidity. Cash and deposits decreased by -4.9B yen YoY but maintained 5.4x coverage against short-term liabilities of 17.0B yen.
Ordinary Income was 16.8B yen versus Operating Income of 15.8B yen, with net non-operating gains of approximately 1.0B yen. The breakdown was non-operating income of 1.9B yen (interest received 0.2B yen, dividends received 0.3B yen, foreign exchange gains 0.5B yen, etc.) minus non-operating expenses of 0.9B yen (interest expense, etc.). Non-operating income amounted to only 1.5% of revenue, and the majority of profit was derived from core operations. Operating CF exceeded Net Income (1.47x), and cash collection supports the recognition of earnings. Inventories were 28.8B yen, roughly flat YoY; accounts receivable were 12.9B yen, a low 9.8% of revenue, indicating no excessive buildup of trade receivables. The accrual ratio of -2.7% suggests conservative revenue recognition. However, the company’s guidance for a decline in next-period Operating Income indicates limits to the sustainability of the current profit level.
[Position within the industry] (Reference information, our research) In evaluating profitability and financial metrics within the electrical equipment industry, the Operating Margin of 12.1% is on an improving trend versus the company’s past performance, and the Net Margin of 9.2% is the highest level in the past five periods. The Equity Ratio of 90.4% is extremely conservative even within the industry, significantly exceeding the industry norm of 60-70%. Revenue growth of +5.9% was solid in FY2025 results, but the company forecasts a deceleration to +0.6% next period. ROE of 6.3% exceeds the company’s past three-year average but remains low versus the industry norm of 8-12%, due to a high Equity Ratio and limited use of leverage. In investment efficiency, the Total Asset Turnover of 0.622x is in line with standard manufacturing levels. Due to a limited set of benchmark companies, we do not provide a detailed comparison to industry medians; the company’s characteristics lie in a conservative management style featuring high profitability, high financial soundness, and low leverage. (Industry: Electrical Equipment; Source: our aggregation)
This report is an earnings analysis document automatically generated by AI based on XBRL financial statement data. It is not a recommendation to invest in any particular security. The industry benchmark is reference information compiled by our company based on publicly available financial statement data. Investment decisions are your own responsibility; consult a professional as needed before making any investment decisions.