| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥759.4B | ¥780.1B | -2.7% |
| Operating Income / Operating Profit | ¥29.0B | ¥27.9B | +4.1% |
| Ordinary Income | ¥28.4B | ¥24.6B | +15.3% |
| Net Income / Net Profit | ¥27.4B | ¥19.4B | +40.9% |
| ROE | 1.4% | 1.0% | - |
For FY2026 Q1, Revenue was ¥759.4B (YoY -¥20.7B -2.7%), Operating Income was ¥29.0B (YoY +¥1.1B +4.1%), Ordinary Income was ¥28.4B (YoY +¥3.8B +15.3%), and Quarterly Net Income attributable to owners of the parent was ¥27.1B (YoY +¥7.6B +40.9%). The core Die-casting segment drove the company with both revenue and profit growth, while a sharp decline in Printing Equipment (-45.7%) weighed on consolidated sales. Operating margin improved to 3.8% (up 0.2pt from 3.6% in the prior-year quarter), achieving higher profit despite lower sales due to SG&A reductions. Net income rose significantly thanks to a special gain on sale of investment securities of ¥10.2B. Operating Cash Flow was ¥7.0B (substantial improvement from -¥40.8B in the prior-year quarter), but deterioration in working capital kept cash generation low relative to net income, and Free Cash Flow was -¥15.2B.
[Revenue] Revenue of ¥759.4B (YoY -2.7%) reflects offsetting movements: the core Die-casting business increased to ¥693.4B (+2.2%), while Printing Equipment plunged to ¥40.1B (-45.7%) and Housing & Power Tools modestly declined to ¥25.6B (-6.4%), resulting in a slight consolidated revenue decline. Die-casting benefited from recovering automotive demand and margin improvements, accounting for an overwhelming 91.3% of segment revenue composition. Printing Equipment nearly halved year-on-year due to the trough in the investment cycle and order reductions, subtracting roughly 3.0pts from consolidated growth. Housing & Power Tools showed a modest decline due to weaker demand. Gross margin remained flat at 11.8% (down 0.1pt from 11.9% prior year), reflecting a continued high cost structure with cost of sales at 88.2%.
[Profitability] Operating Income of ¥29.0B (YoY +4.1%) improved despite lower sales due to SG&A cost reductions. SG&A totaled ¥60.6B, down -6.9% from ¥65.1B a year earlier, improving SG&A-to-sales ratio to 8.0% (down 0.4pt from 8.3%). By segment, Die-casting Operating Income was ¥29.1B (+29.6%, margin 4.2%) and drove consolidated profit; Printing Equipment was ¥0.6B (-89.9%, margin 1.5%); Housing & Power Tools recorded an operating loss of ¥0.5B (worsened from -¥0.3B). Ordinary Income of ¥28.4B (+15.3%) was supported by improvements in non-operating expenses, which declined to ¥5.0B from ¥8.0B a year earlier. Non-operating items included foreign exchange losses of ¥3.8B and interest paid of ¥3.9B, with FX losses restrained at the same level as the prior year. Special gains totaled ¥10.5B, mainly from sale of investment securities of ¥10.2B; special losses were ¥1.3B including valuation losses on investment securities of ¥1.2B, resulting in Net Income of ¥27.4B (+40.9%). Effective tax rate rose to 27.1% (from 21.7%), but pre-tax profit increased to ¥37.6B (+51.3%), securing the net profit improvement. In summary, the company achieved higher profit on lower sales through cost management and one-off gains.
The Die-casting segment posted Revenue of ¥693.4B (YoY +2.2%) and Operating Income of ¥29.1B (YoY +29.6%), with margin improving to 4.2% (up 0.9pt from 3.3%), driven by recovery in automotive demand, mix improvement, and cost reductions. It solidified its position as the core business, accounting for 100.4% of consolidated operating income. Printing Equipment recorded Revenue of ¥40.1B (-45.7%) and Operating Income of ¥0.6B (-89.9%), with margin falling to 1.5% (down 6.4pt from 7.9%), as the decline in capex demand and orders limited profitability. Housing & Power Tools had Revenue of ¥25.6B (-6.4%) and an operating loss of ¥0.5B (worsened from -¥0.3B), showing continued structural low profitability. Other segments (insurance agency, golf course) remained small with Revenue of ¥0.4B and Operating Loss of ¥0.2B. The business remains highly dependent on Die-casting while weak profitability in Printing Equipment and Housing & Tools undermines portfolio diversification.
[Profitability] Operating margin was 3.8% (up 0.2pt from 3.6% prior-year quarter), and Net Profit Margin was 3.6% (up 1.1pt from 2.5%), supported by cost control and one-offs. Gross margin is low at 11.8%, indicating scope for cost structure improvement. [Cash Quality] Operating Cash Flow was ¥7.0B, yielding an operating CF / Net Income ratio of 0.26x and indicating weak cash realization of earnings. Deterioration in working capital (inventory increase -¥21.7B, trade payables decrease -¥34.2B) drove cash outflows. Capital expenditure was ¥38.1B, below depreciation of ¥48.7B, giving Capex / Depreciation of 0.78x, a conservative level. Free Cash Flow was -¥15.2B, and dividend payments of ¥15.5B were not covered by internal funds. [Investment Efficiency] ROE was 1.4% (an annualized reference based on quarterly net income ¥27.4B×4 ÷ ending shareholders’ equity ¥1,928.5B) and remains low, with weak profitability and asset efficiency suppressing capital efficiency. Total asset turnover was 0.22x (annualized 0.89x), sluggish. [Financial Soundness] Equity Ratio was 56.5% (improved 1.3pt from 55.2%), which is healthy. Current Ratio was 177% (current assets ¥1,645.7B ÷ current liabilities ¥928.1B) and Quick Ratio was 151%, indicating sufficient liquidity. Interest-bearing debt totaled ¥660.0B (short-term borrowings ¥320.6B, long-term borrowings ¥339.4B), yielding a Debt/EBITDA of approximately 8.5x on an annualized basis (¥660.0B ÷ (EBITDA 29.0+48.7=77.7B ×4 = ¥310.8B)), which is high. Short-term debt ratio relative to cash and deposits is 49% (cash & deposits ¥274.7B), so attention to short-term refinancing risk is required. Interest coverage is 7.4x (Operating Income ¥29.0B ÷ interest paid ¥3.9B), indicating interest burden is manageable, but weak cash generation reduces leverage tolerance.
Operating Cash Flow was ¥7.0B (a large improvement from -¥40.8B in the prior-year quarter) but remained low at 0.26x of Net Income ¥27.4B. Operating CF before working capital changes totaled ¥17.7B, from which inventory increase -¥21.7B, accounts receivable decrease +¥7.0B, accounts payable decrease -¥34.2B, and corporate tax payments -¥6.7B were deducted. Inventory build-up and early payment of payables caused cash outflows and worsened the cash conversion cycle. Investing Cash Flow was -¥22.2B, driven mainly by Capex of -¥38.1B, partially offset by proceeds from sale of investment securities of ¥13.4B. Free Cash Flow was Operating CF ¥7.0B + Investing CF -¥22.2B = -¥15.2B, and combined with dividend payments of ¥15.5B resulted in reliance on external funding. Financing Cash Flow was -¥24.8B, primarily due to net increase in short-term borrowings +¥23.6B, repayment of long-term borrowings -¥30.7B, and dividend payments -¥15.5B. Cash and deposits at period-end were ¥274.7B, down ¥36.9B from ¥311.5B a year earlier, making improvement in working capital management an urgent priority.
Operating Income of ¥29.0B reflects recurring earning power, and after net non-operating items of -¥0.6B, Ordinary Income was ¥28.4B. Non-operating income included interest and dividend income ¥0.5B and foreign exchange gains ¥0.1B (total non-operating income ¥4.4B), while expenses included interest paid ¥3.9B and foreign exchange losses ¥3.8B (total non-operating expense ¥5.0B), indicating financial costs and FX volatility are modest headwinds. Extraordinary items recorded net +¥9.2B, comprised of special gains ¥10.5B (mainly ¥10.2B gain on sale of investment securities) less special losses ¥1.3B (including valuation losses on investment securities ¥1.2B). Consequently, about 24% of pre-tax profit ¥37.6B is attributable to one-off items, and the sustainability of Net Income ¥27.4B should be assessed against Ordinary Income ¥28.4B. The fact that Operating CF ¥7.0B is far below Net Income ¥27.4B is a red flag regarding accrual quality, with inventory and payable movements impeding cash realization of profits. Comprehensive income was ¥50.3B (¥50.6B attributable to owners of the parent), significantly exceeding net income, largely due to a positive foreign currency translation adjustment of ¥26.1B reflecting improved FX valuation of overseas operations.
Full Year / FY guidance was maintained: Revenue ¥3,130.0B (YoY +1.3%), Operating Income ¥128.0B (YoY +1.1%), Ordinary Income ¥133.0B (YoY -9.0%), and Net Income attributable to owners of the parent ¥115.0B. Q1 progress rates are Revenue 24.3%, Operating Income 22.7%, Ordinary Income 21.4%, Net Income 23.5%, which are generally close to the standard 25% pace. However, Q1 Net Income benefited from the investment securities sale gain of ¥10.2B; if a comparable one-off gain is not realized in H2, achieving the full-year target will require accumulation of core earnings. Operating Income progress is slightly lagging (22.7%), so maintaining Die-casting profitability, improving earnings in Printing Equipment and Housing & Tools, and normalizing working capital to improve cash flow will be key to meeting full-year targets. Dividend guidance remains unchanged at ¥52 per share (Q1-end actual ¥25).
A dividend of ¥25 per share was paid at Q1-end, and full-year guidance remains ¥52 per share (up ¥2 from ¥50 prior year). Total dividend payout for Q1 was ¥15.5B, implying a payout ratio of about 57% against Net Income ¥27.4B. Based on full-year EPS forecast of ¥361.53, the planned dividend of ¥52 implies a payout ratio of 14.4%; the high Q1 payout ratio appears due to front-loading of the quarterly dividend. Cash and deposits are ample at ¥274.7B, but Free Cash Flow of -¥15.2B and inability to cover dividend payments with internal funds mean that working capital improvement and recovery in cash generation are prerequisites for dividend sustainability. No share buyback was confirmed; shareholder returns are concentrated on dividends.
Segment Concentration Risk: Die-casting accounts for 91.3% of revenue and over 100% of operating income, creating extreme concentration and high sensitivity to automotive production trends, model cycles, and customer policy changes. With Printing Equipment plunging -45.7% and Housing & Tools remaining loss-making, portfolio diversification is weakened and there is limited shock absorption if the core business falters.
Working Capital & Cash Conversion Risk: In Q1, working capital deteriorated significantly with inventory increase -¥21.7B and accounts payable decrease -¥34.2B, resulting in an Operating CF / Net Income ratio of 0.26x and weak earnings-to-cash conversion. Free CF of -¥15.2B means dividends and capex are not funded internally, and short-term debt ratio of 49% and cash/short-term debt of 0.86x increase reliance on short-term refinancing. Prolonged delays in inventory reduction or receivables collection could tighten liquidity and raise financing costs.
Low Profitability & Leverage Sensitivity Risk: With gross margin 11.8%, operating margin 3.8%, and ROE 1.4%, the company exhibits structurally low profitability, and Debt/EBITDA of about 8.5x (annualized) indicates high leverage relative to cash generation. In a rising-rate or demand downturn scenario, interest burden and debt ratios could constrain financial flexibility. Low ROIC (Operating Income ¥29.0B ÷ Total Assets ¥3,411.5B = annualized roughly 3.4%) suppresses capital efficiency and could lead to valuation discounting.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Income Margin | 3.8% | 6.8% (2.9%–9.0%) | -3.0pt |
| Net Profit Margin | 3.6% | 5.9% (3.3%–7.7%) | -2.3pt |
Both operating margin and net profit margin are below industry medians, placing the company in the lower tier for profitability.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | -2.7% | 13.2% (2.5%–28.5%) | -15.8pt |
Revenue growth rate is well below the industry median; growth from the core Die-casting segment was offset by the sharp decline in Printing Equipment, leaving the company behind industry averages.
※ Source: Company compilation
Improvements in Die-casting profitability and effective cost management delivered a resilient Operating Income increase of +4.1% despite lower sales. Segment margin improved to 4.2% (from 3.3% prior year), showing enhanced profitability and potential for accelerated profit growth in a recovery in automotive demand. However, the sharp decline in Printing Equipment (Revenue -45.7%, Profit -89.9%) and continued losses in Housing & Tools reduce portfolio diversification and represent medium-term structural challenges.
Operating Cash Flow of ¥7.0B is only 0.26x of Net Income ¥27.4B, with working capital deterioration (inventory up, payables down) driving cash outflows. Free CF of -¥15.2B and inability to self-fund dividends, combined with short-term debt dependence of 49% and Debt/EBITDA ~8.5x, make working capital management and restoration of cash generation urgent tasks through H2. Inventory reduction and improved collections are essential to achieve full-year guidance; progress on cash flow normalization will be a key evaluation point.
The large increase in Net Income (+40.9%) was supported by a one-off gain on sale of investment securities of ¥10.2B, and sustainable earning power should be evaluated against Ordinary Income of ¥28.4B (+15.3%). Q1 progress toward the full-year forecast is broadly standard, but Q1 Net Income progress of 23.5% includes one-off gains; core-earnings performance and demonstrated cash generation will determine dividend sustainability and financial flexibility. In industry comparisons, operating margin, net margin, and growth are all below medians, and low ROE of 1.4% remains a structural issue.
This report is an AI-generated earnings analysis based on XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company from public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed.