NASU DENKI-TEKKO CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥11.06B
• Operating Income: ¥1.34B
• Net Income: ¥989M
• EPS: ¥955.76

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

For FY2026 Q2 (consolidated, JGAAP), 那須電機鉄工株式会社 delivered solid top-line and stronger bottom-line growth, with revenue of ¥11.06bn (+8.7% YoY) and operating income of ¥1.343bn (+15.9% YoY), indicating positive operating leverage. Gross profit of ¥2.150bn translated to a gross margin of 19.4%, while operating margin improved to 12.1%, underscoring effective cost control and pricing/mix discipline. Ordinary income reached ¥1.526bn, exceeding operating income by roughly ¥183m, suggesting a meaningful contribution from non-operating items despite ¥42.9m of interest expense. Net income was ¥1.114bn (+13.2% YoY), yielding a net margin of 10.1%, a robust level for an industrial/manufacturing profile with project-related exposure. Liquidity appears strong with a current ratio of 303% and working capital of ¥12.02bn, supported by a conservative balance sheet structure. Total assets of ¥44.86bn against total equity of ¥30.97bn implies modest leverage (assets/equity 1.45x) and a liabilities-to-equity ratio near 0.47x. The DuPont decomposition indicates ROE of 3.60% driven by a 10.07% net margin, asset turnover of 0.247x, and financial leverage of 1.45x, highlighting that low asset turnover is the main constraint on equity returns. Interest coverage remains strong at 31.3x (operating income/interest), suggesting low refinancing risk under current earnings. Based on income tax of ¥511m versus an inferred pre-tax profit around ¥1.625bn (net income plus tax), the effective tax rate is approximately 31–32%, indicating normalized tax burden despite the dashboard showing 0.0% (which likely reflects non-disclosure rather than an actual rate). Cash flow statement items are not disclosed in this dataset (all zeros), so free cash flow and OCF conversion cannot be assessed from the provided figures. Similarly, inventories and cash balances are not disclosed here, which limits a deeper working capital and liquidity quality analysis. Dividend data are not provided (DPS and payout shown as zero), therefore dividend capacity and policy trends cannot be evaluated from this snapshot. EPS of ¥955.76 is reported, but outstanding shares are not disclosed, limiting cross-checks and per-share normalization. Overall, the company’s earnings quality appears supported by expanding margins and positive operating leverage, while balance sheet strength underpins resilience. The principal analytical gaps relate to unreported cash flow, inventories, and share count, which constrain assessment of cash conversion, capital intensity dynamics, and shareholder return capacity.

Profitability Analysis

ROE_decomposition: Reported DuPont inputs: Net profit margin 10.07% × Asset turnover 0.247 × Financial leverage 1.45 = ROE 3.60%. The margin is the key positive driver, leverage is moderate, and low asset turnover is the primary drag on ROE. margin_quality: Gross margin 19.4% (¥2,149.8m/¥11,060.0m) and operating margin 12.1% (¥1,343.0m/¥11,060.0m) indicate disciplined cost control and pricing. Net margin 10.1% is strong for an industrial manufacturer. Ordinary income exceeds operating income by ~¥183m, implying non-operating gains (e.g., interest/dividends, FX, equity-method) partly offsetting ¥42.9m interest expense. Inferred effective tax rate approx. 31–32% (¥511.2m tax on ~¥1,625m pre-tax), consistent with a normalized burden. operating_leverage: Revenue growth of +8.7% YoY versus operating income growth of +15.9% YoY signals positive operating leverage, likely from utilization gains, fixed-cost dilution, and/or favorable project mix. The improvement from gross to operating margin further suggests SG&A discipline.

Growth Assessment

revenue_sustainability: Top-line expansion of +8.7% YoY appears healthy and is consistent with stable demand and/or improved pricing. Sustainability will depend on order backlog health, delivery schedules, and end-market capex cycles. profit_quality: Earnings growth outpaced sales, backed by margin expansion. Ordinary income benefited from non-operating items; durability of these contributions should be monitored. Core profitability looks supported by cost control and mix. outlook: With strong liquidity and modest leverage, the company is positioned to navigate project timing and input cost volatility. Continued execution on backlog and maintaining margins will be critical. Given data limitations (no cash flow or inventory detail), visibility into conversion and working capital intensity remains incomplete.

Financial Health

liquidity: Current assets ¥17.95bn vs. current liabilities ¥5.93bn imply a current ratio of ~303% and working capital of ¥12.02bn, indicating ample short-term coverage. Quick ratio matches the current ratio in this dataset due to undisclosed inventories; actual quick liquidity may be lower if inventories are material. solvency: Total liabilities ¥14.50bn vs. equity ¥30.97bn imply a liabilities-to-equity ratio ~0.47x and financial leverage (assets/equity) 1.45x, reflecting a conservative capital structure. Interest coverage is strong at ~31.3x, suggesting low near-term solvency risk. capital_structure: Equity constitutes the majority of capitalization (equity ≈69% of assets by calculation), although the reported equity ratio field is undisclosed. The balance sheet appears under-levered relative to typical industrial peers, providing flexibility.

Cash Flow Quality

earnings_quality: OCF is undisclosed in this dataset (shown as zero per the note), preventing direct assessment of cash conversion. However, the alignment of gross-to-operating margin and strong interest coverage suggest earnings are not excessively reliant on financial income. FCF_analysis: Free cash flow cannot be computed due to undisclosed operating and investing cash flows. Capex level and working capital swings (particularly receivables and inventories) are the key unknowns. working_capital: Working capital is sizable at ¥12.02bn, but the absence of inventory and cash disclosures prevents analysis of inventory turns, receivables/payables days, and cash buffer adequacy. Monitoring collection cycles and project milestone billing is important for cash realization.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout are shown as zero due to non-disclosure; thus, payout ratio cannot be meaningfully assessed. EPS is ¥955.76 for the period, indicating theoretical capacity, but policy and timing are unknown. FCF_coverage: FCF data are unavailable, so coverage cannot be evaluated. Any assessment would require OCF and capex detail. policy_outlook: Without disclosed dividends or guidance, policy visibility is limited. Given the conservative balance sheet, sustaining or initiating shareholder returns would hinge on cash conversion, capex needs, and order visibility.

Risk Assessment

Business Risks:

• Order timing and backlog execution risk affecting quarterly revenue recognition and margins
• Input cost volatility (e.g., steel and electrical components) potentially compressing gross margins
• Project mix and pricing risk impacting profitability sustainability
• Supply chain constraints and lead times for key components
• Labor availability and skilled technician constraints in project execution
• Customer concentration in infrastructure and industrial end-markets
• Potential delays or cancellations tied to public and private capex cycles

Financial Risks:

• Limited visibility on cash conversion due to undisclosed OCF and inventories
• Dependence on non-operating income contributions to ordinary income in the period
• Interest rate exposure on floating-rate debt (magnitude unknown)
• Working capital intensity and collection risk on receivables from large projects
• FX exposure if import content or overseas transactions are material (not disclosed)

Key Concerns:

• Cash flow statement items, inventories, and cash balances are undisclosed in this snapshot
• ROE of 3.60% is constrained by low asset turnover (0.247x)
• Ordinary income relies partly on non-operating gains; sustainability uncertain
• Dividend policy and payout capacity not assessable without cash flow data

Investment Implications

Key Takeaways:

• Revenue up 8.7% YoY with operating income up 15.9% indicates positive operating leverage
• Healthy margins: gross 19.4%, operating 12.1%, net 10.1%
• Strong balance sheet: liabilities/equity ~0.47x and interest coverage ~31x
• ROE at 3.60% constrained by low asset turnover (0.247x)
• Ordinary income exceeds operating by ~¥183m, implying non-operating support
• Liquidity ample with current ratio ~303% and working capital ~¥12.0bn
• Key analytical gaps: cash flow, inventories, and dividend details are not disclosed

Metrics to Watch:

• Order backlog, book-to-bill, and project margin progression
• Operating cash flow and OCF/NI conversion ratio
• Capex and free cash flow trend
• Receivables and inventory days, and overall working capital intensity
• Breakdown of non-operating income (interest/dividends, FX, equity-method)
• Gross-to-operating margin spread as an indicator of SG&A discipline
• Leverage and interest coverage amid interest rate changes
• Dividend policy updates and payout guidance

Relative Positioning: Versus domestic industrial/fabrication peers, the company shows above-average operating margins and conservative leverage, but lower asset turnover keeps ROE modest; visibility on cash conversion and dividend capacity lags peers with fuller disclosure.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis