| Indicator | Current Period | Prior-year Period | YoY |
|---|---|---|---|
| Revenue | ¥831.3B | ¥822.5B | +1.1% |
| Operating Income | ¥20.9B | ¥30.0B | -30.4% |
| Ordinary Income | ¥35.7B | ¥45.1B | -20.8% |
| Net Income | ¥116.4B | ¥29.3B | +308.2% |
| ROE | 13.1% | 3.6% | - |
FY2026 Q3 results were: Revenue ¥831.3B (YoY +¥8.8B +1.1%), Operating Income ¥20.9B (YoY -¥9.1B -30.4%), Ordinary Income ¥35.7B (YoY -¥9.4B -20.8%), and Net Income ¥116.4B (YoY +¥87.1B +297.2%). While revenue inched up, operating-level profit declined significantly; however, Net Income surged due to recognition of ¥128.9B in gains on sales of investment securities as extraordinary gains. The results reflect coexistence of deteriorating core profitability and a boost to net income from one-off asset sale gains.
[Profitability] ROE 13.0% (well above the industry median of 5.0%, but largely driven by extraordinary gains), Operating Margin 2.5% (down -1.1pt from 3.6% in the prior year, below the industry median of 8.3%), Net Margin 14.0% (up +10.4pt from 3.6% in the prior year, above the industry median of 6.3% but one-off), Gross Margin 11.6% (low for a manufacturing company), EBIT Margin 2.5%, ROIC 1.9% (well below the industry median of 5.0%). [Cash Quality] Cash and Deposits ¥325.8B (YoY +50.5%), Short-term Liabilities Coverage 22.3x, Accounts Receivable Days 64 days (better than the industry median of 82.9 days), Inventory Days 16 days (far better than the industry median of 108.8 days), Accounts Payable Days 41 days (shorter than the industry median of 55.8 days). [Capital Efficiency] Total Asset Turnover 0.554x/year (roughly in line with the industry median of 0.58x), Return on Assets 7.7% (above the industry median of 3.3%). [Financial Soundness] Equity Ratio 59.1% (improved from 56.7% in the prior year, slightly below the industry median of 63.8%), Current Ratio 224.2% (below the industry median of 284.0% but sufficient), Quick Ratio 211.7%, Debt-to-Equity Ratio 0.69x, Interest-Bearing Debt ¥204.3B, Debt/Capital 18.7%, Interest Coverage 18.64x, Financial Leverage 1.69x (roughly in line with the industry median of 1.53x).
Cash and Deposits increased substantially by +¥109.3B YoY to ¥325.8B, presumably driven primarily by monetization of ¥128.9B in gains on sales of investment securities. Short-term borrowings decreased by -47.6% to ¥3.5B, and together with higher cash, short-term liquidity improved significantly. Retained earnings increased by +¥100.9B (+33.7%) from the prior year to ¥400.5B, with stronger net income from extraordinary gains contributing to enhanced internal reserves. In working capital efficiency, accounts receivable stand at ¥144.7B with DSO of 64 days, shorter than the industry average; inventory is ¥36.8B with DIO of 16 days, extremely favorable; meanwhile, accounts payable is ¥95.7B with DPO of 41 days, shorter than the industry average, indicating remaining room to utilize supplier credit. Cash coverage of short-term liabilities is extremely high at 22.3x, indicating no liquidity pressure. However, given the decline in Operating Margin and subdued Gross Margin, attention is warranted regarding the sustainability of core cash generation (Operating Cash Flow).
With Ordinary Income at ¥35.7B and Operating Income at ¥20.9B, net non-operating gains are about ¥14.8B, suggesting contributions from equity-method gains and financial income. At the extraordinary gains level, ¥128.9B in gains on sales of investment securities were recognized, comprising the majority of Profit before tax of ¥166.6B. Non-operating income and extraordinary gains account for roughly 15.5% of revenue, indicating a structure highly dependent on non-core income. The Operating Margin of 2.5% is well below the industry median of 8.3%, and the Gross Margin of 11.6% is low for a manufacturing company, pointing to fragile profitability at the core business level. The sharp increase in Net Income depends on one-off asset sale gains, and adjusted recurring profit (at the operating level) has deteriorated from the prior year, indicating a decline in the quality of earnings. As the absolute amount of Operating Cash Flow (OCF) is undisclosed, OCF/Net Income cannot be compared; however, given the declining Operating Margin and reliance on one-off gains, the cash underpinning of earnings is estimated to be limited.
[Positioning within the industry] (Reference information, our research) Profitability: ROE 13.0% (well above the industry median of 5.0% but largely driven by extraordinary gains with limited sustainability), Operating Margin 2.5% (well below the industry median of 8.3%, bottom-tier within the industry), Net Margin 14.0% (above the industry median of 6.3% but one-off), ROIC 1.9% (well below the industry median of 5.0%, bottom-tier capital efficiency) Soundness: Equity Ratio 59.1% (slightly below the industry median of 63.8% but at a healthy level), Current Ratio 224.2% (below the industry median of 284.0% but ensuring sufficient liquidity) Efficiency: Total Asset Turnover 0.554x (roughly in line with the industry median of 0.58x), Accounts Receivable Days 64 days (better than the industry median of 82.9 days), Inventory Days 16 days (significantly more efficient than the industry median of 108.8 days), Accounts Payable Days 41 days (shorter than the industry median of 55.8 days, with room to utilize supplier credit) Growth: Revenue growth rate +1.1% (below the industry median of +2.7%), EPS growth rate (estimated to be below the industry median of +6% after excluding one-off factors) Industry: Manufacturing (N=98 companies), Comparison: FY2025 Q3 results, Source: Our compilation
This report is an earnings analysis document automatically generated by AI based on XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. The industry benchmarks are reference information compiled by our company based on publicly available financial results data. Investment decisions are your own responsibility; please consult a professional as needed before making any decisions.