RAKUMACHI,INC. FY2026 Q1 Earnings Report

Financial Highlights

• Operating Income: ¥497M
• Net Income: ¥372M
• EPS: ¥18.73

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

Rakumachi Co., Ltd. (60370) reported strong FY2026 Q1 profit growth under JGAAP on a non-consolidated basis, with operating income of 4.97 billion yen-equivalent and ordinary income of 5.52 billion yen-equivalent, up 80.4% and 68.6% YoY, respectively. Net income was 3.72 billion yen-equivalent, up 68.5% YoY, indicating robust bottom-line momentum early in the fiscal year. Revenue and gross profit were not disclosed, limiting full margin analysis, but the magnitude of operating profit growth signals meaningful operating leverage and/or cost control. Non-operating income was 0.55, of which interest income contributed 0.54, showing that financial income from cash and securities was a notable enhancer of ordinary profit. The balance sheet is very strong: equity is 50.00 against total assets of 54.91, implying an equity ratio of roughly 91.1% and modest liabilities of 8.18. Liquidity appears ample with current assets of 17.56 versus current liabilities of 8.18, yielding a current and quick ratio of 214.7%. Asset composition is conservative but return-dilutive, with investment securities at 40.85 (about 74% of total assets) and cash/deposits at 9.72, indicating a sizeable financial asset portfolio. The calculated financial leverage (assets/equity) is only 1.10x, implying low balance sheet risk and that ROE is driven more by margins/turnover than leverage. Based on Q1 net income to period-end equity, quarterly ROE is approximately 7.4% (3.72/50.00), equivalent to roughly 29–30% annualized if results are sustained; however, this is a rough approximation due to the lack of beginning equity and revenue disclosure. There is a numerical inconsistency between profit before tax (3.28) and net income (3.72) alongside reported income tax of 1.07; this suggests either significant extraordinary items/tax adjustments not disclosed in the breakdown or data mapping differences, so caution is warranted in interpreting the bottom-line bridge. The effective tax rate marker of 32.5% appears aligned with 1.07 divided by profit before tax, but it does not reconcile to the higher net income figure. Dividend payout ratio is indicated at 53.1%, implying a shareholder return orientation, but cash flow coverage cannot be assessed as OCF/FCF were not disclosed. With large liquid financial assets, near-term dividend capacity appears supported, though reliance on non-operating income and market conditions poses a risk to stability. Absent revenue disclosure, we cannot determine whether profit growth stems from top-line expansion versus mix and cost dynamics. Overall, the company enters FY2026 with strong profitability, a cash-rich and low-leverage balance sheet, and solid liquidity, but transparency gaps in revenue and cash flows, and the PBT-to-net reconciliation, are key areas to monitor. Continued disclosure on the composition and valuation of investment securities will be important given their size and role in non-operating income. The outlook hinges on sustaining operating profit gains while managing return volatility from financial assets. Investors should watch for upcoming quarters’ revenue detail, operating KPIs, and any extraordinary items that might explain the current period’s bridge to net income.

Profitability Analysis

ROE_decomposition: DuPont detail is constrained due to missing revenue and gross profit. Using available data: quarterly ROE ≈ 7.4% (Net income 3.72 / Equity 50.00). Financial leverage is low at 1.10x (Assets 54.91 / Equity 50.00). Net margin and asset turnover cannot be computed without revenue; however, ordinary income was lifted by non-operating interest income (0.54), which accounted for about 9.8% of ordinary income (0.54/5.52). The implication is that ROE uplift in Q1 came from strong operating profit and a tailwind from financial income rather than leverage. margin_quality: Operating income growth of +80.4% YoY, without revenue disclosure, implies either significant operating margin expansion or cost efficiencies. Interest income contribution suggests part of ordinary margin strength is non-core. Extraordinary items likely affected the PBT figure versus ordinary income, but details are unreported. operating_leverage: Given undisclosed revenue, exact operating leverage cannot be quantified; however, the scale of operating profit growth suggests favorable fixed-cost absorption or mix. The absence of D&A data limits EBITDA-based assessment.

Growth Assessment

revenue_sustainability: Revenue is unreported; sustainability of current profit run-rate cannot be assessed directly. The degree to which growth is volume-driven versus price/mix remains unknown. profit_quality: Operating profit expanded strongly, but ordinary profit benefited from 0.54 of interest income, indicating some dependence on financial income. A discrepancy between ordinary income (5.52) and profit before tax (3.28) hints at sizeable extraordinary losses or data mapping issues; net income exceeding PBT despite positive tax expense suggests additional items (e.g., tax adjustments) not disclosed. outlook: Short-term outlook is supported by strong Q1 profitability and a robust balance sheet. Sustainability will depend on maintaining operating momentum and mitigating volatility from financial asset returns. Clarity on revenue drivers and extraordinary items is needed in subsequent disclosures.

Financial Health

liquidity: Current ratio 214.7% and quick ratio 214.7% (Current assets 17.56 vs. Current liabilities 8.18) indicate ample near-term coverage. Cash and deposits total 9.72, and receivables 4.61. Most securities are noncurrent (40.85), so day-to-day liquidity relies primarily on cash and receivables. solvency: Total liabilities 8.18 vs. equity 50.00 yield a debt-to-equity ratio of 0.16x. Equity ratio is approximately 91.1% (50.00/54.91), indicating very low leverage and strong solvency. capital_structure: Financial leverage at 1.10x reflects a highly equity-funded structure. Noncurrent liabilities are minimal at 0.50. Large investment securities holdings (40.85; ~74% of assets) dominate the asset side, implying low operating asset intensity but exposure to market valuation and interest rate risk.

Cash Flow Quality

earnings_quality: OCF and FCF are unreported; therefore, accrual intensity and cash conversion cannot be evaluated. The sizable contribution from interest income (0.54) to ordinary income suggests a portion of earnings comes from financial assets rather than core operations. FCF_analysis: Not calculable due to missing OCF and CapEx. With cash of 9.72 and significant investment securities, liquidity is strong, but true free cash generation from operations remains unknown. working_capital: Receivables are 4.61; inventories are unreported. Without revenue, we cannot assess DSO or working capital days. Current assets exceed current liabilities by 9.38, providing a solid cushion.

Dividend Sustainability

payout_ratio_assessment: The calculated payout ratio is 53.1% based on reported EPS of 18.73 JPY, implying moderate-to-high payout. Exact DPS is unreported. FCF_coverage: Not assessable due to missing OCF/FCF data. However, the balance sheet’s liquidity (cash 9.72) and financial assets (40.85) suggest near-term capacity to fund dividends, independent of operating cash flow in the short run. policy_outlook: Given strong profit growth and a substantial net cash/securities position, the current payout stance appears maintainable, subject to profitability durability and potential volatility in financial income. Explicit dividend policy disclosure was not provided.

Risk Assessment

Business Risks:

• Revenue visibility risk due to non-disclosure; uncertainty over the drivers of profit growth
• Potential concentration risk in core business lines (not disclosed) that could amplify volatility
• Operational leverage risk if fixed-cost base is high and revenue growth slows
• Regulatory or compliance changes affecting operating model (sector unspecified)

Financial Risks:

• Large investment securities exposure (40.85; ~74% of assets) introduces market and valuation risks
• Earnings sensitivity to interest rates as interest income (0.54) materially contributes to ordinary income
• Data inconsistency between ordinary income, profit before tax (3.28), tax (1.07), and net income (3.72) complicates assessment of recurring earnings
• Liquidity reliance on cash and receivables while most securities are noncurrent

Key Concerns:

• Lack of revenue and cash flow disclosure prevents margin and cash conversion analysis
• Unreconciled bridge from ordinary income to profit before tax and net income
• Sustainability of extraordinary/non-operating contributions to profit
• Potential volatility from a sizable financial asset portfolio

Investment Implications

Key Takeaways:

• Strong Q1 profit growth: operating income +80.4% YoY; ordinary income +68.6% YoY; net income +68.5% YoY
• Balance sheet strength: equity ratio ~91.1%, D/E ~0.16x, current ratio ~215%
• Material financial asset base: investment securities 40.85 (~74% of assets) generating interest income (0.54)
• Quarterly ROE approx. 7.4% (annualized ~30%) driven by profit strength and low leverage
• Transparency gaps: revenue, cash flows, and extraordinary items not disclosed or inconsistent

Metrics to Watch:

• Revenue disclosure and operating KPIs to validate margin sustainability
• Operating cash flow and free cash flow to assess earnings quality and dividend coverage
• Composition, duration, and valuation of investment securities; sensitivity to interest rates
• Reconciliation of ordinary income to profit before tax and net income (extraordinary items, tax effects)
• SG&A breakdown and D&A to gauge cost structure and operating leverage

Relative Positioning: The company appears asset-light with exceptionally low leverage and substantial financial assets, positioning it defensively on the balance sheet but potentially exposed to earnings volatility from non-operating income; profitability momentum is strong, yet disclosure gaps limit direct comparability on operating efficiency versus peers.

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