| Metric | Current Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥579.8B | ¥526.8B | +10.1% |
| Operating Income / Operating Profit | ¥146.4B | ¥111.9B | +30.9% |
| Ordinary Income | ¥151.2B | ¥113.4B | +33.4% |
| Net Income / Net Profit (attributable to owners of parent) | ¥84.3B | ¥56.7B | +48.8% |
| ROE | 13.3% | 10.4% | - |
For the fiscal year ended March 2026, the company achieved revenue of ¥579.8B (YoY +¥53.0B, +10.1%), Operating Income of ¥146.4B (YoY +¥34.5B, +30.9%), Ordinary Income of ¥151.2B (YoY +¥37.8B, +33.4%), and Net Income attributable to owners of parent of ¥84.3B (YoY +¥27.6B, +48.8%), representing revenue growth and substantial profit expansion. The core Electronics Related Business accounted for 96.7% of revenue and drove revenue +10.9% and Operating Income +28.4%. Gross margin improved to 34.1% (from 30.7% prior year, +3.4pt) and Operating Margin to 25.3% (from 21.2% prior year, +4.1pt), materially enhancing profitability and demonstrating strong operating leverage. Versus full-year guidance (Revenue ¥610B, Operating Income ¥155B, Ordinary Income ¥155B), progress rates are 95.1% for revenue, 94.4% for Operating Income, and 97.6% for Ordinary Income, indicating near-achievement.
[Revenue] The core Electronics Related Business continued double-digit growth with revenue of ¥560.5B (YoY +10.9%), representing 96.7% of total revenue. The primary driver was expanding demand for specialty gas supply equipment and supply piping design/construction for advanced semiconductor manufacturing equipment, benefiting from the semiconductor investment cycle tailwind. Graphics Solution Business contracted to ¥17.2B (-10.5%) but its impact on the whole is limited (revenue share 3.0%). Solar Power Business slightly increased to ¥2.1B (+4.5%). Segment concentration is extremely high, with pronounced dependence on Electronics Related.
[Profitability] Cost of sales was ¥382.2B, yielding Gross Profit of ¥197.6B and a Gross Margin of 34.1% (improved +3.4pt from 30.7% prior year). SG&A increased to ¥51.1B (SG&A ratio 8.8%, YoY +¥1.4B, +2.9%), but the gross margin improvement far outpaced this, delivering Operating Income of ¥146.4B (+30.9%). Operating Margin expanded to 25.3% (from 21.2% prior year, +4.1pt), indicating high operating leverage. Non-operating items contributed net income of ¥4.8B (Non-operating income ¥4.9B: interest income ¥0.9B, foreign exchange gains ¥2.1B, etc., less non-operating expenses ¥0.1B), producing Ordinary Income of ¥151.2B (+33.4%). Extraordinary items were minor, consisting only of loss on disposal of fixed assets ¥0.3B. Profit before tax was ¥150.9B, from which corporate taxes ¥43.8B (effective tax rate 29.0%) and non-controlling interests ¥1.2B were deducted, resulting in Net Income attributable to owners of parent of ¥84.3B (+48.8%). The divergence between Ordinary Income and Net Income (-44.2%) is mainly due to corporate tax burden and is not a one-off factor. Conclusion: growth and significant profit increase were driven by core operations.
The Electronics Related Business reported Revenue ¥560.5B (YoY +10.9%) and Operating Income ¥156.2B (+28.4%), maintaining a segment operating margin of 27.9% and high profitability. Improvement in gross margin due to expanded demand for specialty gas supply equipment for advanced semiconductor manufacturing equipment and scale merits contributed. The Graphics Solution Business recorded Revenue ¥17.2B (-10.5%) and Operating Income ¥3.4B (-7.7%) with a margin of 19.5%. Although revenue and profit declined due to weaker market conditions, its impact on the group is limited (Operating Income contribution 2.1%). The Solar Power Business posted Revenue ¥2.1B (+4.5%) and Operating Income ¥1.2B (+6.9%) with an exceptionally high margin of 59.3%, securing stable electricity sales revenue. Corporate expenses were controlled at ¥14.6B (prior year ¥14.7B), and consolidated Operating Income of ¥146.4B was derived by deducting corporate expenses from total segment profit of ¥160.8B.
[Profitability] Operating Margin of 25.3% improved +4.1pt from 21.2% prior year, and Net Profit Margin rose to 14.5% (from 10.8% prior year, +3.8pt). ROE of 13.3% is decomposed via DuPont as Net Profit Margin 14.5% × Total Asset Turnover 0.77x × Financial Leverage 1.19x, indicating improvement in ROE mainly driven by higher profitability. ROA (on Ordinary Income basis) rose to 21.4% (prior year 18.6%), showing improvements in both asset efficiency and profit margin. [Cash quality] Operating Cash Flow (OCF) was ¥96.0B, 1.14x of Net Income ¥84.3B, which is healthy, but OCF subtotal of ¥136.4B was offset by corporate tax payments ¥41.3B, increase in trade receivables ¥24.8B, and increase in inventories ¥13.5B as cash outflows. OCF/EBITDA (Operating Income + Depreciation) equals ¥96.0B ÷ (¥146.4B + ¥12.6B) = 0.60x, indicating slowed cash conversion and highlighting the need to improve working capital efficiency. [Investment efficiency] Total Asset Turnover was 0.77x (prior year 0.80x), slightly down, driven by asset expansion due to increased trade receivables. Fixed Asset Turnover improved to 3.87x (prior year 3.52x), indicating better capital efficiency. CapEx ¥7.1B / Depreciation ¥12.6B = 0.56x shows restrained investment, so attention is needed on whether medium-term growth and maintenance investments are being met. [Financial soundness] Equity Ratio is 83.9% (prior year 83.1%), Current Ratio 526.0% (prior year 484.8%), Quick Ratio 510.7% (prior year 465.5%), maintaining an extremely robust financial position. Debt-to-equity ratio is 0.19x (prior year 0.20x), and Interest Coverage is 2091x (OCF ¥96.0B ÷ Interest Paid ¥0.046B), indicating negligible interest burden and limited financial risk. Cash and deposits ¥216.2B and Available-for-sale securities ¥18.8B show ample surplus resources, providing room for growth investment and shareholder returns.
Operating Cash Flow was ¥96.0B (prior year ¥141.9B, -32.3%). While 1.14x of Net Income ¥84.3B indicates generally healthy cash backing for profits, OCF declined substantially YoY. From OCF subtotal ¥136.4B, increases in trade receivables ¥24.8B, inventories ¥13.5B, and corporate tax payments ¥41.3B were main cash outflows, partially offset by increases in trade payables ¥3.1B. Working capital increases associated with revenue expansion compressed cash generation; Days Sales Outstanding (DSO) is about 164 days and Cash Conversion Cycle (CCC) about 200 days, both trending longer. Investing Cash Flow was -¥64.2B, driven by CapEx ¥7.1B plus net increases in time deposits and accumulation of investment securities. CapEx/Depreciation at 0.56x indicates restrained investment, which supports short-term cash generation but warrants attention for medium-term growth and maintenance adequacy. Financing Cash Flow was -¥25.6B, mainly due to dividend payments ¥24.7B. Free Cash Flow was ¥31.9B (OCF ¥96.0B + Investing CF -¥64.2B), remaining positive and covering dividend payments ¥24.7B. Cash and cash equivalents at period-end were ¥156.5B (prior period-end ¥149.5B, +¥7.0B), with FX translation effects ¥0.8B and increases from newly consolidated subsidiaries ¥1.7B contributing.
Earnings quality is high and driven by core operations. Operating Income ¥146.4B compared to Ordinary Income ¥151.2B indicates net non-operating contribution of ¥4.8B (0.8% of revenue), which is minor; most profit was generated from operating activities. Non-operating income consisted mainly of recurring items such as interest income ¥0.9B, foreign exchange gains ¥2.1B, and equity-method income ¥0.5B. Extraordinary items were limited to loss on disposal of fixed assets ¥0.3B, so one-off impacts are minimal. From an accrual quality perspective, OCF ¥96.0B exceeds Net Income ¥84.3B, indicating good cash backing; however, OCF/EBITDA of 0.60x shows somewhat low cash conversion, with buildup of working capital (increases in receivables and inventories) suppressing cash realization of profits. Comprehensive income of ¥110.7B exceeded total net income ¥105.9B (Net Income attributable to owners ¥84.3B + non-controlling interests ¥1.2B) by ¥4.8B, comprising Other Comprehensive Income ¥3.6B (foreign currency translation adjustments ¥0.8B, valuation difference on securities ¥2.1B, retirement benefit adjustments ¥0.6B). These are valuation items and do not impair earnings quality.
Full-year guidance is Revenue ¥610.0B (YoY +5.2%), Operating Income ¥155.0B (+5.9%), Ordinary Income ¥155.0B (+2.5%), and Net Income attributable to owners of parent ¥108.0B. Actuals represent Revenue ¥579.8B (progress 95.1%), Operating Income ¥146.4B (94.4%), Ordinary Income ¥151.2B (97.6%), and Net Income attributable to owners ¥84.3B (78.1%). Revenue, Operating Income, and Ordinary Income are near target, while Net Income slightly underperformed guidance. While Electronics Related Business achieved steady revenue and profit expansion, year-end increase in trade receivables pressured cash efficiency and possibly prompted a somewhat cautious outlook in the final stage toward meeting full-year guidance. Full-year forecast EPS was ¥105.08 versus actual EPS ¥103.07, broadly aligned and suggesting high probability of the forecast.
A year-end lump-sum dividend of ¥32 per share was paid. Payout Ratio is 31.3% (Total dividends ¥24.7B ÷ Net Income attributable to owners ¥84.3B), reflecting a balance between retained earnings and returns. With Free Cash Flow ¥31.9B and dividend payments ¥24.7B, FCF coverage is 0.77x (Dividend / FCF), indicating a sustainable dividend policy funded from internal resources. Prior year payout ratio was also 31.3%, showing continuity of returns and a stable dividend policy. With Cash and deposits ¥216.2B and Equity Ratio 83.9%, financial capacity is ample and there is significant room for future dividend increases. No share buybacks were confirmed; current shareholder returns consist only of dividends. Although dividend forecast indicated year-end ¥0, ¥32 was actually paid, likely reflecting timing differences between forecast updates and actual disclosure.
Working capital efficiency deterioration risk: Trade receivables ¥260.8B (prior year ¥235.6B, +10.7%), inventories ¥17.3B (prior year ¥17.4B), Days Sales Outstanding approximately 164 days, and CCC approximately 200 days, showing a trend toward elongation. OCF/EBITDA ratio 0.60x indicates slowed cash conversion, making review of collection terms and strengthening of credit management urgent. Continued increase in receivables could impair cash efficiency and raise credit risk.
Business concentration risk: Electronics Related Business accounts for 96.7% of revenue and 97.1% of Operating Income, demonstrating extremely high dependence on the semiconductor investment cycle. While demand for advanced semiconductor manufacturing equipment is expected to remain firm in the near term, temporary slowdowns in semiconductor capital expenditure or demand fluctuations due to geopolitical risks could directly impact performance. High concentration in a single business amplifies earnings volatility risk.
Underinvestment risk: CapEx ¥7.1B / Depreciation ¥12.6B = 0.56x, with investment substantially below depreciation. This is positive for short-term capital efficiency but could lead to deferred maintenance or missed growth investment opportunities in the medium term, raising concerns about asset aging and competitive deterioration. Although Fixed Asset Turnover has improved, optimizing the pace of capital investment will be key to sustainable growth.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 25.3% | 8.1% (3.6%–16.0%) | +17.2pt |
| Net Profit Margin | 14.5% | 5.8% (1.2%–11.6%) | +8.7pt |
Profitability is outstanding within the industry, with both Operating Margin and Net Profit Margin well above the median.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 10.1% | 10.1% (1.7%–20.2%) | -0.0pt |
Revenue growth is in line with the industry median, indicating a stable growth trajectory.
※ Source: Company compilation
Significant improvement in profitability is a highlight. Operating Margin 25.3% (YoY +4.1pt), Net Profit Margin 14.5% (+3.8pt), and ROE 13.3% all improved, reaching levels that are outstanding within the industry. If gross margin improvement to 34.1% and SG&A containment sustaining operating leverage continue, medium-term establishment of a high-profit structure can be expected.
There is substantial room to improve working capital efficiency. With DSO 164 days, CCC 200 days, and OCF/EBITDA 0.60x indicating slowed cash conversion, reviewing collection terms and strengthening credit management could improve cash efficiency, enabling additional cash generation and expansion of growth investment capacity. Financial soundness is extremely high (Equity Ratio 83.9%, cash and deposits ¥216B), limiting liquidity risk.
Balancing the semiconductor investment cycle tailwind and business concentration risk is key. Electronics Related Business accounts for 96.7% of revenue, and expanded demand for advanced semiconductor manufacturing equipment is driving results. While the near-term semiconductor investment cycle is favorable, geopolitical risks or temporary reductions in capital expenditure could amplify earnings volatility. Normalization of CapEx pace (current CapEx/Depreciation 0.56x) and diversification of the business portfolio are keys to stable medium-term growth.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company based on publicly disclosed financial statements. Investment decisions are your own responsibility; please consult experts as necessary before making investment decisions.