Jibannet Holdings Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥1.54B
• Operating Income: ¥6M
• Net Income: ¥-17M
• EPS: ¥-0.75

Income Statement

Balance Sheet

Cash Flow Statement

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

Verdict: Strong top-line expansion but margin compression and a tax-driven swing to net loss make FY2026 Q2 a mixed quarter with fragile profitability. Revenue surged 72.6% YoY to 15.38, while gross profit reached 6.40 (gross margin 41.6%). Operating income was just 0.06, down 14.5% YoY, translating to a slim 0.4% operating margin. Ordinary income fell 62.7% YoY to 0.04, with net income turning to a loss of -0.16 despite positive operating profit. The effective tax rate spiked to 1,649%, which is the primary driver of the bottom-line deterioration relative to pretax profit of 0.01. SG&A of 6.34 effectively consumed the gross profit (SG&A ratio ≈ 41.2%), leaving limited operating leverage from the strong sales growth. Non-operating items were slightly negative on balance (income 0.06 vs expenses 0.08), further dampening ordinary income. Operating margin compressed by roughly 40 bps YoY (est. ~0.8% to ~0.4%), despite scale benefits in revenue. Cash flow from operations was positive at 0.27, outpacing net income, indicating better cash conversion than accounting earnings this quarter. Liquidity is solid with a current ratio of 284.9% and cash of 5.70 against short-term loans of 1.21, reducing near-term refinancing risk. Balance sheet shows significant intangibles (intangible assets 6.01 incl. goodwill 5.34) relative to equity (12.24), implying potential impairment sensitivity. Capital efficiency remains weak with ROE at -1.3% and ROIC at 0.4%, well below the 5% warning threshold. Interest coverage is reported at 10.24x, suggesting limited immediate debt-servicing pressure. Forward-looking, the key swing factors are SG&A discipline, normalization of the abnormal tax charge, and sustaining gross margin while scaling revenue. If tax effects normalize and SG&A is contained, the operating profit base could translate into positive net income, but current ROIC suggests the need for profitability-focused execution.

Profitability Analysis

ROE decomposition (DuPont): Net Profit Margin (-1.0%) × Asset Turnover (0.767) × Financial Leverage (1.64x) = ROE (-1.3%). The largest negative change driver is the net profit margin, which was dragged by an extraordinary tax burden (effective tax rate 1,649%) and limited operating margin despite strong sales. Operating margin is 0.4% (0.06/15.38), down an estimated ~40 bps YoY from ~0.8%, as SG&A (6.34) nearly matched gross profit (6.40). Asset turnover at 0.767 indicates modest efficiency for a service-oriented, asset-light model, but it could be understated/affected by period mix. Financial leverage of 1.64x is moderate and not the main determinant of ROE this quarter. Business reason for margin pressure: rapid revenue growth likely required higher personnel, fulfillment, and overhead capacity, and non-operating net expenses plus an outsized tax charge compressed ordinary and net margins. Sustainability: revenue growth appears demand-driven, but the tax effect looks one-off or non-recurring (valuation allowance/deferred tax adjustment), thus net margin could normalize if core operations hold. Concerning trend: SG&A growth appears to have outpaced operating profit growth (OI -14.5% YoY vs revenue +72.6%), suggesting operating deleverage despite scale. Monitoring gross margin resilience (41.6%) and SG&A ratio (~41.2%) is crucial to restore double-digit ROIC over time.

Growth Assessment

Top-line growth of +72.6% YoY to 15.38 is a notable acceleration, indicating strong order intake or market share gains. However, the conversion to profit was weak: operating income fell 14.5% YoY to 0.06, and ordinary income dropped 62.7% to 0.04. The negative net income (-0.16) is inconsistent with the revenue momentum, implying cost absorption and tax effects overshadowed growth. Gross margin at 41.6% suggests underlying pricing and mix remain acceptable, but SG&A consumed almost all gross profit. The estimated operating margin compression (~40 bps YoY) indicates insufficient operating leverage. Near-term outlook hinges on cost control and scaling efficiency; if SG&A normalizes relative to revenue, operating margin could recover to ~1%+ levels even without further gross margin expansion. Non-operating balance (-0.02 net) is small but should be watched to avoid erosion of ordinary income. Given ROIC at 0.4%, incremental growth needs to be value accretive; management focus should be on profitability per unit of capital rather than volume. With positive OCF (0.27) and minimal capex (0.02), the model can fund growth initiatives, but earnings quality must improve. Guidance is not provided here; risk-adjusted growth outlook remains cautious until tax normalization and SG&A discipline are evidenced.

Financial Health

Liquidity is strong: current assets 13.13 vs current liabilities 4.61 yields a current ratio of 284.9% and a quick ratio of 284.9%. No warning on current ratio (<1.0) or D/E (>2.0); D/E is a conservative 0.64x. Cash and deposits of 5.70 comfortably exceed short-term loans of 1.21 and accounts payable of 1.26, limiting maturity mismatch risk. Total liabilities are 7.80 against equity of 12.24, indicating moderate leverage. Interest coverage is reported at 10.24x, suggesting adequate buffer for interest costs. Significant intangibles (6.01) including goodwill (5.34) comprise a large share of assets (20.04), implying potential impairment sensitivity if profitability remains weak. Long-term debt details are unreported, but with noncurrent liabilities at 3.19 and strong liquidity, refinancing pressure appears manageable. No off-balance sheet obligations are disclosed in the provided data.

Cash Flow Quality

OCF was 0.27 versus net income of -0.16, giving an OCF/NI ratio of -1.70x (flag), though interpretation is distorted by the negative numerator/denominator mix; directionally, cash generation exceeds accounting profit this quarter. Working capital appears a likely contributor to positive OCF given revenue growth, but detailed drivers are unreported. Capex was modest at 0.02, implying low capital intensity and supportive cash conversion in steady state. Proxy FCF (OCF - capex) is approximately 0.25, but full investing cash flows are unreported, so true FCF may differ. Financing CF was an inflow of 0.59, including share repurchases of 0.13; the remainder likely reflects debt or equity movements (details unreported). No signs of aggressive working capital manipulation are evident from the limited data, but the sharp tax charge driving accounting loss is a quality concern until clarified. Overall, cash flow quality is better than the headline loss suggests, yet sustainability depends on stabilizing margins and normalizing taxes.

Dividend Sustainability

Dividend data are unreported for the period, and payout ratios are not calculable. With net income negative and ROIC at 0.4%, distributable capacity from earnings is limited. Cash generation was positive (OCF 0.27) and capex is low (0.02), implying some room for maintenance-level distributions if a policy exists, but prudence would favor reinvestment until profitability improves. Financing inflow alongside share repurchases (0.13) suggests capital allocation activity continues, but without dividend disclosures we cannot assess coverage. Key determinants of future dividend sustainability are normalization of net income (via tax stabilization) and maintaining positive OCF. Policy outlook cannot be inferred from the provided data.

Risk Assessment

Business Risks:

• Margin risk from SG&A growth outpacing revenue growth, compressing operating margin to 0.4%.
• Demand cyclicality tied to construction/housing-related activity affecting order inflow.
• High intangibles and goodwill (6.01 and 5.34) relative to equity (12.24) create impairment risk if performance weakens.
• Execution risk in scaling operations without eroding gross margin (41.6%).
• Tax risk evidenced by an abnormal 1,649% effective tax rate distorting net income.

Financial Risks:

• Small earnings base with negative net income increases sensitivity to shocks.
• Reliance on short-term loans (1.21) though mitigated by cash (5.70).
• Low ROIC (0.4%) implies poor capital efficiency and potential value dilution if growth is not profitable.
• Potential exposure to credit risk on accounts receivable (4.49) amid rapid growth.

Key Concerns:

• Sustained negative or near-zero operating margin despite strong revenue growth.
• Extraordinary tax charges leading to losses despite positive operating income.
• Impairment susceptibility from sizable goodwill versus equity.
• Visibility: multiple items unreported (investing CF, dividend policy, cost breakdown), limiting transparency.

Investment Implications

Key Takeaways:

• Top-line growth is strong (+72.6% YoY), but profitability lags with operating margin at 0.4%.
• Net loss (-0.16) is primarily tax-driven given pretax profit of 0.01 and a 1,649% effective tax rate.
• Cash position and liquidity are solid (current ratio 285%, cash 5.70 vs ST loans 1.21).
• Capital efficiency is weak (ROE -1.3%, ROIC 0.4%), necessitating focus on margin and asset utilization.
• SG&A intensity (~41.2% of sales) leaves minimal room for operating leverage.
• Positive OCF (0.27) with low capex (0.02) supports near-term funding without heavy external reliance.

Metrics to Watch:

• SG&A ratio to sales and its trajectory quarter-on-quarter.
• Gross margin stability around 41.6% amid growth.
• Normalization of the effective tax rate and reconciliation items.
• Order intake/backlog and conversion to revenue.
• Goodwill impairment testing disclosures and segment profitability.
• OCF trends vs. net income, and working capital movements (AR days).

Relative Positioning: Versus domestic small-cap construction/ground survey peers, the company exhibits stronger revenue growth but weaker margin execution and markedly low ROIC. Liquidity is better than average, but earnings quality and tax volatility weigh on comparability until normalized.

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