A-ONE SEIMITSU INC. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥383M
• Operating Income: ¥37M
• Net Income: ¥30M
• EPS: ¥6.05

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment 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

A-One Seimitsu (6156) reported FY2026 Q1 standalone results under JGAAP with revenue of ¥383m (-3.1% YoY) and a sharp profit recovery: operating income ¥37m (+160.9% YoY), ordinary income ¥44m, and net income ¥30m (+101.4% YoY). Gross profit was ¥93.7m, yielding a gross margin of 24.5%, and the operating margin improved to 9.7%, indicating meaningful cost discipline and/or a more profitable mix despite modest top-line contraction. Ordinary income exceeded operating income by ¥7m, suggesting positive non-operating contributions. Using net income of ¥30m on revenue of ¥383m, the net margin was 7.83%, consistent with the provided DuPont inputs. The balance sheet remains exceptionally strong with total assets of ¥7.7bn and equity of ¥7.055bn; this implies an equity ratio of roughly 91.6% (vs. reported 0.0% which appears undisclosed), and a very low debt-to-equity of about 0.08x. Liquidity is abundant: current assets of ¥5.347bn against current liabilities of ¥107.8m result in a current ratio of ~49.6x and working capital of ~¥5.24bn. Asset turnover is low at 0.05x (quarterly revenue vs. asset base), which depresses ROE to 0.43% for the quarter despite the improved margins. If we approximate income before tax near ordinary income, the tax expense of ¥6.95m implies a rough effective tax rate in the mid-teens; however, the precise pretax figure is not disclosed. Cash flow details (OCF/FCF) are not reported this quarter, limiting earnings-quality validation and dividend coverage assessment. EPS was ¥6.05; combining with net income suggests an implied share count of ~4.96m, though outstanding shares were not disclosed. Overall, Q1 demonstrates notable margin recovery on a resilient but slightly softer revenue base, underpinned by a fortress balance sheet and minimal leverage. The key watchpoint is whether margin gains are sustainable as demand normalizes, and whether asset efficiency can improve to lift ROE. With cash flow statements and dividends unreported, we place greater emphasis on upcoming quarters for confirmation of cash conversion and capital allocation policy.

Profitability Analysis

ROE_decomposition: DuPont inputs provided: Net profit margin 7.83% × asset turnover 0.050 × financial leverage 1.09 = ROE ~0.43% for the quarter. Annualizing mechanically would still imply a low single-digit ROE unless asset efficiency improves or margins expand further. margin_quality: Gross margin at 24.5% and operating margin at 9.7% (¥37m/¥383m) reflect strong operating leverage and/or improved mix and cost controls. Ordinary margin of ~11.5% (¥44m/¥383m) indicates supportive non-operating items (e.g., financial income). Net margin of 7.83% confirms broad-based profit recovery. The tax expense of ¥6.95m suggests an approximate effective tax rate in the mid-teens if ordinary income is used as a proxy for pretax income, though exact pretax is undisclosed. operating_leverage: Operating income grew +160.9% YoY on a -3.1% revenue decline, implying substantial fixed-cost leverage and/or cost base optimization. Implied prior-year Q1 operating income was ~¥14.2m, so operating margin rose from roughly mid-3% to 9.7%.

Growth Assessment

revenue_sustainability: Revenue declined modestly to ¥383m (-3.1% YoY). The company appears to have preserved pricing and volume sufficiently to keep scale, but end-demand likely remains soft for precision tooling/machinery-related markets. profit_quality: Profit expansion is driven by margin improvement rather than top-line growth. Non-operating income contributed positively (ordinary > operating by ¥7m). The absence of cash flow data prevents validation of cash conversion this quarter. outlook: Key to sustaining earnings will be maintaining the improved gross and operating margins while stabilizing or re-accelerating sales as industrial demand normalizes. Order trends, utilization, and pricing discipline will be critical; any reacceleration in revenue would materially lift ROE given the lean cost base.

Financial Health

liquidity: Current assets ¥5,347m vs. current liabilities ¥108m → current ratio ~49.6x; working capital ~¥5,240m. Quick ratio is similarly strong given the lack of disclosed inventories. Liquidity is ample. solvency: Total liabilities ¥573m vs. equity ¥7,055m → debt-to-equity ~0.08x. Equity ratio (computed) ~91.6% (equity/total assets). Balance sheet risk is low with minimal leverage. capital_structure: Highly equity-funded with negligible financial leverage (assets/equity ~1.09x). While conservative, the low leverage and large asset base suppress ROE absent higher asset turnover or structurally higher margins.

Cash Flow Quality

earnings_quality: Operating, investing, and financing cash flows are undisclosed this quarter (zeros indicate not reported). As a result, OCF/NI and FCF-based corroboration of earnings quality cannot be assessed. FCF_analysis: Free cash flow is not available due to missing OCF and capex data. Depreciation is also undisclosed, preventing EBITDA/OCF triangulation. working_capital: Current assets are large relative to current liabilities, but the breakdown (cash, receivables, inventories) is not provided this quarter. Without inventory and receivables details, changes in working capital and their impact on OCF cannot be evaluated.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are not disclosed for the period. With net income of ¥30m in Q1, capacity for distributions would depend on full-year earnings and cash generation. FCF_coverage: Unavailable due to undisclosed OCF and capex. No conclusion can be drawn on FCF coverage. policy_outlook: Dividend policy is not provided in this release. Given the net-cash-like balance sheet and low leverage, the company has balance-sheet capacity, but visibility on ongoing payout requires management guidance and cash flow disclosure.

Risk Assessment

Business Risks:

• End-market cyclicality in machine tools/precision components leading to revenue volatility
• Pricing pressure from customers and competition affecting gross margin
• Raw material and processing cost fluctuations impacting cost of sales
• Potential customer concentration given niche product portfolio
• Execution risk in maintaining recent cost discipline and margin improvements
• FX exposure if exports or imported materials are material (not disclosed here)

Financial Risks:

• Low asset turnover and large asset base suppressing ROE
• Dependence on non-operating income to lift ordinary profits
• Limited visibility on cash conversion due to undisclosed cash flow statements
• Potential capex needs for equipment renewal not visible this quarter

Key Concerns:

• Sustainability of margin gains without revenue growth
• Lack of OCF/FCF disclosure impeding assessment of earnings quality and dividend coverage
• Very low quarterly ROE despite profit recovery due to asset intensity

Investment Implications

Key Takeaways:

• Notable profit recovery: operating income +160.9% YoY on modestly lower revenue
• Healthy margin profile in Q1: GP 24.5%, OPM 9.7%, NPM 7.83%
• Exceptionally strong balance sheet with equity ratio ~91.6% and D/E ~0.08x
• Low asset turnover (0.05x) keeps ROE modest at 0.43% for the quarter
• Non-operating gains supported ordinary income (¥44m vs. ¥37m operating)
• Cash flow and dividend data are undisclosed; monitoring future filings is essential

Metrics to Watch:

• Order intake/book-to-bill and revenue trajectory
• Gross and operating margin sustainability
• Ordinary income composition (recurring vs. one-off non-operating items)
• OCF, FCF, and capex once disclosed
• Asset turnover improvements (sales vs. asset base), inventory and receivable turns
• Effective tax rate clarity and any extraordinary items

Relative Positioning: Versus domestic precision component peers, A-One Seimitsu exhibits stronger balance sheet resilience (very high equity ratio, minimal leverage) and an improved margin profile this quarter, but lags on asset efficiency and consequently ROE; sustained margin discipline and recovery in sales are needed to close the ROE gap.

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
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