Seibu Giken Co.,Ltd. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥21.64B
• Operating Income: ¥3.25B
• Net Income: ¥2.44B
• EPS: ¥120.21

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

Seibu Giken (TSE 62230) reported FY2025 Q3 (cumulative) results showing resilient profitability amid softer top-line trends under JGAAP on a consolidated basis. Revenue was ¥21.64bn, down 7.5% YoY, but operating income rose 11.5% YoY to ¥3.25bn, indicating meaningful margin expansion and effective cost control. Gross profit was ¥7.95bn, translating to a gross margin of 36.7%, which underpinned an operating margin of about 15.0%. Ordinary income was ¥3.21bn, broadly in line with operating income, reflecting minimal non-operating drag and very low interest expense (¥18m). Net income was ¥2.41bn, down 1.2% YoY, implying a net margin of 11.2% driven by tax effects and below-the-line items. DuPont analysis yields an ROE of 8.07%, decomposed into an 11.16% net margin, 0.463x asset turnover, and 1.56x financial leverage. The operating improvement despite revenue contraction suggests positive operating leverage from fixed-cost efficiency and/or a richer sales mix. Liquidity is strong, with current assets of ¥30.71bn and current liabilities of ¥11.67bn (current ratio 263%), supported by substantial working capital of ¥19.04bn. Solvency also appears robust: total liabilities are modest at ¥12.84bn against total equity of ¥29.91bn (D/E 0.43x). While reported “Equity Ratio” is shown as 0.0%, the balance sheet data imply equity comprises roughly 64% of total assets, indicating a conservative capital structure. Cash flow statement items are undisclosed in this dataset (zeros represent non-disclosure), limiting our ability to assess cash conversion and free cash flow. Dividend information (DPS, payout) likewise appears undisclosed here, so distribution policy cannot be inferred from this extract. Overall, the company demonstrates solid profitability, disciplined cost management, and a conservative balance sheet, but revenue softness and missing cash flow disclosures temper visibility on earnings quality. Looking ahead, order intake, backlog, and mix (not disclosed) will be key to gauging revenue normalization and the durability of margin gains. The company’s exposure to project timing and potentially cyclical end-markets suggests quarter-to-quarter volatility is possible despite the strong balance sheet.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 11.16%
• asset_turnover: 0.463
• financial_leverage: 1.56
• calculated_ROE: 8.07% margin_quality:
• gross_margin: 36.7%
• operating_margin: 15.0%
• ordinary_margin: 14.9%
• net_margin: 11.2%
• commentary: Operating margin expanded versus revenue decline (OI +11.5% YoY vs sales -7.5% YoY), indicating effective SG&A control and/or favorable mix. SG&A (implied) ≈ ¥4.70bn (~21.7% of revenue), consistent with disciplined overhead. Minimal interest burden (¥18m) preserves ordinary margin close to operating levels. The implied effective tax rate is ~20.8% (¥635m tax on ~¥3.05bn pre-tax), despite the reported metric showing 0.0% due to disclosure limitations. operating_leverage: Positive operating leverage evident: lower sales with higher operating income suggests fixed-cost absorption improvements and/or higher-margin product mix. Sustainability depends on volume recovery and maintaining pricing/mix.

Growth Assessment

revenue_sustainability: Revenue declined 7.5% YoY to ¥21.64bn, pointing to end-market softness and/or project timing effects. Without backlog/book-to-bill disclosure, visibility on near-term recovery is limited. profit_quality: Profit growth at the operating line (+11.5% YoY) despite revenue contraction implies mix/pricing and cost control tailwinds. Net income dipped 1.2% YoY, likely reflecting tax/other items; structurally, margins appear healthy. outlook: Near-term trajectory hinges on order intake in core applications (e.g., industrial dehumidification, battery-related drying/cleanroom solutions, and specialized industrial equipment). FX, capex cycles, and project phasing could drive volatility. Sustained double-digit operating margins are plausible if mix remains favorable and volumes stabilize.

Financial Health

liquidity:

• current_assets: 30710000000
• current_liabilities: 11667000000
• current_ratio: 263.2%
• quick_ratio: 206.2%
• working_capital: 19043000000
• commentary: Ample liquidity with significant buffer over short-term obligations. Inventories at ¥6.65bn represent a meaningful portion of current assets; turnover metrics are not disclosed. solvency_capital_structure:
• total_assets: 46696000000
• total_liabilities: 12837000000
• total_equity: 29907000000
• debt_to_equity: 0.43x
• implied_equity_ratio: ≈64.0%
• interest_coverage: 180.7x (on reported metrics)
• commentary: Low leverage and strong equity base support resilience. Interest burden is negligible, and the company appears well-positioned to weather cyclical swings.

Cash Flow Quality

earnings_quality: Cash flow data are undisclosed in this dataset (zeros indicate unreported). As such, OCF/NI and FCF conversion cannot be assessed. The high working capital base suggests monitoring of receivables and inventory is important for cash conversion. FCF_analysis: Free cash flow cannot be calculated without OCF and capex disclosure. Given low interest costs and solid margins, potential to generate positive FCF exists, but confirmation requires reported cash flows. working_capital_dynamics: Inventories at ¥6.65bn and substantial working capital (¥19.04bn) support operations but may tie up cash if demand softens. Absent turnover data, we recommend tracking days sales outstanding, days inventory, and order-to-cash cycle.

Dividend Sustainability

payout_ratio_assessment: Dividend data (DPS and payout) appear undisclosed here; EPS is ¥120.21. Without historical policy and cash flow data, payout sustainability cannot be judged from this extract. FCF_coverage: Not assessable due to undisclosed OCF/FCF. Balance sheet strength (low leverage, high liquidity) suggests capacity, but policy and cash conversion are the binding constraints. policy_outlook: If the company targets a stable or progressive dividend, maintenance would likely hinge on cash generation and order visibility. Monitor official guidance and shareholder return policies.

Risk Assessment

Business Risks:

• Exposure to cyclical capital goods demand and project timing in industrial/cleanroom/battery-related markets
• Mix volatility affecting margins (high-spec equipment vs. standard projects)
• Foreign exchange fluctuations impacting export competitiveness and translated earnings
• Supply chain constraints and input cost inflation (metals, specialty components) pressuring gross margin
• Customer concentration or large-project lumpiness leading to earnings volatility
• Technology shifts in battery/clean-energy sectors potentially altering equipment specifications and demand

Financial Risks:

• Working capital absorption in downcycles potentially weakening cash conversion
• Potential inventory write-down risk if demand softens sharply
• Project execution risk leading to cost overruns or acceptance delays
• Limited disclosed cash flow data reduces transparency on liquidity generation

Key Concerns:

• Revenue decline (-7.5% YoY) despite strong margins raises questions on demand trajectory
• Undisclosed cash flow statements prevent verification of earnings-to-cash conversion
• Dependence on end-market capex cycles and project phasing could sustain volatility

Investment Implications

Key Takeaways:

• Strong operating performance with margin expansion: operating margin ~15.0% and OI +11.5% YoY against sales -7.5% YoY
• Healthy ROE at 8.07% driven by solid net margins and conservative leverage
• Robust liquidity and low leverage (D/E 0.43x) provide financial flexibility
• Cash flow and dividend details are not disclosed here, limiting assessment of distributions and FCF
• Revenue softness and project cyclicality warrant close monitoring of orders and backlog

Metrics to Watch:

• Order intake, backlog, and book-to-bill ratio
• Gross margin sustainability and SG&A efficiency
• OCF/Net income and free cash flow conversion
• Inventory and receivables turnover (DIO, DSO) and working capital intensity
• Capex requirements and maintenance vs. growth split
• FX exposure and pricing power in export markets

Relative Positioning: Within Japanese industrial machinery peers, Seibu Giken exhibits above-average margins, conservative leverage, and strong liquidity, offset by near-term top-line softness and limited cash flow disclosure in this dataset.

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