Moriya Transportation Engineering and Manufacturing Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥10.78B
• Operating Income: ¥2.57B
• Net Income: ¥1.77B
• EPS: ¥100.68

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

Moriyasu (守谷輸送機工業株式会社) delivered a strong FY2026 Q2 standalone (JGAAP) result with clear operating leverage and solid profitability, albeit with weaker cash conversion in the period. Revenue rose 18.1% YoY to ¥10.78bn, while operating income surged 47.1% YoY to ¥2.57bn, indicating significant margin expansion. Gross margin was 25.5% and operating margin reached approximately 23.8%, underscoring good cost discipline and/or favorable mix and pricing. Ordinary income was ¥2.61bn and net income ¥1.77bn, translating to a reported net margin of 16.4%. DuPont ROE is 13.81%, driven by healthy margins (16.4%), moderate asset turnover (0.581x), and modest leverage (1.45x). The balance sheet appears robust with total assets of ¥18.54bn and total equity of ¥12.82bn, implying an equity ratio of roughly 69% based on disclosed balances, despite the reported “0.0%” equity ratio field. Liquidity looks strong with a current ratio of about 256%, supported by sizeable current assets of ¥12.73bn relative to current liabilities of ¥4.96bn. Operating cash flow was positive at ¥404m but only about 23% of net income, pointing to working capital drag and weaker cash realization in the period. Depreciation was modest at ¥83m, consistent with an asset-light production footprint or recent capex cycle, but investing cash flows were undisclosed, limiting free cash flow analysis. Financing cash flow was an outflow of ¥208m, suggesting some shareholder returns or debt reduction; however, dividends are shown as zero and payout ratio is indicated at 0%, which may reflect unreported interim data rather than policy. Interest expense was reported as zero and the interest coverage metric is not meaningful; effectively, financial risk from interest burden appears very low. The effective tax rate shown as 0.0% is inconsistent with the disclosed income tax charge; using ordinary income as a proxy for pre-tax yields an approximately 22.7% effective tax rate. Share count data are not disclosed (reported as zero), though EPS of ¥100.68 with net income of ¥1.77bn implies roughly 17.6 million shares outstanding; this is an inference. Several items (inventories, cash, investing CF, share data) are reported as zero due to non-disclosure, not true zeros; conclusions focus on available non-zero data. Overall, the company demonstrates strong profitability and balance sheet strength, tempered by low OCF conversion and data gaps that constrain full assessment of cash flow durability and dividend capacity.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 16.43
• asset_turnover: 0.581
• financial_leverage: 1.45
• calculated_ROE: 13.81
• commentary: ROE of 13.81% is primarily driven by a high net margin (16.4%) with moderate asset turnover and modest leverage. The profitability lever is the dominant contributor. margin_quality: Gross margin at 25.5% and operating margin at ~23.8% indicate strong cost control and/or improved mix/pricing. Ordinary margin is ~24.2% and net margin 16.4%. The gap between gross and operating margins is unusually small for a typical industrial manufacturer, suggesting low SG&A burden in the period and/or recognition timing benefits. operating_leverage: Revenue grew 18.1% YoY while operating income rose 47.1% YoY, evidencing strong operating leverage. This implies fixed-cost absorption and scale benefits. Sustainability will depend on order visibility and capacity utilization.

Growth Assessment

revenue_sustainability: Top-line growth of 18.1% YoY is robust for a capital goods/industrial context. Without order backlog disclosure, durability is uncertain, but the magnitude suggests healthy demand and project execution in the first half. profit_quality: Profit growth outpaced sales due to margin expansion. However, low OCF/NI (0.23x) tempers quality, implying working capital build or milestone-based revenue recognition ahead of cash collection. outlook: If demand conditions persist and cost discipline holds, operating margins may remain elevated; however, normalization of mix and working capital unwinding are key. Seasonality and project timing could make H2 earnings and cash flows more volatile.

Financial Health

liquidity: Current assets ¥12.73bn vs current liabilities ¥4.96bn yield a current ratio of ~256% and quick ratio effectively the same due to unreported inventories. This indicates strong near-term liquidity. solvency: Total liabilities of ¥5.70bn vs equity of ¥12.82bn imply liabilities/equity of ~0.45x and an equity ratio around 69% (despite the reported 0.0% flag). Leverage is conservative. capital_structure: Interest expense is disclosed as zero, suggesting minimal interest-bearing debt or negligible cost. Ordinary income covers any potential interest expense by a wide margin. Balance sheet conservatism provides flexibility for capex and dividends.

Cash Flow Quality

earnings_quality: OCF of ¥404m versus net income of ¥1,771m (OCF/NI 0.23x) indicates weak cash conversion this period, likely due to working capital investment (receivables or WIP on projects). FCF_analysis: Investing cash flows are undisclosed (reported as zero), preventing a reliable free cash flow calculation. EBITDA of ¥2.65bn provides capacity, but cash realization is currently lagging. working_capital: Large positive working capital (¥7.76bn) supports operations, but growth often requires incremental investment, which can suppress OCF in expansion phases. Monitoring receivables collection and advance payments is important.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are shown as zero; this likely reflects missing disclosure rather than policy. With EPS at ¥100.68, capacity for dividends exists, but without confirmed policy and FCF, sustainability cannot be judged. FCF_coverage: Not assessable due to missing investing cash flows; OCF of ¥404m would cover only a modest dividend outlay if maintained, but intra-year timing effects can be material. policy_outlook: Given conservative leverage and solid profitability, the company has room to consider distributions. However, absent explicit guidance and full cash flow data, we assume a cautious stance on dividend trajectory.

Risk Assessment

Business Risks:

• Project timing and milestone recognition risk affecting quarterly volatility
• Input cost inflation and pricing pass-through risk
• Supply chain constraints impacting deliveries and working capital
• Customer concentration risk typical in capital goods segments
• Cyclicality of capital expenditure in end markets

Financial Risks:

• Weak OCF conversion (0.23x NI) indicating working capital strain
• Potential receivables build and collection risk
• Limited visibility on cash and investing cash flows due to non-disclosure
• Tax rate variability versus implied ~22.7% effective rate

Key Concerns:

• Sustainability of unusually high operating margin (~23.8%)
• Cash flow lag behind earnings amid growth
• Data gaps (cash, inventories, investing CF, share data) constrain full analysis

Investment Implications

Key Takeaways:

• Strong top-line growth (+18.1% YoY) with pronounced operating leverage (+47.1% YoY OI)
• High profitability: 25.5% gross margin, ~23.8% operating margin, 16.4% net margin
• ROE of 13.8% driven mainly by margins, with modest leverage (1.45x assets/equity)
• Robust balance sheet: liabilities/equity ~0.45x; implied equity ratio ~69%
• Liquidity sound: current ratio ~256%
• Earnings-to-cash conversion weak this period (OCF/NI 0.23x)
• Investing CF unreported; FCF not ascertainable
• Interest burden negligible; effective tax rate implied ~22.7%
• Dividend information missing; capacity exists but sustainability unverified

Metrics to Watch:

• Order intake/backlog and book-to-bill
• Receivables days, advance receipts, and inventory (once disclosed)
• Operating cash flow and working capital movements
• Gross and operating margin trajectory (pricing vs cost trends)
• Capex and investing cash flows to gauge FCF
• Tax rate normalization and any changes in subsidies or one-offs

Relative Positioning: Compared with typical Japanese industrial machinery peers, the company exhibits above-average operating margins and a stronger balance sheet, but currently shows weaker cash conversion; overall profitability and leverage profile appear favorable relative to mid-cap peers, pending confirmation of cash flow sustainability.

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