AIMECHATEC,Ltd. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥3.26B
• Operating Income: ¥93M
• Net Income: ¥-614M
• EPS: ¥6.33

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

Verdict: Top-line surged but profitability quality and capital efficiency were weak, with margin compression and unusual below-the-line items muddying earnings quality. Revenue rose 118.3% YoY to 32.63, while operating income increased 19.7% YoY to 0.93, indicating negative operating leverage. Operating margin was about 2.9% (0.93/32.63), implying a sharp decline from an estimated ~5.2% in the prior-year quarter, a compression of roughly 230–260 bps. Gross profit was 1.32 with a gross margin of 4.0%, an extremely thin level for capital goods, suggesting either low-margin mix or project pricing pressure. Ordinary income was 0.51 as non-operating expenses (0.31) outweighed non-operating income (0.05), pulling down earnings below operating level. Profit before tax is reported at -8.94, yet net income is positive at 0.39; this inconsistency suggests significant undisclosed special items or data mapping issues between ordinary income, special items, and tax. The effective tax is shown as -2.80 (tax income), but this still does not reconcile to positive bottom-line; treat net income as management’s anchor but note the discrepancy. ROE calculated is 0.4% with DuPont components: Net Margin 1.2%, Asset Turnover 0.114, and Financial Leverage 2.67x, highlighting extremely low profitability as the binding constraint. ROIC is 0.4%, well below a 5% warning threshold, flagging poor capital efficiency despite a healthy current ratio of 169.7%. Leverage is elevated with a D/E of 1.67x (total liabilities to equity), and short-term loans of 48 exceed cash of 36.17, pointing to some refinancing risk, albeit mitigated by ample current assets. Interest coverage is 6.64x, adequate for near-term debt service, but driven by small absolute EBIT that could be volatile. Cash flow data are unreported, preventing validation of earnings quality via OCF; this is a key limitation. Dividend details are unreported, but a calculated payout ratio of 725% implies potential unsustainability absent extraordinary cash sources. Forward-looking, the large revenue rebound needs to translate into margin recovery; otherwise, low ROIC and compressed OPM will constrain equity returns. Near-term focus should be on order backlog quality, mix normalization, and cost pass-through to restore gross and operating margins.

Profitability Analysis

ROE decomposition (DuPont): ROE ≈ Net Profit Margin (1.2%) × Asset Turnover (0.114) × Financial Leverage (2.67x) = ~0.4%. The largest adverse change appears in margin (operating margin ~2.9% vs an implied ~5.2% last year based on revenue and OI growth differentials), signaling negative operating leverage and pressure at gross margin level (reported 4.0%). Business drivers likely include: rapid revenue ramp with low-margin product mix or project timing, higher manufacturing and SG&A costs not yet absorbed, and increased non-operating expenses (interest and others) diluting ordinary income. Sustainability: without a shift to higher-margin shipments and better cost absorption, the current low margin profile is not sustainable for adequate returns; however, margins could normalize if mix improves and pricing catches up. Watch for SG&A growth relative to revenue; this quarter, revenue rose far faster than operating income, implying operating efficiency deterioration.

Growth Assessment

Revenue growth of +118.3% YoY signals strong demand recovery or backlog delivery, but profitability did not keep pace (+19.7% YoY OI), suggesting growth at low margins or early-cycle ramp costs. Ordinary income (+20.7% YoY) lagged revenue materially due to higher non-operating expenses. The 4.0% gross margin points to aggressive pricing, unfavorable mix, or temporary start-up costs; absent visibility on product/segment mix, sustainability is uncertain. Non-operating drag (net -0.26) and the discrepancy between PBT and NI introduce uncertainty on recurring earnings power. With ROIC at 0.4%, incremental growth is value-destructive unless margins improve. Outlook hinges on mix normalization, cost-down execution, and better non-operating discipline; monitor order intake, backlog quality, and price-cost dynamics.

Financial Health

Liquidity: Current ratio 169.7% and quick ratio 169.7% are healthy; no warning (<1.0) flags. Working capital is 98.92, providing cushion against short-term obligations. Solvency: D/E (total liabilities to equity) at 1.67x is above conservative benchmark (1.5x) but below high-risk threshold (2.0x); note elevated leverage. Interest-bearing debt split: short-term 48.00 and long-term 33.75; short-term debt exceeds cash (36.17), indicating some refinancing/maturity mismatch risk, albeit mitigated by sizable current assets (240.89). No off-balance sheet obligations were reported; lack of disclosure limits a full assessment. Equity base stands at 107.04, implying modest leverage capacity but constrained by weak returns.

Cash Flow Quality

Operating, investing, and financing cash flows are unreported, so OCF/Net Income and FCF cannot be assessed. With operating income small and non-operating expenses rising, earnings quality would normally be tested via working capital movements and cash conversion; these are unavailable. Interest coverage at 6.64x suggests manageable cash interest today, but small EBIT makes the buffer sensitive to margin volatility. Absent OCF, we cannot confirm whether earnings are supported by cash or by working capital swings; caution warranted. No signs of working-capital manipulation can be inferred given missing CF and balance detail (AR/inventories unreported).

Dividend Sustainability

Dividend data are largely unreported; however, the calculated payout ratio of 725.0% implies distributions far above earnings capacity if accurate. With FCF unreported and ROIC at 0.4%, dividend sustainability would be weak unless supported by non-recurring cash (asset sales) or balance sheet draw. Given short-term debt reliance and thin margins, conservative distribution policy would be prudent; monitor FY guidance and board policy updates for revisions in DPS. FCF coverage cannot be computed, representing a key data gap.

Risk Assessment

Business Risks:

• Margin compression: gross margin at 4.0% and OPM ~2.9% amid revenue surge suggests adverse mix or pricing pressure.
• Execution risk on ramp: rapid sales growth may carry start-up inefficiencies and under-absorbed fixed costs.
• Supply chain and input cost volatility potentially pressuring cost of sales and delivery schedules.
• Customer concentration or project concentration risk typical in capital equipment (not disclosed but plausible given volatility).

Financial Risks:

• Refinancing/maturity risk: short-term loans (48.00) exceed cash (36.17).
• Elevated leverage: D/E 1.67x above conservative benchmark, reducing flexibility if earnings soften.
• Earnings quality uncertainty: discrepancy between PBT (-8.94) and NI (0.39) and negative non-operating balance.
• Low ROIC (0.4%) indicating value-destructive growth unless margins recover.

Key Concerns:

• Data inconsistency between PBT, tax, and net income obscures true underlying profitability.
• Unreported cash flow statements limit validation of cash conversion and dividend capacity.
• Payout ratio (calculated at 725%) implies potential capital return misalignment with earnings.
• Sensitivity to interest costs: interest expense 0.14 with small EBIT makes coverage vulnerable to rate rises.

Investment Implications

Key Takeaways:

• Revenue rebound strong (+118.3% YoY) but profitability lagged (OI +19.7%), indicating negative operating leverage.
• Operating margin compressed to ~2.9%, with gross margin at a very low 4.0%.
• Non-operating expenses weighed on ordinary income; interest coverage is adequate at 6.64x but on small EBIT.
• ROE 0.4% and ROIC 0.4% flag poor capital efficiency; improvement in mix and pricing is essential.
• Liquidity is solid (CR 169.7%), but short-term borrowings exceed cash, requiring careful refinancing management.
• Dividend sustainability questionable given a calculated payout ratio of 725% and missing FCF data.
• Financials contain inconsistencies (PBT vs NI), limiting confidence in bottom-line trends.

Metrics to Watch:

• Order intake, backlog quality, and pricing to gauge margin recovery potential.
• Gross margin trajectory and SG&A as a % of sales for operating leverage normalization.
• OCF and FCF once disclosed; OCF/NI target >1.0 for quality confirmation.
• Net debt to equity and short-term debt coverage by cash and working capital.
• Non-operating income/expense trend, especially interest expense and any special items.
• ROIC vs WACC; aim for sustained ROIC >5% near term and >7–8% medium term.

Relative Positioning: Within precision equipment/capital goods peers, AIメカテック shows faster top-line growth this quarter but materially weaker margins and capital efficiency, placing it behind peers on profitability and ROIC despite acceptable liquidity.

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