| Metric | Current Period | Prior-year Period | YoY |
|---|---|---|---|
| Net Sales | ¥216.4B | ¥211.6B | +2.3% |
| Operating Income | ¥13.8B | ¥13.4B | +3.1% |
| Ordinary Income | ¥13.9B | ¥13.4B | +4.1% |
| Net Income | ¥9.6B | ¥8.5B | +0.6% |
| ROE | 6.2% | 5.8% | - |
FY2026 Q3 results delivered growth in both revenue and profit: Net Sales ¥216.4B (YoY +¥4.8B, +2.3%), Operating Income ¥13.8B (YoY +¥0.4B, +3.1%), Ordinary Income ¥13.9B (YoY +¥0.5B, +4.1%), and Net Income ¥9.6B (YoY +¥1.1B, +13.0%). While revenue growth was modest, Ordinary Income increased by 4.1% YoY, and bottom-line Net Income rose 13.0% YoY, marking double-digit growth. Gross Margin was 31.2%, flat YoY, and Operating Margin was 6.4%, indicating stable profitability. The full-year outlook calls for Net Sales of ¥300B (YoY +5.4%), Operating Income of ¥22.0B (YoY +16.8%), Ordinary Income of ¥22.0B (YoY +19.4%), and Net Income of ¥14.5B, suggesting continued profit growth.
[Profitability] ROE 6.0% (low relative to the prior-year actuals), Operating Margin 6.4%, and Net Margin 4.2%, all tracking stably. DuPont decomposition: Net Margin 4.2% × Total Asset Turnover 0.886x × Financial Leverage 1.59x, with the largest contribution from total asset efficiency. Tax Burden Coefficient 0.661 (effective tax rate 31.2%); Interest Coverage about 100x, indicating a very light interest burden. [Cash Quality] Cash and Deposits ¥20.1B; Cash/Short-term Liabilities 1.38x, suggesting limited short-term coverage capacity. Total Asset Turnover of 0.886x indicates relatively solid asset efficiency, but ROA remains at 3.9%. [Investment Efficiency] Total Asset Turnover 0.886x; Inventories ¥31.8B (approx. +15% YoY) with Working Capital at ¥91.9B, where inventory management impacts asset efficiency. Intangible Fixed Assets expanded to ¥2.9B, up +83.0% YoY. [Financial Soundness] Equity Ratio 63.0%, Current Ratio 253.0%, Quick Ratio 200.1%, indicating sound short-term solvency. Interest-bearing Debt ¥26.1B (Short-term Borrowings ¥14.5B; Long-term Borrowings ¥11.6B), with a Debt-to-Equity Ratio of 0.17x, reflecting a conservative stance. The Debt/Capital Ratio is 14.5%, within a healthy range, though the Short-term Debt Ratio of 55.6% reflects a concentration in short-term liabilities.
With no disclosure of Operating Cash Flow (OCF), we infer cash movements from BS trends. Cash and Deposits slightly decreased from ¥20.3B in the prior year to ¥20.1B in the current period, essentially flat. Current Assets expanded to ¥151.9B, with inventory increases pushing up Working Capital. Accounts Payable rose slightly to ¥17.0B (prior year ¥16.6B), indicating limited use of supplier credit. Cash coverage of short-term liabilities is 1.38x, securing liquidity; however, Short-term Borrowings of ¥14.5B comprise a significant share of current liabilities, warranting attention to refinancing risk. Long-term Borrowings expanded by 32.4% from ¥8.7B in the prior year to ¥11.6B in the current period, indicating terming-out of funding. Total Interest-bearing Debt stands at ¥26.1B, a healthy level relative to Net Assets of ¥153.7B; high interest coverage implies a light interest burden. Overall, while cash generation is supported by operating profit growth, inventory build-up is pressuring Working Capital, leaving room to improve capital efficiency.
Ordinary Income is ¥13.9B versus Operating Income of ¥13.8B, implying minimal non-operating items. Non-operating income mainly comprises interest and dividend income, immaterial relative to Net Sales. The 6.4% Operating Margin is slightly below the industry level; controlling the 24.9% SG&A ratio is key to profitability. The effective tax rate is 31.2%, standard relative to Profit Before Tax. Although the absence of OCF disclosure prevents direct verification of profit-to-cash conversion, high interest coverage and a light interest burden suggest the quality of recurring earnings is generally sound. However, the increase in inventories (+15% YoY) and the sharp rise in Intangible Fixed Assets (+83.0%) warrant monitoring as potential indicators of future amortization/impairment risk or expanding accruals.
[Positioning within Industry] (Reference information; in-house research) Profitability: The 6.4% Operating Margin is below the industry median of 7.3% (IQR: 4.5%–12.1%), indicating somewhat low profitability within the industry. The 4.2% Net Margin is also below the industry median of 5.2% (IQR: 3.4%–8.9%). ROE 6.0% is slightly above the industry median of 4.9% (IQR: 2.8%–8.3%), and ROA is above the industry median of 3.3% (IQR: 1.8%–5.1%), indicating relatively good asset efficiency. Soundness: The 63.0% Equity Ratio is in line with the industry median of 63.8% (IQR: 51.4%–72.5%), a standard level. The 2.53x Current Ratio is similar to the industry median of 2.65x (IQR: 1.99–3.56), indicating sound liquidity. The Net Debt/EBITDA multiple is low with Interest-bearing Debt of ¥26.1B, and compared with the industry median of -1.07 (IQR: -3.57–1.25), the debt burden relative to cash generation is light. Efficiency: Total Asset Turnover of 0.886x is relatively strong within the industry, indicating high asset utilization efficiency. Growth: Net Sales growth of +2.3% is roughly in line with the industry median of 2.8% (IQR: -1.0%–6.8%), representing standard growth. Overall, asset efficiency and financial soundness are at or above industry standards, but profitability metrics are mid-tier or below; improving margins is key to enhancing industry positioning. (Industry: Manufacturing (N=64 companies), comparison set: FY2025 Q3 period, source: in-house compilation)
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not constitute a recommendation to invest in any specific security. The industry benchmark is reference information compiled by our firm based on publicly available earnings data. Investment decisions are your own responsibility; consult a qualified professional as needed.