FURYU CORPORATION FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥21.48B
• Operating Income: ¥1.80B
• Net Income: ¥900M
• EPS: ¥42.51

Income Statement

Balance Sheet

Cash Flow Statement

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

Furyu (6238) reported FY2026 Q2 consolidated results under JGAAP showing resilient profitability despite essentially flat top-line. Revenue was ¥21.48bn, down 0.4% YoY, indicating a stable but not expanding demand environment. Gross profit was ¥8.55bn, translating to a robust gross margin of 39.8%, suggesting favorable mix and/or disciplined cost control. Operating income increased 37.6% YoY to ¥1.80bn, expanding the operating margin to roughly 8.4%, evidencing strong operating leverage in the period. Ordinary income was ¥1.78bn, close to operating income, reflecting minimal non-operating drag. Net income rose 25.1% YoY to ¥1.13bn, with a net margin of 5.24%, a solid improvement in bottom-line conversion despite flat sales. EPS was ¥42.51, but share count data were not disclosed, limiting per-share context beyond EPS. Cash generation was strong: operating cash flow (OCF) of ¥2.02bn was 1.80x net income, indicating high earnings quality. Liquidity is very strong, with a current ratio of 417.6% and quick ratio of 363.3%, supported by sizable current assets of ¥22.39bn versus current liabilities of ¥5.36bn. The balance sheet is conservative: total liabilities of ¥5.69bn against equity of ¥22.54bn imply low leverage (D/E 0.25x), and interest burden is negligible (interest expense ¥0.57m; coverage >3,000x). While an “equity ratio” of 0.0% was displayed, that is an unreported placeholder; based on reported totals, equity/asset ratio is approximately 81.5%, underscoring solvency strength. Investing cash flow was not disclosed and free cash flow is shown as zero due to unreported investing outflows, so capex intensity cannot be assessed from this dataset. Dividend data were also not disclosed (DPS and payout shown as zero are placeholders), preventing a direct payout assessment, although the earnings and OCF profile suggests capacity for distributions. DuPont analysis points to modest ROE of 4.99%, constrained mainly by low financial leverage (1.23x) and moderate asset turnover (0.777x), despite a reasonable net margin. The quarter’s key message is operational efficiency: meaningful operating profit growth and cash conversion in a flat revenue context. Overall financial health appears strong, with high liquidity, minimal financing costs, and ample equity. Data gaps (investing CF, cash balance, share count, dividend details) limit certain conclusions, but the available evidence supports a view of improved profitability, sound cash generation, and conservative capital structure in FY26 Q2.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 5.24%
• asset_turnover: 0.777
• financial_leverage: 1.23
• calculated_ROE: 4.99%
• interpretation: ROE of ~5.0% is primarily driven by moderate margins and asset turnover, with intentionally low leverage keeping risk low but capping return on equity. margin_quality:
• gross_margin: 39.8% (¥8.55bn GP on ¥21.48bn revenue)
• operating_margin: ≈8.36% (¥1.80bn OI on ¥21.48bn revenue), up YoY given +37.6% OI on flat sales
• net_margin: 5.24% (¥1.13bn NI on ¥21.48bn revenue)
• tax_rate_observation: Reported effective tax metric shows 0.0% (unreported). Based on income tax expense of ¥452m and ordinary income of ¥1.78bn as a proxy for pre-tax, effective tax is roughly 25–26%. operating_leverage: Significant positive operating leverage: revenue -0.4% YoY while operating income +37.6% YoY, indicating lower SG&A ratio and/or favorable mix. EBITDA margin is 13.4% (¥2.88bn EBITDA), supporting improved operating efficiency.

Growth Assessment

revenue_sustainability: Top-line was essentially flat at -0.4% YoY, suggesting stable demand but limited growth momentum this half. Sustainability depends on product mix (e.g., higher-margin content/merchandising) and seasonality in the back half. profit_quality: Profit growth outpaced sales due to operating efficiency. Gross margin of 39.8% and OCF/NI of 1.80 indicate that earnings are backed by cash generation, implying underlying quality rather than accounting-driven gains. outlook: If the company maintains current cost discipline and mix, operating margins could stay elevated even with modest sales growth. However, to drive ROE meaningfully higher, either stronger revenue growth or more efficient asset utilization will be needed. Data gaps (segment trends and capex) limit visibility on medium-term growth drivers.

Financial Health

liquidity:

• current_assets: ¥22.39bn
• current_liabilities: ¥5.36bn
• current_ratio: 417.6%
• quick_ratio: 363.3%
• working_capital: ¥17.03bn
• commentary: Very strong near-term liquidity with sizeable buffers against obligations. solvency:
• total_liabilities: ¥5.69bn
• total_equity: ¥22.54bn
• debt_to_equity: 0.25x
• interest_coverage: 3,162x (EBIT/interest; interest expense only ¥0.57m)
• equity_ratio_estimate: ≈81.5% (derived from reported totals; the 0.0% shown is an unreported placeholder)
• commentary: Low leverage and ample equity base indicate strong solvency and low financial risk. capital_structure: Predominantly equity-funded with minimal reliance on interest-bearing debt. Ordinary income closely tracking operating income suggests limited non-operating volatility.

Cash Flow Quality

earnings_quality: OCF of ¥2.02bn is 1.80x net income (¥1.13bn), indicating strong cash conversion and limited accrual risk in the period. free_cash_flow: Free cash flow cannot be determined because investing cash flows (and thus capex) were not disclosed; the zero shown is an unreported placeholder. working_capital_dynamics: Inventories of ¥2.91bn (≈13.6% of revenue) appear reasonable for the business model; however, receivables and payables details are not provided, constraining analysis of working capital drivers behind the strong OCF.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout ratio are shown as zero due to non-disclosure. Based on EPS of ¥42.51 and strong OCF, the company appears to have capacity, but actual policy and cash returns cannot be assessed from this dataset. FCF_coverage: Not assessable; free cash flow is not available due to missing investing cash flows. policy_outlook: Given low leverage and strong liquidity, the balance sheet could support distributions; however, without disclosed dividend policy, historical payout, or capex plans, sustainability and trajectory remain undetermined.

Risk Assessment

Business Risks:

• Revenue stagnation risk given -0.4% YoY sales and potential demand softness.
• Mix risk in content/IP and merchandise businesses, which can drive margin volatility.
• Hit-driven product cycle exposure across amusement prizes, character goods, and digital content.
• Inventory obsolescence risk if demand shifts or licensing cycles underperform.
• Seasonality risk impacting quarterly comparability and cash flows.
• Licensing/IP rights risk, including renewals and royalty cost variability.

Financial Risks:

• Working capital concentration (inventory and receivables) potentially affecting cash timing.
• Limited visibility on capex and investment needs due to unreported investing CF.
• Potential FX exposure on sourcing/overseas sales not disclosed in this dataset.
• ROE constrained by low leverage; inability to enhance asset efficiency could cap returns.

Key Concerns:

• Flat revenue trajectory; need for clearer growth catalysts.
• Data gaps: investing cash flows, cash balance, dividend details, and share count.
• Sustainability of recent margin gains if sales mix normalizes or costs rise.

Investment Implications

Key Takeaways:

• Strong operating leverage delivered +37.6% YoY operating income on flat sales.
• Healthy margins: 39.8% gross, ~8.4% operating, 13.4% EBITDA.
• High earnings quality with OCF/NI of 1.80 and minimal interest burden.
• Robust liquidity and low leverage (D/E 0.25x) underpin financial resilience.
• ROE of 4.99% is modest due to conservative leverage and moderate asset turnover.
• Limited visibility on capex and dividends due to unreported items.

Metrics to Watch:

• Revenue growth reacceleration and segment mix trends.
• Gross margin trajectory and SG&A ratio for sustaining operating leverage.
• OCF/NI and working capital turns, especially inventory and receivables.
• Capex and investing cash flows to assess true free cash flow.
• Dividend disclosures and capital allocation policy updates.
• Asset turnover improvements and any initiatives to lift ROE.

Relative Positioning: Within Japan small-mid cap entertainment/contents peers, Furyu appears conservatively financed with superior liquidity and low financial risk, but exhibits modest ROE and currently muted top-line momentum; near-term strength is driven by efficiency rather than growth.

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