Gamecard Holdings,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥14.20B
• Operating Income: ¥3.61B
• Net Income: ¥4.42B
• EPS: ¥185.21

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

For FY2026 Q2 (consolidated, JGAAP), Gamecard Holdings reported revenue of ¥14.20bn, down 38.8% YoY, with operating income of ¥3.61bn (-40.2% YoY) and net income of ¥2.60bn (-41.3% YoY). Despite the sharp top-line contraction, profitability at the midstream level remains solid: the operating margin is approximately 25.4% and the net margin 18.3%, implying good cost control and a resilient pricing mix. Gross profit of ¥8.73bn and a gross margin of 61.5% indicate a high-value-added business model; however, the reported cost of sales line appears inconsistent with the gross profit and margin disclosures, so we rely on gross profit/margin as the more coherent anchors. Ordinary income of ¥3.87bn exceeds operating income, reflecting positive net non-operating contributions (likely interest and/or investment income), consistent with minimal reported interest expense of ¥2m and an exceptionally high interest coverage ratio of around 1,803x. The balance sheet is very strong: total assets are ¥68.05bn against total liabilities of ¥8.41bn, implying low leverage (liabilities/equity ≈ 0.14x) and a high equity buffer. Liquidity is ample, with current assets of ¥57.43bn versus current liabilities of ¥6.02bn, yielding a current ratio of ~9.5x and a quick ratio of ~7.9x; working capital stands at ¥51.41bn. Inventories of ¥10.10bn are material relative to the revenue run-rate, which warrants monitoring given the sharp YoY demand decline. DuPont metrics indicate ROE of 4.28%, driven by a high net margin but constrained by low asset turnover (0.209x) and modest financial leverage (1.12x). The tax line of ¥1.87bn implies an effective tax rate near the low-40% range when triangulated from net income and taxes, even though the “effective tax rate” metric is shown as 0.0% (likely unreported). Cash flow statements are not disclosed (zeros), so OCF/NI and FCF figures shown as 0 should be treated as unavailable rather than actual zeros. Dividend information is also unreported (DPS and payout shown as 0), so no conclusion can be drawn on distribution policy from this dataset alone. Overall, the company exhibits strong balance sheet resilience and healthy mid-cycle margins, but FY26 Q2 results reflect notable revenue compression and profit contraction. The low ROE is a structural outcome of low turnover and an overcapitalized balance sheet; improving asset productivity is a key lever for value creation. Near-term, the trajectory of orders and inventory normalization will be critical to gauge earnings durability into 2H and beyond. Data limitations (notably CFS, dividend details, and an inconsistent COGS line) constrain the depth of cash-flow-based assessment; conclusions below are based on available, non-zero disclosures and internally consistent metrics.

Profitability Analysis

ROE_decomposition: Reported ROE is 4.28%, decomposed as Net Profit Margin 18.29% × Asset Turnover 0.209 × Financial Leverage 1.12. The main constraint on ROE is low asset turnover, with leverage intentionally modest given the strong equity base. margin_quality: Gross profit of ¥8.73bn and a gross margin of 61.5% indicate strong value-add and pricing power; we treat the gross profit/margin figures as reliable anchors given inconsistency in the reported cost of sales line. Operating margin is ~25.4% (¥3.61bn/¥14.20bn), and ordinary margin ~27.3% (¥3.87bn/¥14.20bn), helped by net non-operating income. Net margin is 18.3%, robust despite the steep YoY revenue decline. operating_leverage: Operating income fell 40.2% YoY versus revenue down 38.8%, suggesting positive but not extreme operating leverage. Fixed-cost absorption likely weakened with the demand drop, but cost actions preserved a mid-20% OPM. Further revenue pressure would likely translate disproportionately to profits; conversely, a modest recovery could materially lift earnings.

Growth Assessment

revenue_sustainability: Revenue declined 38.8% YoY to ¥14.20bn, indicating a cyclical or project-driven downswing. The magnitude suggests end-market softness and/or timing effects in customer capex/order cycles. profit_quality: Margins remain strong (GM ~61.5%, OPM ~25.4%), implying product differentiation and disciplined cost control. Ordinary income above operating income signals recurring financial income or other non-operating gains, enhancing stability, though sustainability of such items should be monitored. outlook: With low asset turnover and elevated inventories, near-term growth hinges on order conversion and inventory normalization in 2H. If demand stabilizes, the company could leverage its cost base to recover earnings; however, visibility is limited given the lack of backlog disclosures here. We assume a gradual stabilization scenario absent new data.

Financial Health

liquidity: Current assets ¥57.43bn vs. current liabilities ¥6.02bn yield a current ratio of ~9.5x and a quick ratio of ~7.9x, indicating substantial liquidity buffers. Working capital is ¥51.41bn. solvency: Total liabilities are ¥8.41bn vs. equity of ¥60.61bn (liabilities/equity ≈ 0.14x), reflecting very low leverage and high solvency. Financial leverage in DuPont terms is 1.12x (assets/equity). capital_structure: Predominantly equity-funded with minimal interest-bearing obligations (interest expense ¥2m). Capacity for incremental debt is ample if needed, though current balance sheet implies no near-term necessity.

Cash Flow Quality

earnings_quality: Cash flow data are not disclosed in this dataset (OCF/NI shown as 0.00 should be treated as unavailable). Earnings quality inference relies on margins and working capital composition rather than CFS. FCF_analysis: Free cash flow is unreported. With strong profitability and low interest burden, underlying FCF potential is likely positive in steady-state, but the elevated inventory balance (¥10.10bn) could consume cash if demand weakens or if inventory turns slow. working_capital: Current assets are high relative to sales, with inventories at ~71% of quarterly revenue run-rate (¥10.10bn vs. ¥14.20bn for the half-year), suggesting execution risk around inventory turnover and order conversion. Any destocking would be a key swing factor for OCF.

Dividend Sustainability

payout_ratio_assessment: Dividend data (DPS and payout ratio) are not disclosed here; values shown as 0 should not be interpreted as actual payouts. With NI of ¥2.60bn in 1H and a very strong balance sheet, capacity for dividends appears ample structurally, but policy cannot be assessed from this dataset. FCF_coverage: FCF is unreported; coverage analysis is therefore not possible. In principle, strong liquidity and low leverage provide cushion, contingent on cash generation in 2H. policy_outlook: No guidance available. Historically, companies with this balance sheet profile target stable or progressive payouts, but we make no assumption without explicit disclosure.

Risk Assessment

Business Risks:

• Demand cyclicality and customer capex timing impacting order intake and revenue volatility
• Potential regulatory changes affecting gaming/amusement end-markets
• Customer concentration risk typical of niche B2B equipment/systems suppliers
• Product obsolescence and technology transition risk (hardware/software upgrades)
• Supply chain and component availability constraints affecting delivery schedules

Financial Risks:

• Inventory build (¥10.10bn) leading to working capital drag if sell-through slows
• Low asset turnover (0.209x) depressing ROE and returns on capital
• Profit sensitivity to revenue due to operating leverage in a down-cycle
• Foreign exchange exposure on components or overseas transactions (if applicable)

Key Concerns:

• Sharp YoY revenue decline (-38.8%) and profit contraction (-40% range)
• Inconsistent cost of sales disclosure vs. gross profit; reliance on margin data for analysis
• Unreported cash flow statements, limiting visibility on OCF and FCF
• Unknown dividend policy and distribution track record within this period

Investment Implications

Key Takeaways:

• Strong balance sheet with very low leverage (liabilities/equity ~0.14x) and ample liquidity (current ratio ~9.5x)
• Healthy underlying profitability despite downturn (OPM ~25.4%, NPM ~18.3%)
• ROE of 4.28% constrained by low asset turnover (0.209x) and conservative leverage (1.12x)
• Large inventory position relative to sales warrants close monitoring for cash conversion risk
• Non-operating income supports ordinary profit; durability should be assessed
• Data gaps on cash flows and dividends limit assessment of capital allocation and FCF profile

Metrics to Watch:

• Order intake/backlog and revenue trajectory in 2H
• Inventory turnover days and working capital intensity
• Gross and operating margin sustainability as volumes recover or weaken
• ROE drivers: asset turnover improvement and capital efficiency
• Ordinary income composition (recurring vs. one-off non-operating items)
• Any disclosures on dividend policy and payout intentions

Relative Positioning: Relative to peers in specialized gaming/amusement systems, the company appears financially conservative with superior liquidity and low leverage, solid margins, but lower ROE driven by subdued asset turnover; near-term positioning depends on demand recovery and working capital normalization.

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