HIRATA (6258) FY2026 Q3 Earnings Report

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Executive Summary

The Company recorded substantial profit growth, driven by double-digit revenue growth, an improved gross margin, and the containment of SG&A expenses. Revenue was ¥69.12B (+10.9% YoY), Operating Income was ¥6.82B (+45.3%), Ordinary Income was ¥6.93B (+53.9%), and Net Income attributable to owners of the parent was ¥4.70B (+60.0%). The primary drivers of profit growth were higher revenue and profit in automotive-related operations and the return to profitability of other automated labor-saving equipment. The Operating Margin expanded to 9.9% from 7.5% in the same period of the previous year.

Factors Affecting Performance

【Revenue】Revenue was ¥69.12B, representing a +10.9% increase YoY. By segment, automotive-related operations remained the core business at ¥33.53B (48.5% of total revenue, +11.5% YoY), while semiconductor-related operations generated ¥24.47B (35.4%, +14.3%) and other automated labor-saving equipment generated ¥9.52B (13.8%, +2.2%). All segments achieved revenue growth.

【Profit and Loss】Operating Income increased +45.3% YoY to ¥6.82B, significantly exceeding the rate of revenue growth. The gross margin improved to 22.5% from 21.2% in the same period of the previous year, while the SG&A ratio declined to 12.6% from 13.6%, resulting in operating leverage. Segment profit in automotive-related operations was ¥4.47B (+66.2%, 13.3% margin), leading overall profit growth. In contrast, semiconductor-related operations recorded ¥1.69B (△33.4%, 6.9% margin), representing higher revenue but lower profit, while other automated labor-saving equipment turned from a loss in the same period of the previous year to a profit of ¥0.60B. Ordinary Income was ¥6.93B (+53.9%), and Net Income was ¥4.70B (+60.0%). The impact of non-operating and extraordinary gains and losses was minor, indicating that profit growth was driven by higher revenue and improved operating performance.

Segment Analysis

Automotive-related operations accounted for 65.5% of consolidated Operating Income and were the core segment, achieving both revenue and profit growth with the highest margin at 13.3%. Semiconductor-related revenue increased +14.3% YoY, while segment profit declined △33.4%, causing the margin to fall from 11.9% to 6.9%. This is presumed to reflect the impact of project mix and cost progress, contrasting with the other segments in terms of monetizing revenue growth. Other automated labor-saving equipment turned from a ¥0.53B loss in the same period of the previous year to a ¥0.60B profit, contributing to the improvement in the overall profit margin.

Key Financial Indicators

【Profitability】The Operating Margin of 9.9% and Net Profit Margin of 6.8% improved from 7.5% and 4.7%, respectively, in the same period of the previous year. The gross margin also increased to 22.5% from 21.2%. 【Cash Flow Quality】Annualized DSO was 161 days, DIO was 98 days, and CCC was 228 days, indicating a long working-capital cycle. Inventories increased +23.7% YoY, exceeding the rate of revenue growth. 【Investment Efficiency】Annualized ROE was 8.6%, and the total asset turnover ratio was 0.639x, with the improvement in profit margins offsetting the lack of growth in asset efficiency. 【Financial Soundness】The Equity Ratio was 50.2%, the current ratio was 184.4%, and cash and deposits of ¥27.25B were 2.0x short-term borrowings of ¥13.50B, securing short-term payment capacity. However, short-term borrowings increased +50.9% YoY, warranting monitoring of the trend.

Cash Flow Analysis

As cash flow statement data were not included in the disclosure, funding trends are analyzed based on changes in the balance sheet. Cash and deposits increased +111.5% YoY to ¥27.25B, while short-term borrowings also increased +50.9% YoY to ¥13.50B. Trade receivables (accounts receivable of ¥40.77B) and inventories (¥19.19B) both increased. In particular, inventory growth of +23.7% exceeded revenue growth of 10.9%. Contract liabilities increased substantially to ¥8.68B from ¥2.26B in the same period of the previous year, indicating an accumulation of advance funds associated with project progress. These figures suggest that, alongside profit growth, funds tied up in working capital have expanded. From the perspective of capital efficiency, it should be noted that the increase in cash was partly supported by increased borrowings.

Earnings Quality

Ordinary Income was ¥6.93B versus Operating Income of ¥6.82B, meaning that net non-operating income was limited to a profit of ¥0.11B, and dependence on non-operating income was low at 0.5% of revenue. Non-operating income included dividend income of ¥0.04B and foreign exchange gains of ¥0.08B, although both were limited in scale. Extraordinary income was ¥0.01B and extraordinary losses were ¥0.03B, resulting in a net loss impact of ¥0.02B. Their impact on Net Income of ¥4.70B was therefore limited and temporary. The difference between Ordinary Income and Net Income attributable to owners of the parent was primarily attributable to income taxes of ¥2.21B (effective tax rate of 32.0%). Profit growth can therefore be assessed as being led by the core business and supported by the expansion in Operating Income.

Earnings Forecast and Guidance

Progress against the Full-Year forecast was 72.0% for Revenue, 81.2% for Operating Income, 84.5% for Ordinary Income, and 82.5% for Net Income. There were no revisions to the earnings forecast or dividend forecast. Compared with the standard Q3 progress rate of 75%, Revenue was slightly below the benchmark, while all profit indicators exceeded it, indicating that margin improvement is progressing faster than planned. In Q4, ¥26.88B in revenue must be recognized to achieve the Full-Year revenue target of ¥96.00B, making progress in revenue recognition a key focus going forward.

Shareholder Returns

The Full-Year dividend forecast is ¥65.00 per share, while the Q2 dividend was ¥0. Based on forecast EPS of ¥184.11, the forecast Payout Ratio is approximately 35.3%, a level below the guideline for sustainability based solely on dividends. The estimated annual dividend amount using the average number of shares outstanding during the period is approximately ¥1.99B, representing only approximately one-third of the forecast Full-Year Net Income of ¥5.70B. As the status of share repurchases cannot be confirmed from this document, no assessment of the Total Return Ratio is provided.

Risk Factors

1. Deterioration in the profitability of semiconductor-related operations: Semiconductor-related revenue increased +14.3% YoY to ¥24.47B, while segment profit declined △33.4% to ¥1.69B, causing the margin to fall from 11.9% to 6.9%. Changes in project mix and cost progress could affect overall profitability going forward.

2. Prolonged working-capital cycle: Annualized DSO of 161 days, DIO of 98 days, and CCC of 228 days all exceed generally cautionary levels. Inventories increased +23.7% YoY, outpacing revenue growth, raising concerns about inventory accumulation and valuation risk in the event of project delays.

3. Dependence on short-term funding: The short-term debt ratio was 54%, and short-term borrowings increased +50.9% YoY to ¥13.50B. Although cash and deposits were maintained at 2.0x short-term borrowings, continued growth in borrowings should be monitored in conjunction with the funding environment.

Industry Benchmark (For Reference; Compiled by the Company)

Industry Benchmark (manufacturing)

Profitability and Returns

The Company's profitability metrics both exceeded the industry median, and its Operating Margin was positioned in the upper range of the IQR.

Growth and Capital Efficiency

The Revenue Growth Rate was substantially above the industry median and represented a high level of growth exceeding the upper bound of the IQR.

Source: Compiled by the Company

Key Takeaways from the Earnings

1. The Operating Margin expanded YoY to 9.9%. Profit growth was led by higher profit in automotive-related operations and the return to profitability of other automated labor-saving equipment, representing a structural factor supporting the improvement in the overall margin.

2. Semiconductor-related operations achieved higher revenue but lower profit, and their contribution to profit growth was limited compared with revenue growth of 10.9%. Whether the higher revenue can be monetized should be monitored in future quarters.

3. Annualized CCC of 228 days, DSO of 161 days, and DIO of 98 days indicate that the working-capital burden is expanding alongside profit growth. Together with the increase in short-term borrowings, the timing of cash generation and whether it keeps pace with profit growth will be key areas to monitor.

Theoretical Share Price (Reference Value)

Sensitivity: ¥2,209–¥2,337 at Cost of Equity ±1%, and ¥2,268–¥2,273 at ω±0.1.

Notes:

• As forecast ROE is below the Cost of Equity, the theoretical value is below Book Value per Share.
• Net assets as of the quarter-end are used (there is a timing gap relative to the Full-Year forecast).
• As net assets include non-controlling interests, the theoretical value may be calculated somewhat higher.

(Calculation model: Residual Income Model (Ohlson-type, explicit 5-year fade) / Interest rate reference month: 2026-07 / This is a mechanically calculated value based solely on publicly disclosed data and is not a forecast of the market share price or a recommendation of any specific investment action, nor does it predict or guarantee future share prices.)

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This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, after consulting professionals as necessary.

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