AIRTECH JAPAN,LTD. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥10.63B
• Operating Income: ¥947M
• Net Income: ¥953M
• EPS: ¥94.32

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

Nihon Air Tech (6291) reported FY2025 Q3 (standalone, JGAAP) results with steady topline and stronger operating profitability. Revenue reached ¥10,635 million, up 7.9% YoY, indicating resilient demand across its clean air-related equipment and solutions. Gross profit was ¥2,582 million, implying a gross margin of 24.3%, which is solid for an engineered products/made-to-order mix. Operating income rose 11.6% YoY to ¥947 million, demonstrating positive operating leverage as opex grew slower than revenue. Ordinary income of ¥1,362 million exceeded operating income by approximately ¥415 million, suggesting material non-operating gains or financial income. Net income was ¥953 million (+5.9% YoY), translating to an 8.96% net margin. ROE is calculated at 6.45%, driven by an 8.96% net margin, 0.536x asset turnover, and modest 1.34x financial leverage. The current ratio stands at a robust 330% and quick ratio at 283%, supported by ¥11,866 million in current assets versus ¥3,598 million in current liabilities. Balance sheet strength is notable with total equity of ¥14,774 million against total assets of ¥19,848 million; this implies an equity ratio of roughly 74% despite the equity ratio field being undisclosed. Interest expense is minimal at ¥1.286 million, and interest coverage is exceptionally high at ~736x based on operating income. Dividend figures are not disclosed (DPS and payout appear as zeros), so capital returns cannot be assessed from the provided data. Cash flow statements are not disclosed in this dataset; hence operating and free cash flow metrics showing zero should be treated as missing, not actual values. With limited cash flow visibility, earnings quality must be inferred from margins and working capital structure. Inventory of ¥1,692 million suggests manageable working capital intensity for a project-oriented business, though cash conversion timing remains a watchpoint. Overall, fundamentals point to solid profitability, conservative leverage, and ample liquidity, but a portion of earnings is supported by non-operating items and cash flow data is unavailable. Outlook hinges on order intake momentum in core end markets (semiconductor, healthcare, and industrial clean environments), execution on projects, and input cost management.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 8.96% (NI ¥953m / Revenue ¥10,635m)
• asset_turnover: 0.536x (Revenue ¥10,635m / Assets ¥19,848m)
• financial_leverage: 1.34x (Assets ¥19,848m / Equity ¥14,774m)
• calculated_ROE: 6.45% (matches provided metric) margin_quality: Gross margin at 24.3% indicates healthy value-add in engineered solutions; operating margin is ~8.9% (¥947m/¥10,635m). The spread between ordinary income (¥1,362m) and operating income (¥947m) implies ~¥415m of non-operating profit, which boosts bottom-line profitability; recurring nature of this component should be scrutinized. Estimated effective tax rate is ~27–28% (Income tax ¥362m vs. pre-tax ≈ NI+tax ≈ ¥1,315m). operating_leverage: Revenue grew 7.9% YoY while operating income rose 11.6% YoY, evidencing positive operating leverage driven by fixed cost dilution and/or mix. This suggests incremental margins above the current operating margin, contingent on sustained volume and stable input costs.

Growth Assessment

revenue_sustainability: Topline growth of 7.9% YoY points to steady orders and execution across cleanroom-related products and services. Sustainability will depend on capex cycles in semiconductors/electronics and healthcare/pharma demand for contamination control. profit_quality: Core profitability improved, but a material portion of earnings derives from non-operating items (ordinary > operating by ~¥415m). Net income growth (+5.9% YoY) lagged operating income growth (+11.6% YoY), potentially reflecting normalization of non-operating gains and/or tax effects. outlook: With strong liquidity and low leverage, the company appears positioned to pursue orders without balance sheet strain. Near-term growth hinges on order backlog conversion, project timing, and cost pass-through. Mix upgrades (higher-margin units/services) could support margins, while any slowdown in semiconductor or hospital investment would be a headwind.

Financial Health

liquidity: Current assets ¥11,866m vs. current liabilities ¥3,598m yields a current ratio of ~330% and quick ratio of ~283%, indicating ample short-term coverage. Working capital is ¥8,268m, providing a sizeable buffer for project execution. solvency: Total equity ¥14,774m vs. total assets ¥19,848m implies an approximate equity ratio of ~74% (reported field undisclosed). Debt burden is low; interest expense is only ¥1.286m, and total liabilities/equity is ~0.29x. capital_structure: Leverage is modest at 1.34x assets/equity. Interest coverage is ~736x on operating income, underscoring de minimis financial risk under current earnings power.

Cash Flow Quality

earnings_quality: Cash flow statements are not disclosed in the dataset provided; OCF/NI and FCF shown as zero should be treated as missing. Earnings quality is inferred from stable gross/operating margins and limited interest burden. The gap between ordinary and operating income suggests some reliance on non-operating items. FCF_analysis: Without OCF and capex disclosure, FCF cannot be quantified. Given the business model, working capital timing (receivables and inventory swings around project milestones) likely drives cash conversion volatility. working_capital: Inventories of ¥1,692m (≈16% of YTD revenue proxy) appear manageable; strong current and quick ratios suggest adequate liquidity to support WIP and receivables. Monitoring receivable days and build-to-order backlog conversion remains key.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are undisclosed in this dataset (zeros indicate missing). Based on net income of ¥953m and robust balance sheet, capacity for distributions appears present, but actual policy and payout level cannot be assessed here. FCF_coverage: Not assessable due to missing OCF and capex data; consequently, FCF coverage of dividends cannot be calculated. policy_outlook: Absent disclosed DPS, we assume a conservative stance pending visibility into cash generation and capital allocation priorities (capex, R&D, and potential working capital needs).

Risk Assessment

Business Risks:

• Cyclical demand tied to semiconductor/electronics capex and healthcare/pharma facility investments
• Project timing and acceptance risk impacting quarterly revenue and margin recognition
• Input cost inflation (steel, specialized components, filters) and pricing pass-through risk
• Supply chain constraints extending lead times for critical components and fans/filters
• Competitive pricing pressure in standard units vs. differentiation in engineered systems
• Aftermarket/service mix variability impacting margins

Financial Risks:

• Earnings reliance on non-operating income (ordinary income > operating income by ~¥415m)
• Cash conversion volatility due to working capital swings in project business
• Limited disclosure of cash flow statements impedes assessment of OCF sustainability
• Single-entity (non-consolidated) reporting may omit risks at subsidiaries or affiliates, if any

Key Concerns:

• Sustainability and nature of non-operating gains supporting ordinary income
• Visibility on order backlog and pipeline in cyclical end-markets
• Potential squeeze from input cost inflation if pricing power weakens

Investment Implications

Key Takeaways:

• Revenue up 7.9% YoY to ¥10,635m with operating income up 11.6% YoY, indicating positive operating leverage
• Solid gross margin (24.3%) and operating margin (~8.9%) with robust liquidity (current ratio ~330%)
• ROE at 6.45% driven by high net margin but tempered by modest asset turnover and low leverage
• Ordinary income exceeds operating income by ~¥415m, highlighting non-operating contribution to earnings
• Balance sheet conservative with implied equity ratio ~74% and minimal interest burden

Metrics to Watch:

• Order intake and backlog conversion to sustain revenue growth
• Operating margin trajectory and gross margin resilience amid input cost changes
• Composition and recurrence of non-operating income within ordinary income
• Working capital metrics (receivable days, inventory turns) and OCF once disclosed
• Capex needs and any shift in capital allocation/dividend policy disclosure

Relative Positioning: Within Japan industrial/clean-environment equipment peers, the company exhibits above-average balance sheet strength and solid margins, with ROE in a mid-single-digit range constrained by modest asset turnover; earnings quality would be stronger with a greater share of operating vs. non-operating profit and clearer cash flow disclosure.

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