SEMITEC Corporation FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥12.70B
• Operating Income: ¥1.91B
• Net Income: ¥1.61B
• EPS: ¥139.58

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

SEMITEC Co., Ltd. (TSE: 6626) reported FY2026 Q2 consolidated results under JGAAP showing resilient profitability with modest top-line softness. Revenue was ¥12.70bn, down 0.7% YoY, while operating income declined 10.3% YoY to ¥1.91bn, indicating some negative operating leverage. Gross profit of ¥4.99bn implies a solid gross margin of 39.3%, but the operating margin at 15.1% suggests higher SG&A or adverse mix versus the prior year. Net income was ¥1.46bn, down 9.2% YoY, translating to a net margin of 11.5% and EPS of ¥139.58. DuPont decomposition yields ROE of 6.36% driven by an 11.48% net margin, asset turnover of 0.422x, and low financial leverage of 1.31x. Balance sheet strength is notable: total assets of ¥30.11bn against total equity of ¥22.92bn implies an equity ratio of roughly 76.1% (the reported 0% is undisclosed, not zero). Liquidity is very strong, with a current ratio of 4.78x and quick ratio of 4.28x supported by ¥23.42bn in current assets and only ¥4.90bn in current liabilities. Cash generation is robust: operating cash flow (OCF) was ¥2.73bn, equivalent to 1.87x net income, indicating good earnings quality and likely working-capital tailwinds. Interest expense is minimal at ¥36m; interest coverage is a comfortable 52.5x based on operating income. The effective tax rate, inferred from reported taxes, is approximately 24–25%, despite a placeholder 0.0% in the summary metrics. Investment and cash balances are not disclosed in XBRL for this period, which limits free cash flow (FCF) precision and cash liquidity assessment; nonetheless, the operating cash profile and low leverage mitigate solvency concerns. With revenue slightly down and operating profit down more, cost discipline and mix management are key focus areas for the second half. Absent disclosed dividends, payout behavior cannot be confirmed, though the balance sheet could support distributions if the company so chooses. Overall, SEMITEC exhibits high-quality margins, strong liquidity, and low leverage, with near-term profit sensitivity to top-line fluctuations given the semi-fixed cost base.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 11.48% (¥1,458m / ¥12,696m)
• asset_turnover: 0.422x (¥12,696m / ¥30,111m)
• financial_leverage: 1.31x (Assets/Equity = ¥30,111m / ¥22,916m)
• calculated_ROE: 6.36% (matches reported)
• commentary: ROE is predominantly margin-driven; leverage is low and asset turns are moderate. Improvements in operating efficiency or asset utilization would have outsized impact on ROE given conservative leverage. margin_quality:
• gross_margin: 39.3% (¥4,989m / ¥12,696m) – strong for precision components/sensor manufacturing
• operating_margin: 15.1% (¥1,914m / ¥12,696m) – indicates sizable SG&A/R&D burden versus gross profit
• EBITDA_margin: 19.5% (¥2,477m / ¥12,696m)
• net_margin: 11.5% – supported by low interest burden; normalized tax evident (~24–25%) operating_leverage: Revenue declined 0.7% YoY while operating income fell 10.3% YoY, evidencing negative operating leverage and semi-fixed cost pressure. Maintaining gross margin at 39% helped cushion profit, but SG&A scaling appears less flexible. Focus on cost absorption, mix to higher-value products, and pricing discipline will be important to stabilize OPM near mid-teens.

Growth Assessment

revenue_sustainability: Top line was essentially flat (-0.7% YoY), suggesting stable demand but no growth catalyst in the half. Given modest asset turnover (0.422x), incremental revenue growth should translate into better ROE if operating leverage can be managed. profit_quality: Net income decline (-9.2% YoY) versus near-flat revenue indicates margin compression at the operating level. However, the strong gross margin and low non-operating drag (interest expense ¥36m) support underlying profit quality. outlook: Near-term growth hinges on mix (higher-margin applications), cost control, and utilization. If demand recovers even modestly, operating leverage can lift profits; conversely, further top-line softness could pressure OPM. External factors such as end-market inventory cycles and FX can influence both revenue and margin trajectory.

Financial Health

liquidity:

• current_ratio: 478.1% (¥23,416.8m / ¥4,897.4m)
• quick_ratio: 427.8% ((CA−Inventories) ¥20,951.5m / ¥4,897.4m)
• working_capital: ¥18,519.4m
• commentary: Very strong short-term liquidity with ample current assets relative to obligations. Cash balance is undisclosed, but the structure implies high near-cash holdings (receivables and deposits) and low reliance on short-term debt. solvency:
• total_liabilities: ¥7,971.1m
• debt_to_equity: 0.35x (Liabilities/Equity)
• interest_coverage: 52.5x (Operating income/Interest expense)
• equity_ratio: ≈76.1% (Equity/Assets). Note: the reported 0% is undisclosed, not zero.
• commentary: Conservative balance sheet with low leverage and strong coverage metrics; refinancing risk appears limited. capital_structure: Assets ¥30.11bn funded predominantly by equity (≈76%) with modest liabilities (≈24%). Balance sheet capacity exists for growth investments without materially stressing leverage.

Cash Flow Quality

earnings_quality: OCF/Net Income = 1.87x (¥2,732m / ¥1,458m), indicating high cash conversion. This likely reflects disciplined working capital and solid accrual quality. FCF_analysis: Investing cash flows are undisclosed this period; thus, FCF cannot be determined. EBITDA of ¥2,477m suggests capacity to fund maintenance capex, but the absence of capex data precludes precise FCF estimation. working_capital: Inventories at ¥2,465m are modest relative to current assets, implying limited inventory risk. Changes in receivables/payables are not disclosed; however, strong OCF suggests net working capital release or efficient collections.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout ratio are not disclosed (zeros are placeholders). Based on EPS of ¥139.58 and strong cash generation, capacity for dividends exists, but policy details are unavailable. FCF_coverage: FCF is not calculable due to undisclosed investing cash flows; hence FCF coverage of dividends cannot be assessed. policy_outlook: With low leverage and robust liquidity, the company could sustain distributions if instituted, but absent disclosures, assume a conservative stance focused on internal investment and balance sheet strength.

Risk Assessment

Business Risks:

• Demand fluctuations in key end-markets leading to operating leverage pressure
• Product mix shifts that could compress gross margin from the current 39% level
• Customer concentration risk typical in specialized components (not disclosed here)
• Supply chain and procurement cost variability affecting cost of sales
• FX volatility impacting export competitiveness and yen-translated results

Financial Risks:

• Limited disclosure on cash and investing flows reduces visibility on FCF and liquidity buffers
• Potential working capital swings that could tighten OCF in weaker demand periods
• Tax rate variability (estimated ~24–25%) affecting net margins
• Exposure to interest rate changes is low currently but could rise with future borrowing

Key Concerns:

• Negative operating leverage in the half (OP down 10.3% on revenue down 0.7%)
• Lack of disclosed capex/investing cash flows, obscuring FCF and reinvestment needs
• Dividend policy and share count details not disclosed; book value per share cannot be confirmed from filings

Investment Implications

Key Takeaways:

• Resilient profitability with strong gross margin (39.3%) and solid OPM (15.1%) despite slight revenue contraction
• High-quality earnings with OCF at 1.87x net income
• Very strong liquidity (current ratio 4.78x; quick ratio 4.28x) and low leverage (D/E 0.35x)
• ROE at 6.36% constrained by conservative leverage and moderate asset turnover; margin improvements or asset efficiency gains are primary ROE levers
• Data gaps on cash, capex, and dividends limit FCF and payout analysis

Metrics to Watch:

• Top-line trajectory and order trends to assess operating leverage in 2H
• Operating margin progression and SG&A ratio to revenue
• Capex and investing cash flows to determine true FCF
• Working capital turns (DSO, DIO, DPO) and inventory levels
• Tax rate normalization and non-operating gains/losses
• FX sensitivity and pricing/actions in key product lines

Relative Positioning: Financially conservative profile with strong liquidity and margins positions SEMITEC favorably versus many domestic peers in electronic components, though growth and ROE trail higher-turn peers absent operating leverage improvement.

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