| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥296.2B | ¥245.3B | +20.7% |
| Operating Income / Operating Profit | ¥44.4B | ¥31.9B | +39.2% |
| Ordinary Income | ¥46.6B | ¥31.4B | +48.1% |
| Net Income | ¥33.8B | ¥23.7B | +42.7% |
| ROE | 10.4% | 8.5% | - |
For the cumulative Q3 of FY2026 (Jul 2025–Mar 2026), Revenue was ¥296.2B (YoY +¥50.8B +20.7%), Operating Income was ¥44.4B (YoY +¥12.5B +39.2%), Ordinary Income was ¥46.6B (YoY +¥15.1B +48.1%), and Quarterly Net Income attributable to owners of the parent was ¥29.9B (YoY +¥9.4B +46.0%), achieving double-digit revenue and profit growth across top-line and all profit stages. Operating margin improved to 15.0% (up +2.0pt from 13.0% a year ago) and net margin to 10.1% (up +1.8pt from 8.3%), indicating marked profitability improvement. The core Parts Business generated Revenue of ¥226.5B (+23.5%) and Operating Income of ¥46.2B (+27.1%), driving consolidated results. Progress against the full-year plan is 74% for Revenue, 78% for Operating Income, 79% for Ordinary Income, and 80% for Net Income, exceeding the standard Q3 progress benchmark (75%), indicating a high probability of plan achievement.
[Revenue] Revenue of ¥296.2B (+20.7%) was led by the core Parts Business, which recorded Revenue of ¥226.5B (+23.5%), representing 76.5% of consolidated sales. By region: Japan ¥193.2B (prior ¥160.0B), China ¥64.1B (prior ¥44.0B), Thailand ¥29.6B (prior ¥32.9B), Other ¥9.3B (prior ¥8.5B), with notable growth in Japan and China. By segment: MachineryAndAppliances ¥54.9B (+9.7%), Die ¥17.0B (+6.8%), Rental ¥2.8B (+1.2%), with all segments securing revenue growth. The high growth of the Parts Business clearly led consolidated revenue expansion.
[Profitability] Cost of goods sold was ¥230.6B (prior ¥193.5B), yielding gross profit of ¥65.6B and a gross margin of 22.1% (up +1.0pt from 21.1% a year ago). SG&A was ¥21.1B (prior ¥19.9B, +6.3%), which was far below the gross profit growth (+26.6%), producing effective operating leverage and resulting in Operating Income of ¥44.4B (+39.2%) and an Operating Margin of 15.0% (up +2.0pt from 13.0%). Non-operating income included interest income ¥0.2B, dividend income ¥0.3B, and foreign exchange gains ¥1.2B (foreign exchange losses of ¥0.6B were recorded in non-operating expenses), totaling ¥2.3B of non-operating income; after subtracting non-operating expenses such as interest expense ¥0.2B, Ordinary Income was ¥46.6B (+48.1%). Extraordinary items were nearly offset: extraordinary gains ¥0.2B (gain on sale of investment securities ¥0.1B, gain on sale of fixed assets ¥0.1B) and extraordinary losses ¥0.2B (loss on retirement of fixed assets ¥0.2B), leaving Profit Before Tax ¥46.6B. Income taxes were ¥12.8B (effective tax rate 27.4%), and Net Income attributable to non-controlling interests was ¥3.9B, resulting in Net Income attributable to owners of the parent ¥29.9B (+46.0%). In summary, strong growth in the core Parts Business, gross margin improvement, and restrained SG&A growth produced operating leverage that drove higher revenues and profits.
The Parts Business maintained high profitability with Operating Income ¥46.2B (+27.1%) and a margin of 20.4%, serving as the primary source of consolidated Operating Income. The Machinery and Appliances Business recorded Operating Income ¥6.6B (+20.1%) with a margin of 12.0%; while growth is healthy, margins are in the high single-digit to low double-digit range. The Die Business posted Operating Income ¥2.5B (+45.1%) with a margin of 14.8%, showing significant year-on-year improvement. The Rental Business delivered Operating Income ¥0.7B (+10.0%) with a margin of 25.9%, small but highly profitable. Corporate adjustments were △¥11.6B (prior △¥12.3B), representing allocations for head-office costs and R&D, slightly lower than a year ago. Overall, Parts contributes the bulk of profit, while other segments’ steady profit growth supports expansion of consolidated margins.
[Profitability] Operating Margin 15.0% (prior 13.0%) and Net Margin 10.1% (prior 8.3%) show significant margin improvement. ROE 10.4% (exceeding prior 9.2%) is mainly driven by improved net margin. Gross Margin 22.1% (prior 21.1%) reflects product mix improvement and yield enhancement. SG&A Ratio 7.1% (prior 8.1%) shows SG&A growth of +6.3% lagging Revenue growth of +20.7%, demonstrating scale benefits. [Cash Quality] Days Sales Outstanding (DSO) is 101 days (Accounts receivable ¥81.5B ÷ Revenue ¥296.2B × 365 days × 9 ÷ 12), indicating a lengthening trend and suggesting delayed collections. Of Inventories ¥55.1B, Work in Process ¥27.2B accounts for 49.4% of inventories, raising concerns about retention due to production lead times and backlog response. [Investment Efficiency] Total Asset Turnover is 0.628x (Revenue ¥296.2B ÷ Total Assets ¥471.4B; prior 0.617x), a slight increase. Investment securities rose significantly to ¥61.6B (prior ¥25.7B, +139%), contributing to total asset growth. [Financial Soundness] Equity Ratio 68.9% (Net Assets ¥324.6B ÷ Total Assets ¥471.4B), Current Ratio 195% (Current Assets ¥231.9B ÷ Current Liabilities ¥118.9B), Interest-bearing debt ¥10.9B (Short-term borrowings ¥9.1B + Long-term borrowings ¥1.8B) against cash ¥81.4B resulting in net cash, and Interest Coverage 206x (Operating Income ¥44.4B ÷ Interest Expense ¥0.2B), indicating an extremely solid financial base.
Although the cash flow statement disclosure is unavailable, balance sheet movements indicate cash trends: Cash and deposits increased to ¥81.4B (prior ¥68.1B, +¥13.4B), short-term borrowings decreased to ¥9.1B (prior ¥12.7B, △¥3.6B), and long-term borrowings decreased to ¥1.8B (prior ¥5.8B, △¥4.0B), reducing interest-bearing debt. However, accounts receivable increased to ¥81.5B (prior ¥71.9B, +¥9.6B) and inventories rose to ¥55.1B (prior ¥43.0B, +¥12.1B), expanding working capital; longer collection periods and WIP retention associated with revenue growth are constraining cash conversion. Accounts payable increased to ¥77.1B (prior ¥58.1B, +¥19.0B), temporarily offsetting cash outflows through deferred supplier/outsourcing payments. Investment securities increased to ¥61.6B (prior ¥25.7B, +¥35.9B), reflecting active excess cash deployment that contributes to other comprehensive income but increases market exposure risk. Net Assets increased to ¥324.6B (prior ¥279.0B, +¥45.6B), supported by retained earnings accumulation and a large rise in valuation difference on available-for-sale securities of ¥39.8B (prior ¥15.0B), with total comprehensive income ¥61.0B largely driven by valuation items. The net cash position and reduced interest-bearing debt improve financial robustness, but working capital expansion and longer DSO are factors that constrain growth in Operating Cash Flow.
Recurring earnings quality is high: Operating Income ¥44.4B is primarily due to core business improvement, and non-operating income ¥2.3B (0.8% of sales) is minor, indicating low structural dependence on non-core items. Extraordinary gains ¥0.2B and extraordinary losses ¥0.2B nearly offset, so one-off items affect Net Income attributable to owners of the parent (¥29.9B) by less than 0.1%, i.e., negligible. Net foreign exchange impact was about ¥0.6B (non-operating FX gain ¥1.2B less FX loss ¥0.6B), approximately 1.4% of Operating Income ¥44.4B, not materially distorting core earnings. The gap between Ordinary Income ¥46.6B and Net Income ¥29.9B is attributable to income taxes ¥12.8B (effective tax rate 27.4%) and Net Income attributable to non-controlling interests ¥3.9B; tax burden is within a normal range. Comprehensive Income ¥61.0B exceeded Net Income ¥33.8B (parent + non-controlling) due to Other Comprehensive Income ¥27.2B (foreign currency translation adjustments ¥2.6B, valuation difference on available-for-sale securities ¥24.8B, etc.), indicating significant contribution from valuation items; while noteworthy, core business profits are steadily accumulating.
Full-year plan: Revenue ¥401.0B (+20.3%), Operating Income ¥56.7B (+32.1%), Ordinary Income ¥58.8B (+39.8%), Net Income attributable to owners of the parent ¥37.3B, EPS ¥259.82, Dividend ¥60. Progress of Q3 cumulative (9 months) results versus full-year plan is Revenue 74% (¥296.2B ÷ ¥401.0B), Operating Income 78% (¥44.4B ÷ ¥56.7B), Ordinary Income 79% (¥46.6B ÷ ¥58.8B), Net Income 80% (¥29.9B ÷ ¥37.3B), outperforming the standard Q3 progress benchmark of 75% across profit stages. If robust demand in the core Parts Business and gross margin improvements continue, the probability of achieving the full-year plan is high. No forecast revisions have been made as of Q3, but progress suggests an upward bias.
The interim dividend was ¥45, and the dividend payout ratio for Q3 cumulative Net Income attributable to owners of the parent ¥29.9B (on a share base of 14.36 million shares equals ¥208.01 per share) is approximately 22%, a low level. With a projected year-end dividend of ¥60, the annual total is expected to be ¥105, implying a payout ratio of about 40% against full-year Net Income forecast ¥37.3B (EPS ¥259.82), which is within a sustainable range. Given cash ¥81.4B, net cash position, and low interest cost (interest expense ¥0.2B), dividend payment capacity is ample. No share buyback information is available; shareholder returns are evaluated solely on dividends. Normalization of working capital (DSO reduction and WIP compression) would further expand the scope for future dividend increases.
Segment concentration risk: The Parts Business accounts for 76.5% of Revenue and the majority of Operating Income, making results sensitive to demand swings of major customers and market deterioration. Low portfolio diversification increases the risk of single-business exposure.
Working capital efficiency deterioration: DSO 101 days and WIP ratio 49.4% are above industry norms, pressuring the cash conversion cycle due to prolonged collection periods and long production lead times. Inventory quality deterioration (stagnation/obsolescence) or collection delays could lead to one-off charges or discount demands.
Valuation volatility risk of investment securities: Active deployment to investment securities (¥61.6B, +139% YoY) lifts comprehensive income but creates downside risk in market downturns via valuation losses and reduced net assets. Valuation difference on available-for-sale securities ¥39.8B represents 12.3% of net assets, increasing sensitivity to market volatility.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 15.0% | 8.9% (5.4%–12.7%) | +6.1pt |
| Net Margin | 11.4% | 6.5% (3.3%–9.4%) | +5.0pt |
Profitability is well above the industry median, positioning the company in the upper tier.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 20.7% | 2.8% (-1.5%–8.8%) | +17.9pt |
Revenue growth rate far exceeds the industry median, distinguishing the company as a high-growth firm.
※Source: Company aggregation
The core Parts Business drove high growth with Revenue +23.5% and Operating Income +27.1%, and an Operating Margin of 15.0% (6.1pt above the industry median 8.9%), indicating top-tier profitability within the manufacturing sector. Gross margin improvement of +1.0pt and restrained SG&A growth produced clear operating leverage, and the full-year progress rate (Operating Income 78%) is on an accelerated path.
The financial base is strong with Equity Ratio 68.9%, net cash ¥70.5B (Cash ¥81.4B − Interest-bearing debt ¥10.9B), and Interest Coverage 206x, supporting a sustainable payout ratio of 40% (full-year forecast basis). However, high DSO 101 days and WIP ratio 49.4% indicate room to improve working capital efficiency; normalization would further enhance cash generation and shareholder return capacity.
Aggressive increase in investment securities (+139%) boosts comprehensive income but raises the share of valuation differences to 12.3% of net assets, increasing sensitivity of net assets and comprehensive income to market movements. Core earnings quality is high and extraordinary items and FX impacts are minor; the business improvement is driving performance.
This report is an AI-generated financial analysis document automatically created by analyzing XBRL financial disclosure data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company based on public financial disclosures. Investment decisions are your responsibility; consult professional advisors as needed.