Meiko Electronics Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥111.49B
• Operating Income: ¥11.42B
• Net Income: ¥6.42B
• EPS: ¥359.99

Income Statement

Balance Sheet

Cash Flow Statement

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

Meiko (6787) reported solid FY2026 Q2 consolidated results under JGAAP, with clear operational improvement and disciplined cost control. Revenue rose 13.6% YoY to ¥111.5bn, indicating healthy demand momentum in its core businesses. Operating income increased 22.9% YoY to ¥11.4bn, outpacing sales growth and demonstrating positive operating leverage. Net income grew 48.3% YoY to ¥9.40bn, benefiting from stronger operating profit and a relatively light tax burden. Gross margin was 17.0% and operating margin 10.2%, reflecting improved mix and/or utilization, while EBITDA margin reached 15.8%, highlighting healthy earnings before non-cash charges. DuPont analysis shows ROE of 7.6% driven by an 8.43% net margin, asset turnover of 0.368x, and financial leverage of 2.45x. Balance sheet strength appears reasonable: total assets are ¥303.3bn with equity of ¥123.7bn, implying an equity ratio around 40.8% by calculation (despite the reported 0.0% placeholder) and liabilities/equity of 1.14x. Liquidity is adequate with a current ratio of 1.14x and quick ratio of 1.03x, suggesting manageable near-term obligations. Interest coverage is robust at 17.9x, indicating comfortable debt service capacity. Operating cash flow of ¥7.44bn equates to 0.79x of net income, implying moderate cash conversion; working capital movements likely weighed on OCF. Free cash flow cannot be robustly assessed because investing cash flow figures are unreported (shown as zero placeholders). Dividend details (DPS, payout) are not disclosed this period, preventing a payout sustainability assessment. Share data (outstanding/treasury shares) are also not disclosed, limiting per-share and capital policy analysis beyond EPS. Overall, the company exhibits improving profitability and a stable capital structure, while cash conversion and capex visibility remain key watchpoints. The outlook appears supported by revenue growth and margin resilience, but further clarity on investment plans, cash deployment, and end-market trends is necessary. Data limitations, especially in cash flow and equity-related disclosures, constrain the depth of certain analyses.

Profitability Analysis

ROE_decomposition: ROE 7.60% = Net Profit Margin 8.43% × Asset Turnover 0.368 × Financial Leverage 2.45. The improvement in operating income (+22.9% YoY) versus revenue (+13.6% YoY) indicates positive operating leverage contributing to ROE. margin_quality: Gross margin 17.0% (GP ¥18.93bn on ¥111.49bn sales) suggests improved cost discipline and/or better product mix. Operating margin 10.2% (OI ¥11.42bn) and EBITDA margin 15.8% (EBITDA ¥17.66bn) demonstrate healthy underlying profitability. Ordinary income (¥11.36bn) is close to operating income, implying limited non-operating drag; interest expense was ¥0.64bn. operating_leverage: Operating income growth (+22.9% YoY) outpaced revenue growth (+13.6% YoY), evidencing operating leverage benefits, likely from higher utilization, fixed-cost dilution, and mix improvements. Interest coverage is strong at 17.9x, reflecting earnings resilience.

Growth Assessment

revenue_sustainability: Revenue increased 13.6% YoY to ¥111.5bn, indicating steady end-market demand. The breadth of growth by segment/region is not disclosed, but the top-line trajectory suggests both volume and potential pricing/mix support. profit_quality: Net income rose 48.3% YoY to ¥9.40bn, significantly outpacing sales, aided by margin expansion and a relatively light tax burden. With ordinary income near operating income, earnings quality appears primarily operational rather than financial or one-off driven. outlook: Absent guidance, the current run-rate supports a constructive near-term view predicated on maintaining double-digit operating margins. Key to sustaining growth will be capacity utilization, order visibility in core applications, and FX/commodity cost dynamics. Further clarity on capex plans is needed to gauge medium-term growth capacity.

Financial Health

liquidity: Current assets ¥114.1bn vs current liabilities ¥100.3bn yields a current ratio of 1.14x and quick ratio of 1.03x (inventory ¥11.13bn), indicating adequate short-term liquidity. Cash and equivalents are undisclosed this period (zero shows unreported). solvency: Total liabilities ¥140.76bn and equity ¥123.70bn imply liabilities/equity of 1.14x and a calculated equity ratio near 40.8% (equity/total assets). Interest coverage of 17.9x suggests low near-term solvency risk. capital_structure: Financial leverage (assets/equity) stands at 2.45x, balanced for the industry. Funding mix details (debt type, tenor, currency) are not disclosed; however, positive financing cash flow suggests recent net borrowing or similar inflows.

Cash Flow Quality

earnings_quality: OCF/Net Income is 0.79x (¥7.44bn / ¥9.40bn), indicating moderate cash conversion, potentially reflecting working capital outflows or timing effects. Depreciation and amortization totaled ¥6.24bn, consistent with asset intensity. FCF_analysis: Free cash flow cannot be determined because investing cash flow is undisclosed (reported as zero placeholder). As such, FCF and FCF yield assessments are not possible this period. working_capital: Working capital is ¥13.86bn (current assets ¥114.11bn minus current liabilities ¥100.26bn). Inventory is ¥11.13bn; without average balances, turnover metrics cannot be assessed. The OCF shortfall versus net income suggests some working capital absorption.

Dividend Sustainability

payout_ratio_assessment: Dividend data (DPS, payout) are not disclosed this period (zeros are placeholders). With EPS of ¥359.99, a payout analysis cannot be performed reliably without confirmed DPS. FCF_coverage: FCF coverage of dividends cannot be evaluated due to unreported investing cash flows and undisclosed DPS. policy_outlook: No updates on dividend policy are available. Assessment will hinge on future disclosure of DPS, capex plans, and cash generation consistency.

Risk Assessment

Business Risks:

• End-market cyclicality affecting PCB demand (e.g., automotive, industrial, communications)
• Utilization risk and fixed-cost absorption impacting margins
• Supply chain and component/raw material price volatility
• FX fluctuations affecting both revenue and cost base given global operations
• Customer concentration risk typical in electronics supply chains

Financial Risks:

• Moderate leverage (liabilities/equity 1.14x) with potential refinancing and interest rate exposure
• Working capital intensity leading to OCF variability (OCF/NI 0.79x this period)
• Limited disclosure on cash balances and investing cash flows, constraining visibility on liquidity headroom
• Potential capex upcycle risk if growth requires significant investment, pressuring FCF

Key Concerns:

• Unreported cash and investing cash flow figures limit FCF and liquidity analysis
• OCF below net income suggests cash conversion sensitivity to working capital
• Dividend metrics undisclosed, preventing payout sustainability assessment

Investment Implications

Key Takeaways:

• Double-digit revenue growth (+13.6% YoY) with stronger operating profit growth (+22.9% YoY) evidences operating leverage
• Margins are solid: gross 17.0%, operating 10.2%, EBITDA 15.8%
• ROE 7.6% driven by improved profitability and moderate leverage (2.45x)
• Liquidity is adequate (current ratio 1.14x; quick ratio 1.03x) and interest cover is strong (17.9x)
• Cash conversion moderate (OCF/NI 0.79x); FCF not assessable due to missing investing CF
• Balance sheet is sound with calculated equity ratio around 40.8%
• Dividend and share data not disclosed, limiting capital return insight

Metrics to Watch:

• OCF/Net Income and working capital days (receivables, inventory, payables)
• Capex and investing cash flows to gauge FCF and capacity expansion
• Order visibility and backlog in key end-markets
• FX sensitivity and hedging effectiveness
• Debt composition (fixed vs floating, maturity ladder) and interest expense trend
• Sustained operating margin at or above 10%

Relative Positioning: Within Japan-listed PCB/electronic component peers, Meiko appears to be executing well on margin expansion and maintaining a balanced capital structure. However, disclosure gaps in cash/investing flows and dividends reduce visibility versus best-in-class peers with fuller transparency.

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