| Indicator | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥4482.5B | ¥2475.7B | +81.1% |
| Operating Income | ¥192.4B | ¥135.7B | +41.7% |
| Ordinary Income | ¥246.4B | ¥147.8B | +66.8% |
| Net Income | ¥116.2B | ¥66.9B | +73.7% |
| ROE | 7.7% | 4.8% | - |
For the fiscal year ended March 2026, Revenue was ¥4,482.5B (YoY +¥2,006.8B +81.1%), Operating Income was ¥192.4B (YoY +¥56.7B +41.7%), Ordinary Income was ¥246.4B (YoY +¥98.6B +66.8%), and Net Income was ¥116.2B (YoY +¥49.3B +73.7%), representing significant top- and bottom-line growth. Revenue nearly doubled year-on-year due to the rapid expansion of the ElectroMechanical Components business, while gross margin contracted to 6.5% (down -2.9pt from 9.4% a year earlier) and operating margin compressed to 4.3% (down -1.2pt from 5.5%). Ordinary-level profit growth (+66.8%) outpaced operating profit growth (+41.7%) largely due to foreign exchange gains of ¥41.8B (¥0.5B in the prior year). Net Income growth (+73.7%) absorbed special losses of ¥17.6B, and EPS reached ¥322.65 (prior year ¥194.76, +65.7%). Total assets were ¥2,152.8B (YoY +7.5%), total equity was ¥1,502.4B (YoY +7.1%), and Equity Ratio was 69.8% (prior year 70.1%), indicating a solid financial base.
【Revenue】Revenue of ¥4,482.5B (+81.1%) was driven by the flagship ElectroMechanical Components segment, which recorded ¥4,142.8B, a surge of +94.9% YoY, accounting for 92.4% of consolidated revenue. In contrast, Acoustic Components declined to ¥194.3B (-7.5%) and Applied Equipment And Others was ¥145.3B (+3.6%), widening growth dispersion across segments. Revenue growth reflected large contract wins and product cycle progression, but cost of sales ratio rose to 93.5% (prior year 90.6%), pushing gross margin down to 6.5% (prior year 9.4%, -2.9pt). This resulted from a combination of rising raw material costs, product mix shifts toward lower-margin products, and pricing competition.
【Profitability】Gross profit was ¥291.7B (+26.0%) while SG&A was tightly controlled at ¥99.3B (+3.7%), allowing operating leverage to work positively. Consequently, Operating Income rose to ¥192.4B (+41.7%), though operating margin fell to 4.3% (prior year 5.5%, -1.2pt). At the ordinary level, non-operating income of ¥54.6B included foreign exchange gains of ¥41.8B (equivalent to 21.7% of Operating Income), which significantly boosted Ordinary Income to ¥246.4B (+66.8%), outpacing operating-level growth. Special losses totaled ¥17.6B (impairment losses ¥9.1B, valuation loss on investment securities ¥1.0B, etc.), resulting in profit before income taxes of ¥228.9B (+60.9%). After income taxes of ¥66.9B, Net Income was ¥116.2B (+73.7%). Comprehensive income was ¥174.2B, with a ¥58.0B difference from Net Income that included valuation difference on available-for-sale securities ¥12.9B, foreign currency translation adjustments -¥3.6B, and retirement benefit adjustments ¥2.8B. In summary, the company achieved large revenue expansion and ordinary-level profit growth aided by FX gains, but core margin deterioration and one-off costs indicate room for profitability improvement.
ElectroMechanical Components posted Revenue ¥4,142.8B (+94.9%), Operating Income ¥169.7B (+58.7%), and a margin of 4.1%, becoming the overwhelmingly dominant business with 92.4% of revenue and 88.2% of operating income. Growth was driven by expanded shipments of connectors, jacks, switches, etc., to major customers, but margins remained low at 4.1% with cost and pricing challenges. Acoustic Components recorded Revenue ¥194.3B (-7.5%), Operating Income ¥15.9B (-14.3%), and margin 8.2%; weaker demand for microphones and headphones led to declines, although margin remained the highest among segments. Applied Equipment And Others reported Revenue ¥145.3B (+3.6%), Operating Income ¥6.8B (-34.1%), and margin 4.6%—slight revenue growth but significant profit decline, revealing deteriorating cost structure. The portfolio is highly concentrated in ElectroMechanical Components, making overall performance sensitive to that segment’s market and customer trends.
【Profitability】Operating margin 4.3% (down -1.2pt from 5.5%), Net margin 2.6% (down -0.1pt from 2.7%), driven primarily by a decline in gross margin to 6.5% (down -2.9pt from 9.4%). ROE 7.7% improved from 5.0% a year earlier, supported by a notable increase in total asset turnover to 2.08x (prior year 1.24x) and financial leverage of 1.43x, offsetting the slight drop in net margin. The jump in asset turnover reflects the ability to grow revenue (+81.1%) with only a +7.5% increase in total assets, but structural gross margin deterioration caps profitability upside. 【Cash Quality】Operating Cash Flow was ¥345.4B, 2.97x Net Income of ¥116.2B, indicating very high cash quality. OCF/EBITDA was 1.44x, accrual ratio was -8.5%, showing strong cash conversion, aided by inventory reduction of ¥40.5B and receivables collection of ¥66.2B improving working capital. With depreciation of ¥48.1B and capital expenditure of ¥75.5B, the CapEx/Depreciation ratio was 1.57x, indicating investment beyond maintenance to enhance capacity. 【Investment Efficiency】Total asset turnover 2.08x rose sharply from 1.24x, achieving revenue growth efficiently relative to asset increase. However, sustainment of revenue growth may be partly cyclical given next-year guidance (Revenue -2.7%). 【Financial Soundness】Equity Ratio 69.8% (prior year 70.1%), current ratio 370.9%, quick ratio 355.2% indicate very strong liquidity and solvency. Cash and deposits ¥776.9B versus short-term borrowings ¥10.5B yields a cash/short-term liabilities ratio of about 74x, Debt/EBITDA 0.04x, and interest coverage 427x (Operating Income / interest expense), reflecting minimal debt burden.
Operating Cash Flow was ¥345.4B (improved +¥527.7B from prior year -¥182.3B), reaching 2.97x Net Income of ¥116.2B. Starting from profit before tax ¥228.9B, adding non-cash charges such as depreciation ¥48.1B and impairment losses ¥9.1B generated an operating cash subtotal of ¥364.5B. A notable feature was a large working capital inflow: inventory decreased ¥40.5B (prior year increase -¥401.7B) and trade receivables decreased ¥66.2B (prior year increase -¥100.3B). Conversely, trade payables decreased ¥14.4B (prior year increase ¥209.1B), and corporate tax payments were ¥29.8B (prior year ¥56.2B). Investing Cash Flow was -¥63.8B (prior year -¥59.3B), mainly due to capital expenditures of -¥75.5B (prior year -¥62.6B); the buildup of construction in progress ¥21.3B suggests capacity expansion. Financing Cash Flow was -¥86.4B (prior year -¥53.1B), driven by dividend payments -¥33.1B, share buybacks -¥42.0B, and net repayment of short-term borrowings ¥10.5B. Free Cash Flow was ¥281.6B (Operating CF ¥345.4B - Investing CF ¥63.8B), ample to cover dividends ¥33.1B and share buybacks ¥42.0B totaling ¥75.1B, with the remainder used to increase cash holdings. Cash and equivalents increased from 46,769 百万円 at the beginning of the period to 66,050 百万円 at the end of the period, an increase of ¥19.28B (after deducting FX impact -¥0.24B the increase was ¥19.52B), materially improving liquidity. The working capital drawdown (inventory and receivables declines) drove operating cash inflows; caution is warranted regarding reversal risk (inventory buildup or receivables increases) in subsequent periods.
Core earnings center on Operating Income ¥192.4B, but non-operating income ¥54.6B included foreign exchange gains ¥41.8B (equivalent to 21.7% of Operating Income), materially contributing to Ordinary Income ¥246.4B. FX gains were a temporary benefit from yen depreciation and carry high volatility risk with exchange rate movements. Special losses ¥17.6B (impairment losses ¥9.1B, valuation losses on investment securities ¥1.0B, loss on disposal of fixed assets ¥0.3B, etc.) amounted to about 15.1% of Net Income ¥116.2B and compressed Net Income as a one-off. Operating CF ¥345.4B / Net Income ¥116.2B = 2.97x, and Operating CF ¥345.4B / EBITDA ≈ ¥240B (Operating Income ¥192.4B + Depreciation ¥48.1B) = 1.44x, indicating strong cash backing, and accrual ratio -8.5% (Net Income - Operating CF) is favorable. The ¥130.2B gap between Ordinary Income ¥246.4B and Net Income ¥116.2B is largely explained by tax expense ¥66.9B and special losses ¥17.6B totaling ¥84.5B; the ¥58.0B difference to comprehensive income ¥174.2B includes unrealized gains/losses such as valuation differences on securities. Quality of earnings shows scope for improvement at the operating level due to cost and pricing issues, and evaluation of underlying earnings excluding one-off non-operating and special items is important.
Full Year guidance is Revenue ¥4,360.0B (YoY -2.7%), Operating Income ¥180.0B (YoY -6.4%), Ordinary Income ¥180.0B (YoY -27.0%), EPS forecast ¥253.90, and dividend forecast ¥39.00, projecting a decline in revenue and profit. The planned decline versus the current year likely factors in a reduction in FX gains (implying a significant decline in Ordinary Income), normalization of product mix, and conservative assumptions on price and cost environment. Progress toward the annual Operating Income target is 192.4/180.0 = 106.9%, already exceeding the full-year forecast, and the company may be incorporating expectations of demand slowdown or changes in FX assumptions toward year-end. Progress for Ordinary Income is 246.4/180.0 = 136.9%, substantially ahead, suggesting guidance assumes erosion of FX gains. Key focuses for the next period are whether operating-level margin improvement (recovery in gross margin and maintenance of SG&A efficiency) can be achieved as FX contribution declines, and whether growth in the core ElectroMechanical Components segment can be sustained.
Annual dividend was ¥98 (interim ¥25, year-end ¥73). Based on Net Income ¥116.2B and approximately 49.2 million shares outstanding at period-end excluding treasury stock, total dividend amount is approximately ¥4.82B; the actual dividend cash outflow was ¥3.31B (CF basis), producing a calculated payout ratio of 30.1% (per XBRL financial metrics). Next-year dividend guidance is ¥39, implying a payout ratio of 15.4% versus EPS forecast ¥253.90, materially lower than the current year, reflecting a conservative stance in light of expected earnings decline. Share buybacks of ¥4.20B were executed, and combined with dividends ¥3.31B total shareholder returns were ¥7.51B, corresponding to a total return ratio of about 64.6% relative to Net Income ¥116.2B. The coverage of total returns ¥7.51B by Free Cash Flow ¥281.6B is 3.75x, indicating very high sustainability. With cash and deposits ¥776.9B and robust Operating CF ¥345.4B, the company has a financial base that supports both dividend stability and flexibility in share buybacks.
Business Concentration Risk: The ElectroMechanical Components segment accounts for 92.4% of revenue and 88.2% of operating income, creating very high dependency on specific businesses, customers, and products. Market fluctuations or demand declines among key customers in that segment would directly impact consolidated performance. Portfolio diversification is insufficient; Acoustic Components is in decline and Applied Equipment And Others is also down in profitability and cannot currently provide sufficient offset.
Low Margin / Low Profitability Risk: Gross margin 6.5% (down -2.9pt from 9.4%) and operating margin 4.3% (down -1.2pt from 5.5%) indicate low profitability and vulnerability to raw material cost increases and price competition. If revenue growth does not translate adequately into profit growth and structural margin improvements (yield improvement, product mix normalization, price pass-through) are not realized, sustainable profit growth will be difficult.
FX Dependence Risk: FX gains ¥41.8B represent 21.7% of Operating Income and materially contributed to Ordinary Income formation. A reversal in exchange rates (yen appreciation) would reduce non-operating income and could compress ordinary-level profits materially. The guidance for Ordinary Income (-27.0%) suggests a change in FX assumptions; these dynamics underscore risk that core business strength alone may not sustain growth.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 4.3% | 7.8% (4.6%–12.3%) | -3.5pt |
| Net Margin | 2.6% | 5.2% (2.3%–8.2%) | -2.6pt |
Profitability metrics lag industry medians, with the low-gross-margin structure indicating competitive disadvantage within the industry.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 81.1% | 3.7% (-0.4%–9.3%) | +77.4pt |
Revenue growth far exceeds the industry, but likely contains cyclical factors and the company forecasts revenue decline next year.
※Source: Company compilation
Scale expansion and strong cash generation: Large revenue growth of +81.1% and Operating CF ¥345.4B (2.97x Net Income) and Free CF ¥281.6B generated ample funding to support business expansion and strengthen financial flexibility. Cash and deposits ¥776.9B, Equity Ratio 69.8%, and minimal debt burden (Debt/EBITDA 0.04x) enhance flexibility for strategic investment and shareholder returns. While total return ratio near 65% is balanced, next-year dividend guidance ¥39 (payout ratio 15.4%) is conservative, leaving room for increases when profit growth resumes.
Structural issues for profitability improvement: Declines in gross margin to 6.5% (-2.9pt) and operating margin to 4.3% (-1.2pt) show that scale expansion has not translated into margin improvement. FX gains ¥41.8B (equivalent to 21.7% of Operating Income) temporarily lifted ordinary-level results but lack persistence; next-year guidance expecting Ordinary Income -27.0% also reflects FX normalization. Cost reductions, yield improvements, and raising the share of higher value-added products are key to raising core operating margins and medium-term shareholder value.
Business concentration and portfolio risk: High concentration in ElectroMechanical Components (92.4% of revenue, 88.2% of operating income) renders the company vulnerable to that segment’s market and customer trends. Acoustic Components is contracting and Applied Equipment And Others is also in profit decline and do not provide adequate diversification. For investment decisions, monitor the maintenance of competitiveness and margin improvement in the core business, the solidity of working capital management (risk of reversal in inventory and receivables), and measures to reduce FX sensitivity.
This report was automatically generated by AI analyzing XBRL financial filing data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are compiled by the company based on publicly available financial statements and are for reference only. Investment decisions are your responsibility; please consult a professional advisor as needed.