| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥65.7B | ¥66.4B | -1.1% |
| Operating Income / Operating Profit | ¥16.0B | ¥15.1B | +5.7% |
| Ordinary Income | ¥18.4B | ¥14.7B | +25.3% |
| Net Income / Net Profit | ¥13.0B | ¥11.1B | +17.5% |
| ROE | 2.8% | 2.2% | - |
FY2026 Q1 recorded Revenue ¥65.7B (YoY -¥0.7B -1.1%), a slight decline, while Operating Income ¥16.0B (YoY +¥0.9B +5.7%), Ordinary Income ¥18.4B (YoY +¥3.7B +25.3%), and Net Income ¥13.0B (YoY +¥1.9B +17.5%) all achieved double-digit profit growth. Gross margin improved to 33.2% (prev. 31.1%, +2.1pt) and operating margin to 24.3% (prev. 22.7%, +1.6pt), indicating a significant improvement in profitability. The large increase at the Ordinary Income level was contributed by interest income ¥0.9B and foreign exchange gains ¥1.3B. Net income margin reached a high 19.8% (prev. 16.3%, +3.5pt). Progress against the full year plan (Revenue ¥280.0B, Operating Income ¥65.0B, Ordinary Income ¥67.0B) stands at 23.5% for Revenue, 24.6% for Operating Income, and 27.4% for Ordinary Income, with profit metrics exceeding the standard 25% progression rate.
【Revenue】 Revenue was ¥65.7B, down ¥0.7B YoY (-1.1%), a slight decline. Segment disclosure is not provided, so detailed breakdown is unknown, but market stagnation in electronic components-related products is implied. Cost of sales decreased to ¥43.8B (prev. ¥45.8B), down ¥1.9B, improving cost of sales ratio by 2.1pt to 66.8% (prev. 68.9%). As a result, gross profit rose to ¥21.8B (prev. ¥20.6B), up ¥1.2B, and gross margin improved to 33.2% (prev. 31.1%) (+2.1pt). Cost reductions and product mix improvements are inferred contributors.
【Profit & Loss】 Selling, general and administrative expenses were ¥5.8B (prev. ¥5.5B), up ¥0.3B, but the ratio to sales remained restrained at 8.9% (prev. 8.3%). Improved gross profit absorbed the SG&A increase, resulting in Operating Income ¥16.0B (prev. ¥15.1B), up ¥0.9B (+5.7%). Non-operating income totaled ¥2.5B, primarily interest income ¥0.9B and foreign exchange gains ¥1.3B. Non-operating expenses were minor at ¥0.1B. Consequently, Ordinary Income was ¥18.4B (prev. ¥14.7B), up ¥3.7B (+25.3%), significantly outpacing the operating-level increase. Extraordinary items were effectively zero, and Profit Before Tax was ¥18.4B; after deducting income taxes ¥5.3B (effective tax rate 29.1%), Net Income was ¥13.0B (prev. ¥11.1B), up ¥1.9B (+17.5%). The company experienced a decline in revenue but an increase in profit, highlighting a shift to profitability-focused management.
【Profitability】Operating margin 24.3% (prev. 22.7%, +1.6pt), Net income margin 19.8% (prev. 16.3%, +3.5pt), Gross margin 33.2% (prev. 31.1%, +2.1pt) — profitability metrics improved across the board. ROE (annualized estimate) 2.8% is explained by Net income margin 20.2%, Total asset turnover 0.13, and Financial leverage 1.11; a combination of high profitability with low turnover and low leverage. ROA is 2.5% (annualized estimate). 【Cash Quality】Operating Cash Flow (OCF) ¥12.0B covers Net Income ¥13.0B at 92.3%, generally healthy, but realization against OCF subtotal ¥27.7B is low at 43.3%. Receivables collection generated +¥12.8B, while corporate tax payments -¥16.0B and reduction in accounts payable -¥6.0B pressured cash. OCF/EBITDA (EBITDA = Operating Income ¥16.0B + Depreciation ¥3.1B = ¥19.1B) is 62.8%, indicating room for improvement in cash conversion. 【Investment Efficiency】Capital expenditures ¥2.0B are 64.5% of Depreciation ¥3.1B, below maintenance levels. Total assets ¥515.3B decreased 8.6% from ¥563.6B year-on-year, suggesting more efficient asset use. 【Financial Soundness】Equity Ratio 90.2% (prev. 88.8%), Current ratio 1,064%, Quick ratio 922% — extremely strong. Cash and deposits ¥259.9B are 7.2x current liabilities ¥35.9B, indicating negligible liquidity risk. Interest-bearing debt is zero, effectively debt-free.
OCF improved significantly to ¥12.0B (prev. ¥7.1B, +69.9%). From OCF subtotal ¥27.7B, decreases in trade receivables +¥12.8B and inventories +¥0.6B contributed cash, while decreases in accounts payable -¥6.0B were cash outflows. Corporate tax payments -¥16.0B were the largest outflow, reflecting Profit Before Tax level. Investing Cash Flow was -¥14.8B, with capital expenditures only -¥2.0B. The majority of investing CF movements were due to financial assets and time deposit flows (time deposit placements -¥25.5B, withdrawals +¥12.7B); business investment was minor. Free Cash Flow was -¥2.8B (OCF + investing CF), turning negative. Financing CF was -¥52.5B, comprised of dividend payments -¥34.7B and share buybacks -¥17.8B totaling -¥52.5B as shareholder returns. As a result, cash and deposits decreased ¥39.5B from the opening balance ¥299.4B to ¥259.9B. Generous cash reserves funded shareholder returns, but the high level of returns amid negative FCF raises sustainability concerns.
Of Ordinary Income ¥18.4B, Operating Income ¥16.0B accounts for 87.0%, indicating recurring earnings as the core. Non-operating income ¥2.5B (3.8% of sales) comprises interest income ¥0.9B and foreign exchange gains ¥1.3B, implying limited dependence on financial income. Foreign exchange gains ¥1.3B and losses ¥1.4B nearly offset, leaving FX impact neutral. Extraordinary items totaled ¥0.0B, indicating no material one-offs. No difference between Profit Before Tax ¥18.4B and Ordinary Income ¥18.4B; effective tax rate 29.1% (income taxes ¥5.3B/Profit Before Tax ¥18.4B) is within normal range. Comprehensive income ¥17.3B exceeded Net Income ¥13.0B by ¥4.3B; Other Comprehensive Income ¥4.3B comprised foreign currency translation adjustments ¥2.0B and unrealized gains on available-for-sale securities ¥2.3B. Accrual ratio ((Net Income ¥13.0B - OCF ¥12.0B)/Total Assets ¥515.3B) is 0.2%, low, indicating small divergence between profit and cash. OCF/Net Income 92.3% is healthy, but realization rate against OCF subtotal of 43.3% suggests sizable working capital swings, leaving some concerns on cash generation stability.
Full year plan: Revenue ¥280.0B (YoY +2.5%), Operating Income ¥65.0B (+4.4%), Ordinary Income ¥67.0B (-4.9%). Q1 progress rates are 23.5% for Revenue (vs full year plan), 24.6% for Operating Income, and 27.4% for Ordinary Income, with Operating and Ordinary Income exceeding the standard 25% progression. Revenue is slightly lagging, but margin improvements have the company tracking profits ahead of plan. The full year Ordinary Income plan being set lower YoY likely reflects conservative assumptions incorporating uncertainty in financial income and FX volatility. No revisions to guidance were made at Q1. If profit progress continues to outpace revenue, there is potential for upward revision to the full year forecast.
In Q1 the company implemented dividends ¥34.7B and share buybacks ¥17.8B, totaling ¥52.5B in shareholder returns. Total Return Ratio relative to Q1 Net Income ¥13.0B is 404%, extremely high. Dividend payments ¥34.7B increased ¥7.4B from ¥27.3B in the prior year Q1, indicating a dividend hike. Share buybacks ¥17.8B increased ¥7.3B from ¥10.5B in the prior year Q1. The total return of ¥52.5B was financed by drawing down opening cash (¥299.4B) while Free Cash Flow was -¥2.8B. Full year dividend forecast is listed as ¥0.00, which may be a reporting format at the quarterly filing; actual dividend policy should be confirmed at the year-end. Cash and deposits ¥259.9B remain ample, so near-term ability to continue returns is high, but if negative FCF persists, the pace of cash decline warrants attention. Sustainable dividends and buybacks will require improved OCF generation and a balanced approach to investment and returns.
Working capital efficiency deterioration risk: Trade receivables ¥37.7B and inventories ¥50.8B total ¥88.5B, representing 23.2% of current assets ¥381.5B. Receivables days outstanding (DSO = ¥37.7B ÷ (¥65.7B/90 days)) is 51.7 days, within acceptable range, but inventory days (DIO = ¥50.8B ÷ (¥43.8B/90 days)) is 104.1 days, relatively long for manufacturing. Working capital swings compressed OCF subtotal ¥27.7B to ¥12.0B, and future demand fluctuations or inventory buildup could constrain cash generation. Prolonged rise in CCC (cash conversion cycle) risks impairing capital efficiency and liquidity.
Competitive weakness from underinvestment risk: CapEx ¥2.0B is only 64.5% of Depreciation ¥3.1B, below replacement level. Maintaining and renewing tangible fixed assets ¥105.5B likely requires more than ¥3B annually, but current Q1 run-rate equates to roughly ¥8B annually, which may be insufficient. In the electronic components industry, technological innovation and equipment renewal are key to competitiveness; continued investment restraint could result in reduced production efficiency or quality. Construction in progress fell sharply from ¥19.6B to ¥0.6B YoY, suggesting a pause in large investments, but medium-to-long-term growth investments are unclear.
Sustainability risk of high shareholder returns: Total Return Ratio 404% (Net Income ¥13.0B vs returns ¥52.5B) depends on cash drawdown. Cash and deposits ¥259.9B are ample, but if FCF remains -¥2.8B, an annual return level of ¥40–50B could deplete reserves in 2–3 years. Annualized OCF based on Q1 ~¥48B vs return pace (Q1 returns ¥52.5B ≈ annualized ¥210B) shows a large gap; sustaining returns requires OCF improvement and investment restraint. Reducing shareholder returns would be a negative signal for the share price; therefore, returning to FCF positivity is a key inflection point for future valuation.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating margin | 24.3% | 6.8% (2.9%–9.0%) | +17.5pt |
| Net income margin | 19.8% | 5.9% (3.3%–7.7%) | +13.9pt |
Profitability metrics substantially exceed manufacturing medians, indicating a top-tier profit structure within the industry.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue growth rate (YoY) | -1.1% | 13.2% (2.5%–28.5%) | -14.3pt |
Revenue growth trails the industry median by 14.3pt, reflecting the impact of a stagnant market. The company ranks lower within the industry on growth.
※ Source: Company aggregation
Sustainability of profitability improvement trend: Improvements in Gross margin 33.2% (+2.1pt) and Operating margin 24.3% (+1.6pt) reflect cost reductions and product mix optimization. An Operating margin 17.5pt above manufacturing median places the company among industry leaders; this may result from a shift to higher-value products in electronic components and production efficiencies. Key watchpoints include the risk that margin gains could reverse if cost cuts are exhausted or if a demand rebound triggers intensified price competition. SG&A ratio 8.9% is low but rose +0.6pt YoY, so SG&A increases in a revenue upcycle could pressure margins.
Cash generation capacity and sustainability of shareholder returns: With FCF -¥2.8B and total returns ¥52.5B (Total Return Ratio 404%), cash declined by ¥39.5B. Cash and deposits ¥259.9B remain plentiful, so short-term continuation of returns is feasible, but the gap between OCF (¥12.0B Q1, annualized ~¥48B) and the return pace (Q1 returns ¥52.5B → annualized ¥210B) is large. Sustainable returns require higher OCF, and improving working capital efficiency (faster collection of receivables and inventory turn) is key to restoring positive FCF. Investment restraint (CapEx/Depreciation 64.5%) supports short-term FCF but may undermine long-term competitiveness; balancing returns, investment, and growth will be the decisive factor for shareholder value creation.
This report is an AI-generated earnings analysis based on XBRL earnings release data. It is not a recommendation to invest in any specific securities. Industry benchmarks are reference information compiled by the firm from public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed.