| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥527.0B | ¥453.0B | +16.3% |
| Operating Income / Operating Profit | ¥115.6B | ¥82.2B | +40.5% |
| Ordinary Income | ¥121.3B | ¥76.9B | +57.7% |
| Net Income / Net Profit | ¥90.9B | ¥52.1B | +74.3% |
| ROE | 19.5% | 13.1% | - |
For the fiscal year ended March 2026, the company achieved higher revenue and substantially higher profits: Revenue ¥527.0B (YoY +¥74.0B +16.3%), Operating Income ¥115.6B (YoY +¥33.4B +40.5%), Ordinary Income ¥121.3B (YoY +¥44.4B +57.7%), Net Income ¥90.9B (YoY +¥38.8B +74.3%). Operating margin improved to 21.9% from 18.2% a year earlier (+3.7pt). Gross margin improved to 40.6% (prior year 38.6%) while SG&A ratio fell to 18.7% (prior year 20.5%), both contributing to higher profitability. ROE was 19.5% versus 13.5% prior year, an improvement of 6.0pt, primarily driven by expansion of net profit margin (11.5%→17.2%). The ConnectorSolution segment rapidly expanded (Revenue +30.6%, Operating Income +263.2%), improving its margin to 17.8%. The TestSolution segment recorded Revenue +5.2% and a slight decrease in Operating Income -1.4% while maintaining a high margin of 26.5%. Estimated EBITDA was ¥148.3B (Operating Income + depreciation), with an EBITDA margin of 28.1%, indicating a solid earnings base.
[Revenue] Revenue was ¥527.0B (+16.3%), reflecting broad-based demand recovery. By segment, ConnectorSolution was the largest growth driver at ¥247.4B (+30.6%), supported by increased demand centered on high-speed transmission connectors. TestSolution recorded ¥264.2B (+5.2%), remaining firm on the back of steady semiconductor test demand. OpticsRelated was ¥15.3B (+23.9%), small but on a recovery trend. Revenue composition improved: TestSolution 50.1%, ConnectorSolution 47.0%, OpticsRelated 2.9%.
[Profitability] Gross profit was ¥214.0B (gross margin 40.6%), up ¥38.6B YoY, with gross margin improving by 2.0pt. SG&A was ¥98.5B (SG&A ratio 18.7%), restrained to a 6.2% increase versus a 16.3% revenue increase, lowering SG&A ratio by 1.8pt from 20.5% a year earlier. Operating Income ¥115.6B (operating margin 21.9%) was up 40.5%, with margin improving by 3.7pt. Non-operating income included interest income ¥1.2B and foreign exchange gains ¥4.9B (none recorded in prior year), totaling non-operating income ¥8.0B. Interest expense was ¥2.0B, producing an interest coverage of 57.8x (Operating Income / Interest Expense). Ordinary Income ¥121.3B (+57.7%) outpaced operating income growth due to FX gains. Extraordinary losses were ¥1.1B (impairment losses ¥2.9B; loss on disposal of fixed assets ¥0.2B), minor at 1.2% of net income. Profit before tax was ¥120.1B; after deducting corporate taxes of ¥29.3B (effective tax rate 24.4%), Net Income was ¥90.9B (+74.3%). In conclusion, the high profitability of ConnectorSolution and stable earnings from TestSolution drove revenue growth and large profit increases.
TestSolution posted Revenue ¥264.2B (+5.2%), Operating Income ¥70.1B (-1.4%), Operating Margin 26.5%. While revenue increased due to resilient semiconductor test demand, operating income slightly declined. It remains the core segment, generating 60.7% of consolidated Operating Income with a high margin. ConnectorSolution recorded Revenue ¥247.4B (+30.6%), Operating Income ¥44.1B (+263.2%), Operating Margin 17.8%. Growth in demand for high-speed transmission connectors and an improved product mix drove margin improvement from 6.4% last year, a significant rise of 11.4pt, increasing its share of operating profit to 38.1%. OpticsRelated reported Revenue ¥15.3B (+23.9%), Operating Income ¥2.1B (+915.2%), Operating Margin 13.5%. Although small, it accelerated its return to profitability and improved earnings. The gap in margins across segments narrowed, raising overall portfolio profitability.
[Profitability] Operating margin 21.9% improved 3.7pt from 18.2% last year, with efficiency gains from both gross margin (+2.0pt) and SG&A ratio (−1.8pt). ROE was 19.5% versus 13.5% prior year, up 6.0pt, mainly driven by expansion of net profit margin (11.5%→17.2%). Estimated EBITDA ¥148.3B (Operating Income ¥115.6B + Depreciation ¥32.7B) and EBITDA margin 28.1% indicate a strong earnings base. EPS ¥492.25 (prior year ¥259.47), an increase of +89.7%. [Cash Quality] Operating Cash Flow (OCF) was ¥100.5B, or 1.11x of Net Income ¥90.9B, ensuring minimum cash quality, but OCF/EBITDA ratio at 0.68x shows working capital increases (Accounts receivable +¥22.3B, Inventories +¥10.3B) are suppressing conversion efficiency. Estimated CCC is 136 days (DSO 64 days, DIO 114 days), slightly elongated. Free Cash Flow was ¥65.8B (OCF − Investing CF), sufficient to cover CapEx of ¥25.9B. [Investment Efficiency] Total asset turnover 0.88x (Revenue ¥527.0B / Total assets ¥600.6B), Fixed asset turnover 2.74x (Revenue / Fixed assets ¥192.1B). CapEx ¥25.9B is 0.79x of depreciation ¥32.7B, focusing on renewal investment. [Financial Soundness] Equity Ratio 73.8% (prior year 74.0%), remaining high; Current Ratio 305.3%, Quick Ratio 271.3%, indicating extremely healthy short-term liquidity. Cash and deposits ¥177.9B increased +37.0% YoY. Interest-bearing debt totaled ¥30.7B (short-term borrowings ¥30.4B, long-term borrowings ¥0.3B), Debt/EBITDA 0.21x, Interest Coverage 57.8x, indicating ample financial capacity. BPS ¥2,521.98 (prior year ¥2,037.62), up +23.8%.
OCF was ¥100.5B (+11.6% YoY). Starting from profit before tax ¥120.1B and adding non-cash expenses including depreciation ¥32.7B, working capital movements produced net effects of Accounts receivable increase −¥15.4B, Inventories increase −¥17.4B, Accounts payable increase +¥11.1B, net change △¥21.7B. After corporate tax payments −¥34.3B, OCF settled at ¥100.5B. OCF/Net Income was 1.11x, maintaining minimum quality, but OCF/EBITDA 0.68x shows working capital accumulation tied to revenue growth is dampening cash conversion. Investing CF was △¥34.7B, led by CapEx ¥25.9B, offset partially by net decrease in time deposits ¥28.5B, constraining net investment. Free Cash Flow (OCF + Investing CF) ¥65.8B was up +30.2% YoY, sufficient to cover dividend payments of ¥16.9B. Financing CF was △¥27.4B, reflecting net repayments of short-term borrowings △¥5.4B, repayment of long-term borrowings △¥0.4B, lease liability repayments △¥5.0B, dividend payments △¥16.9B, and share buybacks △¥19.1B, partially offset by proceeds from sale of treasury stock +¥1.9B. Ending cash balance ¥177.9B rose by +¥48.1B from opening balance ¥129.8B, indicating very high financial safety.
Recurring income is the main driver of profit growth. Non-operating income ¥8.0B represents 1.5% of Revenue; foreign exchange gains ¥4.9B contributed but dependency is limited. Interest income ¥1.2B indicates prudent management of financial assets. One-off items were limited to extraordinary losses ¥1.1B (1.2% of Net Income); impairment losses ¥2.9B and loss on disposal of fixed assets ¥0.2B had minimal impact on consolidated earnings. OCF ¥100.5B / Net Income ¥90.9B = 1.11x indicates good alignment between accounting profit and cash, though OCF/EBITDA 0.68x points to working capital pressure as an accrual-quality issue. The gap between Ordinary Income ¥121.3B and Net Income ¥90.9B is largely explained by corporate taxes ¥29.3B (effective tax rate 24.4%), with no abnormal divergence. Comprehensive Income ¥104.3B exceeded Net Income by ¥13.3B, reflecting foreign currency translation adjustments ¥13.2B and absorbing FX volatility.
Against the full-year forecast (Revenue ¥600.0B, Operating Income ¥130.0B, Ordinary Income ¥128.0B, Net Income ¥92.0B), actuals represent progress ratios of: Revenue ¥527.0B (87.8%), Operating Income ¥115.6B (88.9%), Ordinary Income ¥121.3B (94.7%), Net Income ¥90.9B (98.8%). Net Income nearly met the forecast, and Ordinary Income approached plan levels. FX gains and higher profitability in ConnectorSolution drove plan progress. Operating Income was slightly short of target, but improvements in gross margin and SG&A control keep the target within reach. Full-year dividend forecast was ¥50.0 (payout ratio 34.3%); actual dividend of ¥148 is the annual dividend including interim ¥35, representing a payout ratio of 30.1% (¥148 / EPS ¥492.25), a healthy level. Achieving the full-year forecast requires continued revenue and profit growth in the remaining period and improvement in working capital efficiency.
Annual dividend ¥148 (Interim ¥35 + Year-end ¥113), Payout Ratio 30.1% (Dividend ¥148 / EPS ¥492.25), within a healthy range. Prior year dividend effectively equated to ¥35 annually, so this represents a substantial increase. Total dividends ¥1.75B (dividend payments ¥1.69B consistent with this) are covered by Free Cash Flow ¥65.8B, giving an FCF coverage of 3.89x and indicating very high dividend sustainability. Share buybacks totaled ¥1.91B; total returns ¥3.66B, implying a Total Return Ratio of 40.3% (Total returns / Net Income ¥90.9B). Cash and deposits ¥177.9B and net cash ¥147.2B (Cash − Interest-bearing debt ¥30.7B) indicate significant financial flexibility; the risk of dividend cuts or reduced returns in economic downturns is limited. The actual dividend ¥148 versus forecast ¥50 likely reflects an interim upward revision in response to stronger-than-expected performance.
Segment concentration risk: TestSolution accounts for 50.1% of Revenue and 60.7% of Operating Income, making the company sensitive to semiconductor investment cycles. The YoY slight decline in operating income suggests demand volatility. Rapid expansion of ConnectorSolution is easing concentration risk, but sharp semiconductor market swings could materially affect consolidated performance.
Deterioration in working capital efficiency: Increases in Accounts receivable ¥91.8B (+32.1%) and Inventories ¥45.5B (+29.3%) have extended estimated CCC to 136 days. DIO of 114 days embeds risks of valuation losses and discounts on demand reversals, while DSO of 64 days suggests collection delay risk in downturns. Accumulation of working capital contributes to the OCF/EBITDA ratio of 0.68x and hinders funding efficiency during growth phases.
Reliance on short-term liabilities and FX volatility: Short-term liabilities ¥132.6B represent 80.1% of total liabilities, indicating formal reliance on refinancing. While cash and deposits ¥177.9B mitigate this risk in practice, rising funding costs in changing financial markets remain possible. FX gains of ¥4.9B in non-operating income were a temporary benefit from yen weakness; in yen appreciation scenarios, expanding FX losses (e.g., ¥2.2B) could pressure Ordinary Income.
Profitability & Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 21.9% | 7.8% (4.6%–12.3%) | +14.2pt |
| Net Profit Margin | 17.2% | 5.2% (2.3%–8.2%) | +12.1pt |
Profitability substantially exceeds the industry median, indicating top decile performance within the manufacturing sector.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 16.3% | 3.7% (-0.4%–9.3%) | +12.6pt |
Revenue growth is more than four times the industry median, reflecting demand recovery and business expansion and demonstrating outstanding growth among manufacturers.
※ Source: Company compilation
Structural improvement in profitability: Operating margin 21.9% (prior year 18.2%) achieved through both gross margin +2.0pt and SG&A ratio −1.8pt improvements. ConnectorSolution improved margin sharply from 6.4% → 17.8%, and combined with TestSolution’s high margin of 26.5%, the consolidated earnings base has been strengthened. ROE improvement to 19.5% (prior year 13.5%) is mainly due to net profit margin expansion, suggesting a sustained trend of improved capital efficiency.
Financial soundness and return capacity: Equity Ratio 73.8%, Cash and deposits ¥177.9B, Net Cash ¥147.2B, Debt/EBITDA 0.21x — all extremely healthy. Payout Ratio 30.1% and Total Return Ratio 40.3% with FCF coverage 3.89x; Dividend ¥148 is a large increase from prior year ¥35. Given this financial flexibility, the risk of dividend cuts or reduced returns during economic cycles is limited, and scope for continued or expanded shareholder returns is high.
Room to improve working capital efficiency: Estimated CCC 136 days (DSO 64 days, DIO 114 days) shows elongation in inventory and receivables, reflected in OCF/EBITDA 0.68x. While revenue grew +16.3%, OCF grew +11.6%, signaling working capital pressure. Shortening CCC via tighter credit control, better demand forecasting, and optimized production planning would materially enhance Free Cash Flow generation and could fund additional dividends and buybacks. Improving working capital efficiency is key to achieving the full-year forecast (Revenue ¥600B, Net Income ¥9.2B).
This report is an earnings analysis document automatically generated by AI from XBRL earnings release data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the firm based on public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed.