YAMAICHI ELECTRONICS CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥26.74B
• Operating Income: ¥6.42B
• Net Income: ¥4.08B
• EPS: ¥252.22

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment 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

Yamaichi Electronics (6941) reported FY2026 Q2 consolidated results under JGAAP showing resilient profitability despite modest topline pressure. Revenue was ¥26,739 million, down 3.0% YoY, while operating income declined 6.1% YoY to ¥6,418 million, indicating some operating deleverage amid softer demand or product mix normalization. Notably, net income rose 13.7% YoY to ¥4,651 million, implying tailwinds below the operating line (e.g., financial income, FX, or tax effects) and disciplined cost control. Gross profit of ¥11,783 million translates to a strong gross margin of 44.1%, highlighting favorable product mix and/or sustained pricing power in core sockets/connectors. Operating margin remained elevated at about 24.0%, and EBITDA margin was 29.8%, underscoring a high-value-added portfolio and efficient cost base. Ordinary income (¥6,493 million) slightly exceeded operating income, and interest expense was modest at ¥95 million, resulting in a high interest coverage ratio of roughly 67x. The DuPont decomposition shows a solid net margin of 17.39%, asset turnover of 0.480, and low financial leverage of 1.34x, producing an ROE of 11.17% that is consistent with the reported figure. Balance sheet strength is a key feature: total assets were ¥55,757 million and total equity ¥41,640 million, implying an inferred equity ratio of approximately 74.7% (the 0.0% disclosed equity ratio appears unreported rather than zero). Liquidity is ample with a current ratio of 3.08x and a quick ratio of 2.74x, and working capital stands at ¥21,669 million. Operating cash flow was robust at ¥8,123 million, 1.75x net income, which supports earnings quality and indicates favorable working capital dynamics. Depreciation and amortization of ¥1,539 million aligns with the gap between EBITDA and operating income and appears well covered by OCF. Investing cash flow was not disclosed in this dataset (shown as 0), limiting a full free cash flow assessment; hence, reported FCF as 0 should be treated as not available rather than truly zero. Dividend data were also not disclosed (DPS and payout ratio shown as 0), so distribution policy cannot be inferred from this set; however, the balance sheet and cash flow capacity suggest flexibility. Overall, the company exhibits strong profitability, conservative leverage, and healthy cash generation, albeit with near-term topline softness. Key uncertainties include semiconductor-related cycle sensitivity, foreign exchange, and capex timing, but the current financial posture appears resilient. Data limitations exist where items are displayed as zero; the analysis uses only the available non-zero values and reasonable inferences where appropriate.

Profitability Analysis

ROE of 11.17% is driven primarily by a high net margin (17.39%), with asset turnover of 0.480 and modest financial leverage of 1.34x. Gross margin of 44.1% supports strong contribution margins, reflecting higher value-added sockets/connectors and disciplined pricing. Operating margin is approximately 24.0% (¥6,418m / ¥26,739m), indicating efficient SG&A management and favorable scale economics. EBITDA of ¥7,957m yields a 29.8% margin, suggesting healthy operating efficiency and capacity to absorb cost inflation. Ordinary income of ¥6,493m slightly above operating income implies non-operating gains or FX benefits partially offsetting any headwinds. Interest burden is minimal (¥95.6m), with interest coverage of roughly 67x, meaning financing structure does not materially dilute profitability. Operating leverage appears present but moderate; a 3.0% revenue decline resulted in a 6.1% drop in operating income, pointing to some fixed-cost sensitivity. The uplift in net income (+13.7% YoY) despite lower operating income suggests supportive below-the-line factors, including a normalized effective tax rate. Overall, profitability quality is high, underpinned by robust margins and negligible interest drag.

Growth Assessment

Revenue decreased 3.0% YoY to ¥26,739m, implying a modest cyclical or mix-related slowdown versus the prior-year first half. Operating income fell 6.1% YoY to ¥6,418m, consistent with some operating deleverage as volume softened. Net income rose 13.7% YoY to ¥4,651m, signaling supportive non-operating items or tax effects and underscoring resilience in bottom-line performance. The 44.1% gross margin indicates continued strength in higher-margin products (e.g., test sockets, precision connectors) that can cushion demand volatility. With asset turnover at 0.480, the business appears capital intensive relative to sales, typical for precision component manufacturing; growth will likely remain sensitive to semiconductor and electronics capital cycles. Given limited disclosure on orders/backlog, revenue sustainability cannot be fully assessed from this dataset; however, strong OCF suggests earnings are supported by cash conversion rather than non-cash accruals. Outlook hinges on semiconductor cycle recovery timing, customer capex plans, and FX; near-term growth may remain subdued if end-market demand stays soft, but margin structure provides buffer.

Financial Health

Total assets of ¥55,757m and total equity of ¥41,640m imply an inferred equity ratio near 74.7% (equity ratio field shown as 0.0% is treated as undisclosed). Total liabilities are ¥13,713m, resulting in a debt-to-equity ratio of 0.33x, indicative of conservative leverage. Liquidity is strong: current assets ¥32,112m vs current liabilities ¥10,443m produce a current ratio of 3.08x and quick ratio of 2.74x. Working capital remains ample at ¥21,669m, offering a cushion against cyclical swings. Interest expense is low at ¥95.6m, and the interest coverage ratio of roughly 67x underscores low refinancing risk. Inventory stands at ¥3,519m (about 11% of revenue for the period), which appears manageable and suggests no evident overstocking based on available data. Overall solvency and liquidity positions are robust, providing flexibility for investment and potential shareholder returns when appropriate.

Cash Flow Quality

Operating cash flow was ¥8,123m, 1.75x net income (¥4,651m), indicating strong cash conversion and high earnings quality. EBITDA of ¥7,957m and D&A of ¥1,539m reconcile well with operating income, supporting the integrity of reported profitability. Working capital appears to have been a tailwind or at least not a drag, given OCF outpaced earnings despite modest revenue contraction; detailed components were not disclosed. Investing cash flow is shown as 0 (undisclosed), so free cash flow cannot be precisely determined here; reported FCF of 0 should be treated as not available, not an actual zero value. Given typical capital intensity in precision components, capex likely exists but is unreported in this dataset; monitoring capex vs D&A will be important for sustaining capacity and technology leadership. Financing cash flow was an outflow of ¥1,539m, suggesting debt reduction, dividends, or share repurchases; the split is not disclosed. On the whole, cash flow quality appears strong, but a full FCF view is limited by missing investing cash flow details.

Dividend Sustainability

Dividend per share and payout ratio are shown as 0, which should be treated as undisclosed rather than actual zero. With net income of ¥4,651m and OCF of ¥8,123m, internal capacity to fund distributions appears solid, subject to actual capex needs and strategic investments. Without investing cash flow data, free cash flow coverage of dividends cannot be calculated; therefore, we cannot assess historical payout sustainability from this dataset. The balance sheet’s inferred equity ratio (~74.7%) and low leverage provide flexibility for dividends, but policy, targets, and actual distributions are not provided here. If capex aligns with or slightly exceeds D&A, potential capacity for sustainable distributions exists; however, visibility is constrained by lack of DPS and capex disclosure.

Risk Assessment

Business Risks:

• Semiconductor cycle exposure affecting demand for test sockets and connectors
• Customer capex timing and order volatility impacting revenue visibility
• Product mix shifts potentially pressuring gross margins
• Competitive pricing in connectors and interconnects market
• Technological obsolescence risk requiring sustained R&D and capex
• Supply chain constraints for precision components and materials
• Foreign exchange fluctuations (USD/EUR/Asia) impacting revenue and costs
• Geopolitical and trade policy risks affecting global electronics supply chains

Financial Risks:

• Potential working capital swings in downcycles affecting OCF
• Capex requirements to maintain technology roadmap possibly elevating cash needs
• Customer concentration risk typical in semiconductor-related businesses
• FX translation and transaction impacts on ordinary income

Key Concerns:

• Topline decline (-3.0% YoY) and some operating deleverage (-6.1% YoY in OP)
• Limited visibility on investing cash flow and capex, constraining FCF assessment
• Dividend policy and cash return framework not disclosed in this dataset

Investment Implications

Key Takeaways:

• Margin structure remains strong: 44.1% gross margin and ~24% operating margin despite revenue softness
• ROE of 11.17% is driven by high net margin and low leverage, with asset turnover at 0.480
• Balance sheet is conservative with inferred equity ratio ~74.7% and D/E ~0.33x
• Earnings quality is solid with OCF at 1.75x net income
• Data gaps on investing cash flow and dividends limit conclusions on FCF and payout sustainability

Metrics to Watch:

• Order trends and book-to-bill in sockets/connectors
• Gross margin trajectory and product mix
• Capex vs depreciation and resulting free cash flow
• OCF to net income ratio and working capital turns (inventory, receivables)
• FX impacts on ordinary income and hedging effectiveness
• Asset turnover and utilization rates

Relative Positioning: Within Japanese electronic component peers, the company appears to combine above-average margins with low leverage and strong liquidity; however, capital intensity and semiconductor cycle sensitivity keep asset turnover modest, placing it as a financially resilient, margin-focused player rather than a high-velocity volume grower.

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