J-LEASE CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥9.74B
• Operating Income: ¥1.77B
• Net Income: ¥916M
• EPS: ¥65.51

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

J.Lease Co., Ltd. (7187) delivered strong FY2026 Q2 consolidated results under JGAAP, with broad-based growth and solid profitability. Revenue rose 26.3% YoY to ¥9.74bn, translating into operating income growth of 24.9% to ¥1.77bn and net income growth of 28.2% to ¥1.17bn. Profitability remains robust: gross margin is 56.8%, operating margin is 18.2%, ordinary margin is 17.9%, and net margin stands at 12.1%. DuPont decomposition indicates a calculated ROE of 17.6%, driven by healthy net margin (12.1%), moderate asset turnover (0.505x), and leverage (assets/equity) of 2.88x. ROA is approximately 6.1% (net income/total assets), consistent with the DuPont product of margin and turnover. Cash generation is positive but lagging earnings: operating cash flow (OCF) was ¥0.98bn versus net income of ¥1.17bn, yielding an OCF/NI ratio of 0.83, implying some working-capital consumption in the period. Liquidity appears sound with a current ratio of 141% and positive working capital of ¥3.36bn; interest coverage is very strong at 154x, reflecting a low interest burden (¥11.5m) against solid operating profit. Balance sheet leverage is moderate with total liabilities/equity of roughly 1.46x; based on disclosed totals, the implied equity ratio is about 34.7% (total equity/total assets), although the reported “equity ratio” field shows 0.0% and should be treated as undisclosed. Investment and financing cash flow details are limited (investing CF reported as 0, which likely indicates non-disclosure rather than actual zero), constraining free cash flow analysis. Dividend data appear undisclosed in this dataset (DPS and payout shown as 0.00), and share count-related metrics are not available despite a reported EPS of ¥65.51, so per-share and payout analysis are necessarily tentative. Overall, the company exhibits strong earnings momentum with disciplined cost control, robust margins, and conservative interest burden. The key watchpoint is the cash conversion shortfall relative to earnings, likely tied to working capital dynamics in the guarantee business model. With leverage moderate and profitability elevated, the financial profile is solid, but monitoring credit cost trends and receivables/claims metrics is important for sustainability. Data limitations (notably cash, capex, dividends, and share count) necessitate caution in drawing definitive conclusions on capital allocation and per-share returns.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 12.06% (net income ¥1,174m / revenue ¥9,736m)
• asset_turnover: 0.505x (revenue ¥9,736m / total assets ¥19,284m)
• financial_leverage: 2.88x (total assets ¥19,284m / total equity ¥6,685m)
• calculated_ROE: 17.56% (consistent with reported)
• ROA: 6.09% (net income ¥1,174m / total assets ¥19,284m) margin_quality: Gross margin 56.8% and operating margin 18.2% indicate strong unit economics for a guarantee/fee-based model. Ordinary margin 17.9% and limited interest expense suggest operating results are the main earnings driver. Net margin at 12.1% is healthy and consistent with scale benefits. operating_leverage: Revenue grew 26.3% YoY while operating income grew 24.9% YoY, implying roughly stable operating leverage; SG&A likely rose broadly in line with growth. EBITDA margin is 19.1%, slightly above operating margin due to modest D&A (¥91m), indicating a relatively asset-light cost base.

Growth Assessment

revenue_sustainability: Top-line growth of 26.3% YoY is strong for a financial services/guarantee provider. Given high gross margins, revenue likely reflects increased guaranteed contracts and fee income; sustainability will depend on new originations, retention, and macro conditions in the rental/lease markets. profit_quality: Operating income growth (+24.9% YoY) tracks revenue growth, indicating stable cost discipline. Interest expense is negligible relative to EBIT, so operating performance is translating to bottom-line growth (+28.2% YoY). outlook: With high margins and moderate leverage, the company is positioned to benefit from continued scale. However, growth durability will hinge on credit/claim loss trends and the broader rental and SME environment. Watch for normalization of growth as the prior-year base rises and as credit costs evolve.

Financial Health

liquidity: Current ratio 141% and quick ratio 141% reflect adequate short-term coverage; working capital stands at ¥3.36bn. Cash and equivalents are not disclosed in this dataset (shown as 0), so immediate liquidity buffers cannot be precisely assessed. solvency: Interest coverage is very strong at 154x (EBIT ¥1,771m / interest ¥11.5m). Total liabilities/equity approximates 1.46x (¥9.73bn/¥6.69bn). The implied equity ratio is about 34.7% (¥6.685bn/¥19.284bn), indicating a moderate capital base for the risk profile. capital_structure: Leverage is moderate and predominantly non-interest-bearing based on the low interest burden, suggesting limited reliance on debt financing. Ordinary income closely tracks operating income, implying minimal non-operating volatility.

Cash Flow Quality

earnings_quality: OCF/Net Income is 0.83 (¥977m/¥1,174m), indicating earnings did not fully convert to cash due to working capital outflows, which is common in receivables/claims-driven models. FCF_analysis: Investing cash flow is undisclosed (reported as 0), preventing precise FCF calculation. EBITDA of ¥1,862m and low D&A (¥91m) suggest modest capital intensity, but capex and investments are not available in this dataset. working_capital: Positive working capital of ¥3.36bn provides cushion; however, the OCF shortfall versus NI points to timing effects in receivables/guarantee-related assets or payables. Monitoring days sales outstanding and claims paid/recoveries would clarify cash conversion.

Dividend Sustainability

payout_ratio_assessment: Dividend data are not disclosed here (DPS and payout shown as 0.00 should be treated as unavailable). With EPS at ¥65.51, capacity for dividends exists in principle, but actual payout behavior cannot be inferred from this dataset. FCF_coverage: Not assessable due to undisclosed investing cash flows and capex (FCF shown as 0.00 in the dataset should be treated as unavailable). policy_outlook: Absent explicit disclosure, assume a conservative stance pending confirmation of the company’s capital allocation policy, cash position, and regulatory capital considerations for its guarantee operations.

Risk Assessment

Business Risks:

• Credit/claim risk in guarantee operations (spikes in delinquencies or claim payments could compress margins).
• Macroeconomic sensitivity (employment, tenant turnover, and SME health affecting fee income and loss rates).
• Competitive pressure in rent/lease guarantee markets potentially impacting pricing and acquisition costs.
• Regulatory and compliance changes affecting guarantee products and capital requirements.
• Concentration risk by region or channel if growth is skewed to specific geographies or partners.
• Operational/IT system risks and potential fraud in application and claims processes.

Financial Risks:

• Working capital consumption reducing cash conversion despite solid earnings.
• Potential rise in credit costs not fully visible in interim numbers.
• Refinancing/liquidity visibility limited due to undisclosed cash and debt breakdown.
• Exposure to interest rate changes on float and funding costs, albeit current interest burden is low.

Key Concerns:

• OCF below net income (0.83x) suggests cash conversion risk if working capital expansion persists.
• Limited disclosure on cash, capex, and investing flows restricts FCF and dividend capacity assessment.
• Equity ratio field is undisclosed; reliance on implied ratio might mask off-balance or contingent liabilities inherent in guarantee businesses.

Investment Implications

Key Takeaways:

• Strong top-line growth (+26.3% YoY) with robust operating margin (18.2%) and net margin (12.1%).
• High ROE at 17.6% supported by healthy margins and moderate leverage.
• Excellent interest coverage (154x) indicates low financial risk from funding costs.
• Positive but sub-earnings cash generation (OCF/NI 0.83) highlights working capital sensitivity.
• Data gaps (cash, investing CF, dividends, share count) limit conclusions on FCF and shareholder returns.

Metrics to Watch:

• OCF/Net income and changes in receivables/claims-related working capital.
• Credit cost and claim payout ratios, provision trends, and recoveries.
• SG&A-to-revenue ratio and operating margin stability as the company scales.
• Leverage metrics (liabilities/equity) and any increase in interest-bearing debt.
• Contract acquisition growth (new guarantees written) and retention metrics.

Relative Positioning: Within Japan’s small/mid-cap financial services and guarantee peers, J.Lease’s ROE (~17.6%) and operating margin (~18%) appear above sector averages (often low-to-mid teens ROE and low-teens OPM), with moderate leverage and strong interest coverage; the principal differentiator to monitor is cash conversion relative to rapid growth.

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