NISSAN SHATAI CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥186.19B
• Operating Income: ¥5.55B
• Net Income: ¥-1.46B
• EPS: ¥27.41

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

Nissan Shatai Co., Ltd. (consolidated, JGAAP) delivered strong topline and earnings momentum in FY2026 Q2, with revenue up 26.8% YoY to ¥186.2bn and operating income up 34.0% YoY to ¥5.55bn. Net income rose 45.1% YoY to ¥3.71bn, implying meaningful operating leverage despite a very slim reported gross margin. Gross profit of ¥1.33bn implies a gross margin of only 0.7%, yet operating income exceeded gross profit, indicating substantial positive other operating items (e.g., subsidies, cost reclassifications, or net SG&A credits). Ordinary income reached ¥6.03bn and interest expense was minimal at ¥23m, yielding very high interest coverage. The DuPont profile shows a calculated ROE of 2.07%, driven by a 1.99% net margin, 0.705x asset turnover, and 1.47x financial leverage. Liquidity looks strong with a current ratio of 196.9% and working capital of ¥85.7bn, and capital structure appears conservative with debt-to-equity at 0.52x and equity of ¥179.1bn. Operating cash flow was negative at -¥7.06bn, resulting in a weak OCF-to-net income ratio of -1.90, suggesting a sizeable working capital outflow amid growth. The effective tax line shows a tax benefit (income tax expense of -¥0.67bn), contributing to the bottom line; the calculated effective tax rate metric shows 0.0% due to data handling but directionally indicates a benefit. Dividend payments were not disclosed for the period (DPS 0), and payout and FCF coverage metrics read as 0%/0.00x, consistent with no reported distributions and unavailable FCF. Several key disclosures (inventories, investing cash flows, cash balance, shares outstanding) are not reported in the data feed, limiting depth of analysis on FCF and per-share metrics. Despite these gaps, the company demonstrates improving profitability, tight cost control outside cost of sales, and ample liquidity. The unusual P&L structure (OP > gross profit) requires careful scrutiny of non-core and other operating items to assess sustainability. The negative OCF highlights the need to monitor growth-driven working capital and collection discipline in subsequent quarters. Overall, the financial picture indicates cyclical recovery and operational improvement, offset by cash conversion weakness and disclosure gaps. Forward risks include normalization of other operating gains, potential reversal of tax benefits, and working capital unwind. Absent capex disclosure, medium-term FCF generation and dividend capacity cannot be fully assessed from this dataset.

Profitability Analysis

ROE_decomposition: DuPont: Net margin 1.99% x Asset turnover 0.705 x Leverage 1.47 = ROE 2.07% (matches reported 2.07%). The ROE level is modest, reflecting thin net margins, moderate asset utilization, and low-to-moderate leverage. margin_quality: Gross margin is 0.7% (¥1.33bn/¥186.19bn), which is unusually low for the sector and likely impacted by product mix, input cost inflation, pricing, and/or accounting classification. Operating margin is 3.0% (¥5.55bn/¥186.19bn), which exceeds gross margin due to sizable positive other operating items or SG&A credits; this mix raises sustainability questions. EBITDA margin is 5.5% (¥10.23bn/¥186.19bn), indicating that non-cash charges (D&A ¥4.68bn) are material relative to operating profit. operating_leverage: Operating income grew 34.0% YoY vs. revenue growth of 26.8%, evidencing positive operating leverage. The delta likely arises from better fixed-cost absorption and non-recurring operating items, rather than improvement at the gross level, given the very low gross margin.

Growth Assessment

revenue_sustainability: Revenue grew 26.8% YoY to ¥186.19bn, likely reflecting volume recovery and improved OEM production schedules. Sustainability depends on OEM order visibility and supply-chain stability; data on backlog and regional mix are not provided. profit_quality: Profit expansion outpaced sales, but quality is mixed: OP > gross profit suggests reliance on other operating income or cost reclassifications. Net income benefited from a tax credit (¥-0.67bn tax). With interest expense minimal, financial items are not driving earnings. outlook: If production normalization continues, topline growth can remain solid. Margin sustainability hinges on normalization of other operating gains and cost pass-through. Given weak cash conversion in the period, we would expect focus on receivables and payables discipline in 2H to support earnings-to-cash alignment.

Financial Health

liquidity: Current assets ¥174.22bn vs. current liabilities ¥88.47bn yields a current ratio of 196.9% and strong working capital of ¥85.75bn. Quick ratio equals current ratio because inventories are unreported in the dataset. solvency: Total equity is ¥179.07bn and liabilities ¥93.35bn; leverage appears conservative (debt-to-equity 0.52x as provided, though specific interest-bearing debt is not disclosed). Interest coverage is robust at 241x, indicating low refinancing risk. capital_structure: Implied equity ratio (using assets/equity) is about 67.8%, despite the reported equity ratio field reading 0.0% due to disclosure mapping. Financial leverage in DuPont is 1.47x (Assets/Equity), consistent with a largely equity-funded balance sheet.

Cash Flow Quality

earnings_quality: OCF-to-net income is -1.90, indicating earnings did not translate into cash in the half-year. This likely reflects working capital build tied to growth (e.g., higher receivables or inventory), though line-item details are not disclosed. FCF_analysis: Investing cash flow is unreported (0 in feed), and capex data are unavailable; hence FCF cannot be reliably calculated from this dataset. EBITDA of ¥10.23bn suggests capacity for internal funding, but cash consumption in OCF offsets this in the period. working_capital: With inventories unreported, the negative OCF likely stems from receivables growth and timing of payables. Monitoring receivable days, payable days, and any inventory normalization in 2H will be critical to restore cash conversion.

Dividend Sustainability

payout_ratio_assessment: DPS is reported as 0 and payout ratio 0%, consistent with no dividends in the period. Given modest ROE (2.07%) and negative OCF, a conservative payout stance appears prudent until cash conversion improves. FCF_coverage: FCF coverage is shown as 0.00x due to unreported investing cash flows and no dividends paid. Without capex data, structural FCF capacity cannot be assessed from this dataset alone. policy_outlook: With strong liquidity but weak cash conversion in the period, the near-term policy likely prioritizes balance sheet resilience and operating investment over distributions, pending improved visibility on sustainable cash generation.

Risk Assessment

Business Risks:

• Dependence on OEM production schedules and model cycles impacting volume and capacity utilization
• Input cost inflation (materials, logistics) and pricing pass-through constraints
• Product mix and launch execution affecting margins
• Potential normalization of other operating income that currently supports operating profit
• Supply chain disruptions and procurement risks

Financial Risks:

• Negative operating cash flow driven by working capital build
• Earnings sensitivity to tax benefits and other non-recurring items
• Limited disclosure on interest-bearing debt composition and cash balances
• Potential capex requirements not captured in the dataset

Key Concerns:

• Sustainability of operating margin given gross margin at 0.7% and OP > gross profit
• Earnings-to-cash conversion (OCF/NI -1.90)
• Visibility on inventories, capex, and cash position due to unreported items

Investment Implications

Key Takeaways:

• Strong YoY revenue (+26.8%) and operating profit (+34.0%) growth with clear operating leverage
• Very thin gross margin (0.7%) offset by sizable other operating items; sustainability uncertain
• ROE at 2.07% remains modest; leverage is conservative (1.47x assets/equity)
• Liquidity is ample (current ratio 197%, working capital ¥85.75bn) and interest burden minimal
• Cash conversion is weak (OCF -¥7.06bn; OCF/NI -1.90), likely from working capital build

Metrics to Watch:

• OCF and working capital components (receivable days, payable days, inventory levels)
• Composition of other operating income/expenses to reconcile OP > gross profit
• Capex and investing cash flows to assess FCF trajectory
• Order intake and production schedules with major OEM customers
• Tax rate normalization and any one-off items

Relative Positioning: Within Japanese auto body/assembly peers, the company shows strong cyclical recovery and superior interest coverage with conservative leverage, but lags on cash conversion and exhibits unusual margin composition that warrants scrutiny versus peers with more balanced gross-to-operating margin structures.

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