ICHIKOH INDUSTRIES,LTD. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥86.14B
• Operating Income: ¥3.74B
• Net Income: ¥2.65B
• EPS: ¥40.26

Income Statement

Balance Sheet

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

Ichikoh Industries (TSE:7244) reported FY2025 Q3 consolidated results under JGAAP showing a notable improvement in profitability despite a revenue decline. Revenue was ¥86.141 billion, down 6.4% YoY, while operating income rose 72.7% YoY to ¥3.739 billion, indicating successful cost control and/or pricing/mix improvements. Gross profit was ¥15.58 billion, implying a gross margin of 18.1%, with an operating margin of approximately 4.3%. Ordinary income reached ¥4.982 billion, outpacing operating income due to limited non-operating burdens; net income came in at ¥3.873 billion, up 52.6% YoY, yielding a net margin of 4.5%. Interest expense was modest at ¥95 million, and interest coverage was a robust 39.4x, highlighting limited financial burden from debt-like obligations. Total assets were ¥121.363 billion and total equity ¥73.246 billion, implying an equity-to-asset ratio of about 60.3% (the reported equity ratio field shows 0.0% due to non-disclosure conventions). Total liabilities were ¥59.138 billion, resulting in a liabilities-to-equity ratio of approximately 0.81x. Liquidity appears adequate with a current ratio of 138.3% and quick ratio of 134.4%, supported by ¥18.43 billion in working capital. The DuPont framework indicates a calculated ROE of 5.29%, driven by a 4.50% net margin, 0.710x asset turnover, and 1.66x financial leverage. Revenue softness alongside margin expansion suggests favorable operating leverage and/or improved product mix (e.g., higher LED content) and procurement efficiencies. Cash flow statements and depreciation were not disclosed in the dataset (zeros indicate unreported), preventing assessment of EBITDA, free cash flow, and capex intensity this quarter. Based on ordinary income and stated income tax of ¥1.359 billion, the implied effective tax rate is roughly 27%, broadly consistent with domestic norms. With no dividend data disclosed (DPS 0.00 reflects non-disclosure), payout trends and FCF coverage cannot be evaluated this quarter. Overall, the company exhibits solid balance sheet resilience, strong interest coverage, and improving profitability, though the sustainability of margin gains amid lower sales warrants monitoring. Data limitations, particularly absent cash flow and depreciation details, temper the depth of earnings quality assessment. Near-term outlook hinges on OEM production schedules, price pass-through dynamics, product mix, and FX.

Profitability Analysis

ROE_decomposition: ROE 5.29% = Net Profit Margin 4.50% × Asset Turnover 0.710 × Financial Leverage 1.66. The ROE profile is currently margin-led with moderate asset turnover and modest leverage. margin_quality: Gross margin 18.1% and operating margin ~4.3% reflect improved cost discipline and/or better mix relative to prior-year weakness (operating income +72.7% YoY despite revenue -6.4% YoY). Ordinary income exceeded operating income, and interest expense was only ¥95m, indicating limited non-operating drag. Net margin at 4.5% is healthy for the auto lighting segment. operating_leverage: Positive operating leverage is evident: lower sales with sharply higher operating profit implies fixed cost absorption has improved and/or price/mix gains (e.g., LED headlamp penetration) offset volume declines. Further gains may hinge on sustaining procurement savings and stable OEM schedules.

Growth Assessment

revenue_sustainability: Revenue of ¥86.141b (-6.4% YoY) indicates end-demand or program timing softness. Sustainability depends on the launch cadence of new lighting programs, customer production normalization, and FX effects. profit_quality: Net income rose 52.6% YoY to ¥3.873b. Interest coverage of 39.4x and limited financial charges support earnings durability. However, lack of depreciation and cash flow disclosures precludes triangulation of non-cash earnings and capex burden this quarter. outlook: If efficiency and mix gains persist, operating margin near 4%+ appears defensible even with modest volume pressure. Key swing factors include OEM production recovery, raw material and logistics normalization, and continued price pass-through to offset inputs.

Financial Health

liquidity: Current ratio 138.3% and quick ratio 134.4% indicate comfortable short-term liquidity; working capital stands at ¥18.43b. Cash and cash equivalents were not disclosed this quarter. solvency: Total liabilities ¥59.138b versus equity ¥73.246b imply a liabilities-to-equity ratio of ~0.81x and an equity-to-asset ratio of ~60.3% (reported equity ratio field is undisclosed). Interest expense is low (¥95m), supporting solvency. capital_structure: Financial leverage used in DuPont is 1.66x (Assets/Equity), indicating a conservative capital structure relative to many auto suppliers. Specific interest-bearing debt data are not provided in the dataset.

Cash Flow Quality

earnings_quality: OCF and depreciation were not disclosed (zeros reflect non-disclosure). Therefore, accrual intensity, cash conversion, and non-cash items cannot be evaluated this quarter. FCF_analysis: Free cash flow was not disclosed; capex cannot be inferred without depreciation and investing cash flow data. As such, FCF coverage of earnings is indeterminable. working_capital: With current assets of ¥66.512b and current liabilities of ¥48.082b, working capital is ¥18.43b. Inventories are reported at ¥1.888b, suggesting low inventory intensity or classification differences; detailed composition is not available.

Dividend Sustainability

payout_ratio_assessment: DPS 0.00 and payout ratio 0.0% reflect non-disclosure rather than actual zero distributions. Without dividend and cash flow data, payout sustainability cannot be assessed. FCF_coverage: Not assessable due to undisclosed operating and investing cash flows in the period. policy_outlook: No guidance on dividend policy is available in the dataset. Future distributions would depend on sustained profitability, capex for new programs, and cash generation.

Risk Assessment

Business Risks:

• OEM production volatility and program timing affecting volumes
• Pricing pressure from automaker customers
• Product mix risk tied to LED and advanced lighting adoption
• Raw material and energy cost fluctuations
• FX exposure (e.g., USD/EUR vs. JPY) impacting margins and translation
• Technological disruption in ADAS/lighting integration and modularization
• Geopolitical and supply chain disruptions affecting components

Financial Risks:

• Potential working capital swings tied to tooling and launch cycles
• Capex intensity for new lighting programs reducing FCF in certain quarters
• Concentration risk if a few OEMs account for a large share of sales
• Limited visibility on debt maturity profile given undisclosed cash flow details

Key Concerns:

• Revenue decline (-6.4% YoY) despite profit improvement—sustainability of margin gains
• Absence of cash flow and depreciation data, limiting earnings quality assessment
• Sensitivity to OEM demand normalization and production schedules

Investment Implications

Key Takeaways:

• Revenue ¥86.141b (-6.4% YoY) with strong operating profit growth (+72.7% YoY) signals effective cost/mix management.
• Net margin 4.5% and interest coverage 39.4x illustrate healthy profitability and low financial burden.
• ROE 5.29% is driven primarily by margin improvement rather than leverage.
• Balance sheet appears resilient with liabilities/equity ~0.81x and implied equity ratio ~60%.
• Cash flow and depreciation not disclosed this quarter; FCF and EBITDA cannot be assessed.

Metrics to Watch:

• Operating cash flow and capex (to validate earnings-to-cash conversion)
• Depreciation and tooling amortization (to assess EBITDA and investment needs)
• Operating margin progression and price pass-through efficacy
• Order pipeline and launch schedule for new lighting programs
• FX impacts and raw material cost trends
• Asset turnover trends versus peers

Relative Positioning: Within Japanese auto parts peers, profitability is mid-range with improving margins and a conservative balance sheet; visibility on FCF is currently limited due to non-disclosure in this quarter’s cash flow statements.

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