Hirogin Holdings,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥18.39B
• EPS: ¥67.77

Income Statement

Balance Sheet

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

Hirogin Holdings (7337) reported FY2026 Q2 consolidated net income of ¥20.378bn, up 10.7% YoY, indicating resilient core profitability despite limited disclosed line items typical for Japanese bank XBRL in interim periods. Operating income and ordinary income are both shown at ¥29.292bn, suggesting stable operating trends, though the identical figures imply aggregation under JGAAP bank presentation rather than true zero YoY change. With total assets of ¥12.504tn and total equity of ¥547.278bn at period end, balance-sheet leverage stands at 22.85x, consistent with a deposit-funded regional bank. Using period-end figures, half-year ROA approximates 0.16% (¥20.378bn / ¥12.504tn) and half-year ROE approximates 3.7% (¥20.378bn / ¥547.278bn); annualized, these imply roughly 0.3% ROA and 7–8% ROE, respectively, though this relies on assumptions due to missing averages. The effective tax rate approximates 28.1% (¥7.981bn tax on ~¥28.359bn pre-tax profit), within a normal range for domestic banks. Equity ratio is undisclosed (displayed as 0.0%), but the simple equity-to-asset ratio is about 4.4%, reflecting typical sector characteristics rather than stress. Cash flow figures (operating, investing, financing) are not provided, which is common for banks and should not be interpreted as zero activity. Dividend information is not disclosed here (DPS and payout appear as zero placeholders), so dividend affordability must be assessed qualitatively against earnings capacity and capital sufficiency. Efficiency ratios derived from revenue (gross margin, EBITDA margin, asset turnover) are not meaningful for banks given revenue is undisclosed in this dataset. The positive YoY earnings trajectory points to supportive conditions such as modest loan growth, fee income stability, or lower credit costs; however, the absence of segment details (net interest income, fees, securities-related gains/losses, and credit costs) limits attribution. Balance-sheet scale at ¥12.5tn assets underscores a large franchise for a regional group, with leverage aligned to deposit funding and securities portfolios. Ordinary income equals operating income in the disclosure, suggesting non-operating impacts were minimal, though unrealized securities valuation movements may not be fully visible without OCI data. The capital base of ¥547bn provides loss-absorption capacity, but formal regulatory capital ratios (CET1, total capital) are not disclosed here and are critical for dividend and growth capacity. Overall, the interim performance indicates improved earnings with manageable taxation and stable leverage, yet the lack of cash flow and capital metrics necessitates caution in drawing firm conclusions. Monitoring interest rate sensitivity, credit cost normalization, and securities valuation impacts remains important into the second half. Data gaps (revenue, OCF, DPS, capital ratios) are material, so conclusions rely on banking-appropriate proxies and period-end balances.

Profitability Analysis

ROE decomposition must be adapted because revenue is undisclosed and the reported DuPont ‘net margin’ and ‘asset turnover’ are placeholders. Using banking proxies: ROA ≈ 0.16% for H1 (¥20.378bn / ¥12.504tn), leverage ≈ 22.85x, and implied half-year ROE ≈ 3.7% (annualized ~7–8%), assuming average balances are close to period-end. Net income growth of 10.7% YoY indicates improved profitability, likely from a combination of net interest margin tailwinds, volume growth, fee income, and/or benign credit costs; however, the lack of breakdown prevents precise attribution. Ordinary income equals operating income at ¥29.292bn, implying limited non-operating items in the period under JGAAP presentation. Margin quality: the effective tax rate is ~28.1%, consistent with normalized tax. Without interest income/expense and credit cost disclosure, underlying margin quality (NIM vs. securities income vs. fees) cannot be disaggregated. Operating leverage cannot be quantified because operating expenses and revenue are not disclosed; nonetheless, higher net income with stable ordinary income suggests some expense discipline or lower credit costs. For a regional bank, mid-single-digit annualized ROE is consistent with sector norms; sustaining ~7%+ ROE will depend on maintaining NIM amid rate shifts, controlling credit costs, and stabilizing securities-related P&L.

Growth Assessment

Revenue is undisclosed, but net income rose 10.7% YoY to ¥20.378bn, evidencing earnings growth. Sustainability hinges on: (1) net interest income resilience as domestic rate normalization affects deposit betas and securities yields; (2) fee income from settlement, asset management, and corporate services; and (3) credit costs, which could normalize upward from cyclical lows. Ordinary income at ¥29.292bn suggests core earnings improved or held steady, but the absence of segment detail limits clarity on the growth driver mix. Securities portfolio gains/losses are a swing factor for regional banks; lack of OCI and valuation data constrains visibility on sustainability. Loan growth in the Hiroshima/Chugoku footprint and SME demand likely underpin volume trends, while competition caps pricing power. Outlook into 2H: steady but moderating growth if funding costs rise, with upside from fee initiatives and cost control, and downside from credit cost normalization and market valuation volatility. Absent explicit guidance, baseline assumes stable ordinary income and mid- to high-single-digit full-year profit growth if credit costs remain contained.

Financial Health

Total assets are ¥12.504tn, liabilities ¥11.627tn, and equity ¥547.278bn, implying an equity-to-asset ratio of ~4.4% and financial leverage of 22.85x, typical for deposit-funded banks. The displayed current and quick ratios are not meaningful for banks and are unreported placeholders. Debt-to-equity at 21.25x reflects funding via deposits and market liabilities; not directly comparable to non-financial corporates. Solvency assessment requires regulatory capital (CET1, total capital ratios) which are not disclosed here; however, the absolute equity base appears consistent with a sizable regional bank. Liquidity health cannot be inferred from current ratio; key indicators (LCR, NSFR, deposit mix, duration gap) are not disclosed. The effective tax burden (~28%) indicates normal profitability without outsized deferred tax effects. Overall balance-sheet scale and leverage are in line with peers, but definitive solvency and liquidity conclusions await capital and liquidity ratio disclosures.

Cash Flow Quality

Cash flow data (operating, investing, financing, cash & equivalents) are undisclosed in this dataset; zeros are placeholders, common for bank interim XBRL. For banks, OCF is less indicative than earnings composition and credit cost quality. Earnings quality appears acceptable given alignment between ordinary income (¥29.292bn) and net income (¥20.378bn) with a normal tax rate (~28%), suggesting limited reliance on one-off items within the reported period. Free cash flow is not a meaningful concept for deposit-taking institutions in the same way as for industrials; instead, focus should be on core earnings, credit costs, and securities valuation impacts. Working capital metrics are not applicable. To assess cash flow quality, additional disclosures are needed on net interest income trajectory, fee income stability, realized/unrealized securities gains, and allowance movements.

Dividend Sustainability

Dividend per share and payout ratio are not disclosed here (zeros are placeholders). EPS is ¥67.77 for the interim period, implying capacity for distributions subject to capital requirements and internal growth needs. In practice, Japanese regional banks target stable to progressive dividends with payout anchored by earnings visibility and capital buffers; sustainability depends on regulatory capital (CET1) and stress resilience. Without FCF data (not relevant for banks) and without capital ratios, we cannot quantify coverage. Qualitatively, mid‑single‑digit to high‑single‑digit annualized ROE typically supports ongoing dividends if credit costs remain contained and securities valuation risk is managed. Policy outlook will hinge on management guidance, capital adequacy, and earnings visibility into 2H; confirmation of capital ratios and any share repurchase plans is required for a firm view.

Risk Assessment

Business Risks:

• Interest rate risk affecting net interest margin as deposit betas rise and securities reprice
• Market valuation risk on bond and equity securities portfolios (OCI volatility and realized gains/losses)
• Credit cost normalization from low levels, particularly SME exposures in the regional economy
• Regional concentration in Hiroshima/Chugoku, exposing earnings to local macro cycles and demographics
• Competitive pressure on loan pricing and fees from megabanks and fintech
• Fee income execution risk in asset management and solutions businesses

Financial Risks:

• High leverage inherent to banking (assets/equity ~22.85x) amplifies shocks
• Liquidity risk from potential deposit outflows; lack of LCR/NSFR disclosure here
• Duration and convexity risk in securities book amid rate volatility
• Capital adequacy uncertainty due to absent CET1/total capital ratios in this dataset
• Potential for higher effective tax burden or deferred tax asset volatility under stress

Key Concerns:

• Material data gaps: revenue, expense breakdown, cash flows, dividends, and regulatory capital ratios
• Earnings sensitivity to market movements given probable securities holdings
• Visibility on credit cost trajectory into 2H is limited without disclosed provisioning details

Investment Implications

Key Takeaways:

• Net income rose 10.7% YoY to ¥20.378bn, evidencing solid interim performance
• Ordinary income and operating income reported at ¥29.292bn, implying stable core operations
• Balance-sheet leverage is 22.85x with equity of ¥547.278bn and assets of ¥12.504tn
• Half-year ROA ~0.16% and ROE ~3.7% (annualized ~0.3% and ~7–8%) based on period-end balances
• Effective tax rate ~28.1%, suggesting normalized taxation
• Cash flow and dividend data are undisclosed; conclusions rely on earnings proxies
• Liquidity and solvency cannot be fully assessed without regulatory capital and liquidity ratios

Metrics to Watch:

• Net interest margin and deposit beta progression
• Loan growth and mix (SME vs. retail, fixed vs. floating rate)
• Credit costs (provisioning) and NPL trends
• Securities gains/losses and OCI movements; duration positioning
• Regulatory capital ratios (CET1, total capital) and any buffer over regulatory minima
• Dividend guidance and potential share repurchases
• Fee income trajectory (settlement, asset management, corporate solutions)

Relative Positioning: Performance and leverage appear in line with Japanese regional bank peers, with improving earnings but typical sector sensitivities to rates, credit costs, and securities valuation; definitive relative strength requires capital and segment disclosure.

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