| Metric | Current Period | Same Period Last Year | YoY |
|---|---|---|---|
| Revenue | ¥309.0B | ¥299.9B | +3.0% |
| Operating Income | ¥35.0B | ¥33.9B | +3.4% |
| Equity-Method Investment Gain/Loss | - | - | - |
| Ordinary Income | ¥36.0B | ¥34.7B | +3.6% |
| Net Income | ¥24.6B | ¥24.0B | +2.5% |
| ROE | 2.5% | 2.5% | - |
In Q1, the Company recorded increases in both revenue and profit, supported by growth in its wholesale-type business and an improvement in gross margin. Revenue increased to ¥309.0B (+3.0% YoY), Operating Income to ¥35.0B (+3.4%), Ordinary Income to ¥36.0B (+3.6%), and Net Income to ¥24.6B (+2.5%). While the gross margin improved by +0.6pt YoY to 31.7%, the SG&A ratio also rose by +0.6pt to 20.4%; consequently, the improvement in the Operating Income margin was limited to 11.3% (+0.04pt YoY). No extraordinary gains or losses were recorded, and recurring business activities were the primary determinant of earnings.
【Revenue】Revenue increased 3.0% YoY to ¥309.0B. By segment, the wholesale-type business model grew to ¥125.2B (+8.6% YoY), driving overall performance, while the core development-type business model declined slightly to ¥177.0B (-1.0% YoY). Revenue composition was 53.4% for the development-type business, 37.8% for the wholesale-type business, and 8.8% for other businesses, with the development-type business remaining the largest segment.
【Profit and Loss】Operating Income increased 3.4% YoY to ¥35.0B. Although the gross margin improved by +0.6pt YoY to 31.7%, SG&A expenses increased 6.1% YoY to ¥63.1B, outpacing revenue growth, limiting the improvement in the Operating Income margin to +0.04pt. Segment profit for the wholesale-type business increased substantially to ¥14.7B (+18.7% YoY), while the development-type business declined to ¥21.2B (-7.5%) and other businesses declined to ¥1.7B (-15.4%). Ordinary Income increased 3.6% YoY to ¥36.0B, supported by ¥1.1B in non-operating income, including ¥0.3B in dividend income. No extraordinary gains or losses were recorded, and Net Income after deducting ¥11.4B in income taxes and other taxes (effective tax rate: 31.7%) was ¥24.6B (+2.5% YoY). In conclusion, the Company achieved increases in both revenue and profit.
The development-type business model recorded revenue of ¥177.0B (-1.0% YoY), Operating Income of ¥21.2B (-7.5%), and a profit margin of 12.0%, resulting in declines in both revenue and profit despite being the core segment. The wholesale-type business model recorded revenue of ¥125.2B (+8.6% YoY), Operating Income of ¥14.7B (+18.7%), and a profit margin of 11.7%, achieving increases in both revenue and profit and driving company-wide performance. Other businesses, including real estate, logistics, nursing and welfare services, and overseas subsidiaries, recorded revenue of ¥29.1B (+3.8% YoY), Operating Income of ¥1.7B (-15.4%), and a profit margin of 5.9%, representing relatively low profitability. The growth of the wholesale-type business offset the slowdown in the development-type business, and the mismatch in growth rates and profit margins between segments was a characteristic of the current period.
【Profitability】The Operating Income margin was 11.3%, almost unchanged from 11.3% in the prior-year period. The Net Income margin was also 8.0%, remaining roughly unchanged from 8.0% in the prior year. The improvement in gross margin (+0.6pt) was offset by the increase in the SG&A ratio (+0.6pt). 【Cash Flow Quality】Operating Cash Flow (OCF) was -¥35.3B, substantially below Net Income of ¥24.6B. OCF/Net Income was approximately -1.4x, indicating a significant accrual divergence, as increases in trade receivables and decreases in trade payables delayed cash conversion. 【Investment Efficiency】ROE (quarterly, non-annualized) was 2.5%. While the total asset turnover ratio improved to 0.283 from 0.271 in the prior year amid a largely unchanged Net Income margin, the decline in financial leverage associated with the increase in the Equity Ratio constrained ROE growth. 【Financial Soundness】The Equity Ratio improved to 89.3% from 87.3% in the prior year. The current ratio remained extremely high at 831% (current assets of ¥875.1B/current liabilities of ¥105.3B), while interest-bearing debt was virtually zero, indicating a continued conservative financial structure.
OCF was -¥35.3B, with the deficit widening from -¥23.7B in the prior year, as the increase in working capital weighed on income before taxes. The primary factors were an increase in trade receivables (impact of -¥33.5B), a decrease in trade payables (impact of -¥14.4B), an increase in inventories (impact of -¥2.2B), and income taxes and other taxes paid (-¥22.1B). Investing Cash Flow was -¥0.6B, with capital expenditures remaining at a restrained level of ¥0.3B. Financing Cash Flow was -¥18.7B, primarily due to dividend payments of ¥21.1B. As a result, Free Cash Flow was negative at -¥35.9B; however, cash and deposits remained ample at ¥580.3B, substantially exceeding short-term liabilities of ¥105.3B, limiting any direct concern regarding liquidity.
No extraordinary gains or losses were recorded during the period, and recurring business profit and loss determined Net Income. Non-operating income was limited to ¥1.1B (0.4% of revenue), primarily consisting of ¥0.3B in dividend income and ¥0.6B in interest income, indicating sound earnings composition. The ¥11.4B difference between Ordinary Income of ¥36.0B and Net Income of ¥24.6B was attributable to income taxes and other taxes (effective tax rate: 31.7%), with no special factors identified. On the other hand, the fact that OCF was substantially below Net Income (-¥35.3B versus +¥24.6B) indicates a significant accrual gap, or divergence between accrual and cash accounting. The accumulation of trade receivables and inventories delaying the conversion of earnings into cash is an important consideration when assessing earnings quality.
The Q1 progress rates against the full-year plan were 24.0% for revenue (¥309.0B/¥1,290.0B), 28.7% for Operating Income (¥35.0B/¥122.0B), and 28.8% for Ordinary Income (¥36.0B/¥125.0B). Profit progress exceeded the simple progress benchmark of 25% by +3–4pt, reflecting the contribution of improved gross margins to the acceleration of profit progress. The Company made no revisions to either its earnings forecasts or dividend forecasts this time and maintained its full-year plan of revenue growth of +7.0%, Operating Income growth of +2.2%, and Ordinary Income growth of +1.1%. Revenue progress was somewhat slow, and the performance of the development-type segment toward the second half of the fiscal year will be key to achieving the plan.
The Company’s full-year dividend plan is ¥110, representing a substantial increase from ¥50 in the prior fiscal year. Based on the assumed number of shares outstanding (approximately 3,604 ten-thousand shares after deducting treasury shares), total dividends are calculated at approximately ¥39.6B, resulting in an estimated Payout Ratio of approximately 46.4% against the full-year Net Income forecast of ¥85.5B. Although Q1 OCF was negative at -¥35.3B, given the ample cash and deposits of ¥580.3B and the low level of interest-bearing debt, concern regarding the Company’s ability to pay dividends is limited. No information regarding share repurchases was identified.
Working capital deterioration and cash flow risk: OCF was -¥35.3B, substantially below Net Income of ¥24.6B, with OCF/Net Income at approximately -1.4x. The primary factors were an increase in trade receivables (impact of -¥33.5B) and a decrease in trade payables (impact of -¥14.4B), while the lengthening of collection periods weighed on liquidity.
Slowdown in the core segment: The development-type business model recorded revenue of ¥177.0B (-1.0% YoY) and Operating Income of ¥21.2B (-7.5% YoY), resulting in declines in both revenue and profit. This segment accounts for 53.4% of company-wide revenue, and changes in demand trends therefore have a relatively significant impact on overall performance.
Risk of inventory and trade receivables accumulation: Inventories of ¥91.3B and accounts receivable of ¥171.9B both increased from the prior year, relatively increasing the possibility of valuation losses and bad debt expenses when demand fluctuates.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Income Margin | 11.3% | 4.3% (1.7%–6.9%) | +7.1pt |
| Net Income Margin | 8.0% | 3.8% (1.5%–5.1%) | +4.2pt |
| Profitability substantially exceeded the industry median, with both the Operating Income margin and Net Income margin ranking at high levels. |
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 3.0% | 3.1% (-0.6%–11.7%) | -0.1pt |
| Revenue growth was approximately in line with the industry median and did not represent exceptional growth. |
※Source: Compiled by the Company
The Company maintained a trend of increases in both revenue and profit, with the full-year progress rate also proceeding at 28.7% on an Operating Income basis, above the simple progress benchmark of 25%.
On the other hand, OCF remained negative, and the deterioration in working capital due to increases in trade receivables and inventories continued to weigh on cash-generating capacity, an important consideration in assessing earnings quality.
Growth in the wholesale-type business model (Operating Income +18.7%) offset the slowdown in the core development-type business (same: -7.5%). The impact of this growth mismatch between segments on the future earnings structure will be an area of focus.
This is a mechanically calculated reference range based solely on publicly available data using a residual income model (Ohlson-type, explicit 5-year fade). It is not a forecast of the market stock price or a recommendation of any specific investment action.
| Scenario | Theoretical Stock Price |
|---|---|
| bear (bearish) | ¥2,604 |
| base (base case) | ¥2,628 |
| bull (bullish) | ¥2,671 |
| Calculation Assumption | Value |
|---|---|
| Book Value Per Share (BPS) | ¥2,652 |
| Adjusted Forecast EPS | ¥247.5 |
| Cost of Equity r | 9.65% (10-year government bond 2.65% + equity risk premium 6.00% + size premium 1.00%) |
| Residual Income Persistence Factor ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 46.2% |
| Forecast EPS Confidence Adjustment | ×1.037 (based on the historical guidance achievement rate of peer companies) |
| Implied PBR / PER |
Sensitivity: ¥2,557–¥2,703 at ±1% for the cost of equity, and ¥2,627–¥2,629 at ±0.1 for ω.
Notes:
(Calculation model: Residual income model / Interest rate reference month: 2026-06 / This value is not intended to predict or guarantee the future stock price)
This report is an earnings analysis document automatically generated by AI through analysis of XBRL earnings summary data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly available earnings data. Investment decisions should be made at your own responsibility, after consulting with a professional as necessary.
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| 0.99x / 10.6x |
These are mechanically computed values based on a residual income model. They are not a forecast of market prices or a recommendation of any investment action, and do not predict or guarantee future share prices. Historical values are computed retrospectively using current guidance-achievement statistics.