NISHIKAWA KEISOKU Co.,Ltd. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥8.68B
• Operating Income: ¥790M
• Net Income: ¥545M
• EPS: ¥161.11

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

Nishikawa Keisoku (standalone, JGAAP) delivered solid FY2026 Q1 results with double-digit top-line and stronger bottom-line growth, indicating healthy operating leverage. Revenue rose 13.5% YoY to ¥8.68bn, while operating income increased 30.6% YoY to ¥0.79bn, expanding the operating margin to roughly 9.1%. Ordinary income of ¥0.816bn exceeded operating income by about ¥26mn, suggesting modest net non-operating gains. Net income grew 31.6% YoY to ¥0.545bn, lifting the net margin to 6.28% from an estimated ~5.4% a year ago. Gross profit of ¥1.703bn implies a gross margin of 19.6%, supporting the margin expansion narrative at the operating level. Liquidity appears strong: current assets of ¥22.46bn versus current liabilities of ¥12.36bn yield a current ratio of 182% and working capital of ¥10.10bn. The balance sheet is conservatively positioned with total liabilities of ¥13.40bn against equity of ¥20.61bn (D/E 0.65x); the computed equity ratio is about 64.9% despite the reported equity ratio field showing 0.0% (undisclosed). DuPont decomposition shows a 6.28% net margin, 0.273x asset turnover, and 1.54x financial leverage, combining to a reported ROE of 2.64% for the quarter; a simple linear annualization implies ~10–11% if conditions persist. The effective tax rate, based on ordinary income, is approximately 25.4% (¥207.2mn tax on ¥816mn pre-tax), despite the “0.0%” line item in the provided metrics. Cash flow data (OCF/FCF) are unreported, limiting earnings quality assessment and dividend coverage analysis. Inventories, interest expense, and cash balances are also unreported, so quick ratio and interest coverage in the calculated metrics are not decision-useful. EPS is ¥161.11; back-solving indicates roughly 3.38 million shares outstanding, but share count fields are unreported. Overall, Q1 exhibits healthy growth, improved profitability, and a strong balance sheet, but the absence of cash flow disclosures tempers confidence on earnings quality and working capital dynamics. Outlook-wise, the momentum suggests continued margin discipline, with ordinary profit aided slightly by non-operating items. Key uncertainties include demand visibility and the timing of large projects typical in measurement/instrumentation businesses. We analyze only available non-zero data and treat zeros as undisclosed items, not actual zeros.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 6.28%
• asset_turnover: 0.273x
• financial_leverage: 1.54x
• calculated_ROE: 2.64% (quarterly, not annualized)
• commentary: ROE = 6.28% × 0.273 × 1.54 ≈ 2.64% for the quarter; simple linear annualization suggests ~10–11% if quarterly performance is sustained. margin_quality:
• gross_margin: 19.6% (¥1,703mn GP on ¥8,680mn revenue)
• operating_margin: ≈9.1% (¥790mn OI on ¥8,680mn revenue)
• ordinary_margin: ≈9.4% (¥816mn on ¥8,680mn revenue)
• net_margin: 6.28% (¥545mn on ¥8,680mn revenue)
• tax_rate_estimate: ≈25.4% (¥207.2mn tax / ¥816mn pre-tax)
• non_operating_items: Ordinary income exceeds operating income by ~¥26mn, indicating modest net non-operating gains. operating_leverage:
• revenue_growth_YoY: 13.5%
• operating_income_growth_YoY: 30.6%
• implied_effect: Operating margin expansion of roughly +1.2pp vs last year (est. OPM last year ~7.9%), evidencing positive operating leverage.
• drivers_commentary: Improvement likely from mix/price discipline and SG&A efficiency; gross margin supports but GP YoY not disclosed.

Growth Assessment

revenue_sustainability: Top-line growth of 13.5% YoY suggests healthy demand, potentially supported by project deliveries in instrumentation/measurement solutions. Sustainability depends on order backlog and customer capex cycles, which are not disclosed. profit_quality: Net income grew 31.6% YoY to ¥545mn with modest non-operating contribution (~¥26mn). The majority of profit growth is operational, reflecting better margins. outlook: If Q1 conditions persist, margins could remain elevated through the fiscal year. However, project timing and seasonality may cause volatility; asset turnover appears low on a quarterly basis, implying potential ramp through the year.

Financial Health

liquidity:

• current_ratio: 181.7% (¥22.456bn / ¥12.361bn)
• quick_ratio: Reported as 181.7%, but inventories are undisclosed; treat as equivalent to current ratio due to data limitation.
• working_capital: ¥10,095mn
• cash_position: Cash and equivalents are undisclosed; liquidity judgment is based on current assets composition not provided. solvency:
• total_assets: ¥31,771mn
• total_liabilities: ¥13,401mn
• total_equity: ¥20,607mn
• debt_to_equity: 0.65x (using total liabilities/equity as a proxy due to undisclosed interest-bearing debt split)
• equity_ratio: ≈64.9% (computed as equity/assets; the reported 0.0% is undisclosed, not zero). capital_structure: Balance sheet is conservatively leveraged with ample equity. Interest expense is undisclosed; therefore, interest coverage cannot be assessed from the provided data.

Cash Flow Quality

earnings_quality: OCF is undisclosed; OCF/Net Income shows as 0.00 due to missing data. As such, we cannot validate the conversion of earnings to cash. FCF_analysis: Both operating and investing cash flows are undisclosed, so FCF cannot be computed. Capex and depreciation are also undisclosed (D&A shows as 0, likely not reported). working_capital: Receivables, payables, and inventory details are not disclosed. The sizable working capital (¥10.1bn) suggests material working capital intensity typical of project-based or distribution businesses, but cash conversion timing cannot be assessed.

Dividend Sustainability

payout_ratio_assessment: Annual DPS and payout ratio are shown as 0.00%, which indicates non-disclosure, not an actual zero payout. With EPS at ¥161.11 for Q1, quarterly earnings capacity is evident, but the actual dividend policy is not provided. FCF_coverage: Not assessable due to undisclosed operating and investing cash flows. policy_outlook: No guidance or policy disclosed in the data set. Absent cash flow visibility and historical payout information, dividend sustainability cannot be evaluated.

Risk Assessment

Business Risks:

• Demand cyclicality tied to industrial, energy, and infrastructure capex cycles affecting measurement/instrumentation projects.
• Project timing risk leading to revenue and margin volatility quarter to quarter.
• Supplier concentration and pricing power if the company distributes or integrates third-party equipment.
• Foreign exchange exposure on imported equipment or components, potentially impacting gross margins.
• Execution risk on complex systems integration affecting cost overruns and delivery schedules.

Financial Risks:

• Working capital swings given large receivables and advance payments typical in project businesses; cash conversion is unverified due to undisclosed OCF.
• Counterparty credit risk on trade receivables; receivables quality not disclosed.
• Refinancing or interest rate risk cannot be quantified with undisclosed debt composition and interest expense.
• Potential mismatch between revenue recognition and cash receipts affecting near-term liquidity.

Key Concerns:

• Lack of cash flow disclosure impedes assessment of earnings quality and dividend capacity.
• Inventory and cash balances are undisclosed, limiting the precision of liquidity analysis.
• Quarterly DuPont and asset turnover metrics may be distorted by seasonality; annual context is needed.

Investment Implications

Key Takeaways:

• Strong Q1 with 13.5% revenue growth and 30.6% operating profit growth demonstrates healthy operating leverage.
• Operating margin improved to ~9.1% and net margin to 6.28%, aided slightly by non-operating gains.
• Balance sheet appears robust with D/E of 0.65x and an estimated equity ratio near 65%.
• Liquidity is comfortable (current ratio ~182%), but true cash position is unknown.
• Earnings quality cannot be confirmed without OCF/FCF data; monitor cash conversion closely.

Metrics to Watch:

• Order intake and backlog to gauge revenue sustainability.
• Gross margin and SG&A ratio for signs of margin durability.
• Operating cash flow to net income conversion and working capital days (DSO/DPO/DOH).
• Equity ratio and any changes in interest-bearing debt composition.
• Dividend policy disclosures and any guidance on payout.

Relative Positioning: Within Japan’s instrumentation/distribution peers, the company shows solid near-term growth and margin momentum with conservative leverage; however, comparability is constrained by the absence of cash flow disclosure and the standalone (non-consolidated) basis.

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