| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue | ¥409.2B | ¥400.2B | +2.3% |
| Operating Income | ¥24.3B | ¥17.8B | +36.1% |
| Equity-Method Investment Income (Loss) | ¥0.7B | ¥0.2B | +170.8% |
| Ordinary Income | ¥29.7B | ¥23.6B | +25.6% |
| Net Income | ¥15.8B | ¥10.8B | +46.5% |
| ROE | 3.8% | 2.7% | - |
For the fiscal year ended March 2026, Revenue was ¥409.2B (YoY +¥9.0B +2.3%), Operating Income was ¥24.3B (YoY +¥6.4B +36.1%), Ordinary Income was ¥29.7B (YoY +¥6.0B +25.6%), and Net Income was ¥15.8B (YoY +¥5.0B +46.5%). The company achieved both revenue and profit growth; notably Operating Margin improved from 4.5% to 5.9% (+1.4pt) and Net Margin improved from 2.7% to 3.9% (+1.2pt). Gross margin improved from 20.9% to 21.6% (+0.7pt) and SG&A ratio improved from 16.5% to 15.7% (-0.8pt), indicating overall profitability enhancement. Non-operating income totaled ¥5.7B (including interest income ¥2.5B and equity-method investment gains ¥0.7B) versus non-operating expenses ¥0.3B, producing net non-operating income of ¥5.4B. Extraordinary items were a net positive of ¥1.7B (gain on sale of investment securities ¥7.3B offset by impairment losses ¥6.0B), supporting pretax income of ¥31.3B. After deducting tax expense ¥10.4B, Net Income attributable to parent was ¥15.8B. EPS was ¥81.40 (from ¥57.97 prior year, +40.4%) and BPS was ¥1,584.66, indicating increased per-share value.
[Revenue] Revenue of ¥409.2B (+2.3%) represented modest growth. By region, Americas revenue was ¥141.1B (+3.3%), ASEAN ¥32.0B (+5.4%), Japan ¥220.6B (+2.6%), Europe ¥14.9B (+4.6%)—all increasing—while China revenue was ¥23.7B (-15.4%) and Taiwan ¥10.9B (-11.3%) declined. Revenue mix was Japan 53.9%, Americas 34.5%, ASEAN 7.8%, China 5.8%, with overseas ratio about 46%. Improvement in gross margin to 21.6% (from 20.9% +0.7pt) was driven by a reduction in cost of sales ratio (78.3%), reflecting improved profitability in overseas segments and progress in cost management.
[Profitability] Operating Income ¥24.3B (+36.1%) was driven by an increase in gross profit to ¥88.6B (from ¥83.8B, +¥4.7B +5.6%) and suppression of SG&A to ¥64.3B (from ¥66.0B, -¥1.7B -2.6%). SG&A ratio improved to 15.7% (from 16.5% -0.8pt); salaries and allowances ¥24.5B rose slightly but efficiency improved relative to revenue growth. Ordinary Income ¥29.7B (+25.6%) was boosted by non-operating income ¥5.7B (interest income ¥2.5B, dividend income ¥0.8B, equity-method investment income ¥0.7B, foreign exchange gains ¥0.4B, etc.), while non-operating expenses were minor at ¥0.3B (interest expense ¥0.1B, foreign exchange loss ¥0.2B, etc.). Extraordinary gains ¥7.9B (primarily gain on sale of investment securities ¥7.3B) offset extraordinary losses ¥6.2B (primarily impairment losses ¥6.0B), contributing net ¥1.7B to pretax income of ¥31.3B. After corporate taxes ¥10.4B (effective tax rate 33.2%), Net Income was ¥15.8B (+46.5% YoY). In summary, revenue growth combined with improved gross margin and SG&A ratio and stable non-operating income led to revenue and profit increases.
Americas Operating Income ¥8.9B (+62.3%), margin 6.3% (from 4.0% +2.3pt) with substantial improvement. ASEAN Operating Income ¥4.5B (+22.4%), margin 14.2% (from 12.2% +2.0pt) maintained at high level. Japan Operating Income ¥9.8B (+0.4%), margin 4.4% (from 4.5% slight decline) was flat. China reported an operating loss of ¥0.9B (loss narrowed 59.6% from prior year ▲¥2.3B), margin ▲4.0% (improved from ▲8.3%). Europe Operating Income ¥1.7B (+135.6%), margin 11.2% (from 5.0% +6.2pt) with significant improvement. Taiwan Operating Income ¥0.3B (-29.3%), margin 2.8% (from 3.5% -0.7pt) declined. Higher-margin regions Americas, ASEAN, and Europe drove consolidated operating income growth, and China’s narrower loss also contributed. Japan showed stable modest growth, while Taiwan contrasted with revenue and profit decline. Improvement in regional mix resulted in consolidated operating margin of 5.9% (from 4.5% +1.4pt).
[Profitability] Operating margin 5.9% (from 4.5% +1.4pt) and Net margin 3.9% (from 2.7% +1.2pt) show overall profitability improvement. ROE 3.8% (Net margin 3.9% × Total Asset Turnover 0.85x × Financial Leverage 1.17x) declined slightly from 4.0% last year, though improvement in Net margin contributed. Gross margin 21.6% (from 20.9% +0.7pt) and SG&A ratio 15.7% (from 16.5% -0.8pt) both improved, supporting Operating margin expansion. [Cash Quality] Operating Cash Flow (OCF) ¥25.2B is 1.6x Net Income ¥15.8B, indicating good cash realization of profits. OCF/EBITDA ratio 0.73x (EBITDA = Operating Income ¥24.3B + Depreciation ¥10.2B = ¥34.5B) suggests room to improve cash conversion. Working capital changes included AR collections improvement contributing ¥17.2B, while AP decrease ¥22.7B and inventory increase ¥5.6B were cash outflows. [Investment Efficiency] Total Asset Turnover 0.85x (from 0.82x slight improvement). Capital expenditures ¥17.3B were 1.7x depreciation ¥10.2B, indicating proactive investment. Construction in progress ¥11.1B (from ¥3.9B significant increase) shows investment progress. [Financial Soundness] Equity Ratio 85.3% (from 81.4% +3.9pt), Current Ratio 631% (from 475% greatly improved), Quick Ratio 528%—extremely healthy. Cash and deposits ¥226.0B cover current liabilities ¥59.0B by 3.8x. Interest-bearing debt is minimal and Interest Coverage is 302x (Operating Income ¥24.3B ÷ Interest Expense ¥0.08B), showing strong ability to service interest.
OCF ¥25.2B (from ¥27.6B -8.7%) started from pretax income ¥31.3B, adding back non-cash expenses including depreciation ¥10.2B and impairment losses ¥6.0B, and deducting non-cash income such as gain on sale of investment securities ¥7.3B and equity-method investment income ¥0.7B, resulting in subtotal OCF ¥29.3B. In working capital, AR decrease ¥17.2B was a positive contributor, while AP decrease ¥22.7B and inventory increase ¥5.6B were outflows. After corporate taxes paid ¥8.6B, OCF ¥25.2B equals 1.6x Net Income ¥15.8B—cash conversion of profits is solid but declined YoY due to working capital deterioration. Investing Cash Flow was ▲¥31.6B, driven by capital expenditures ¥17.3B and time deposits increase ¥24.0B. Proceeds from sale of fixed assets ¥0.6B and proceeds from sale of investment securities ¥8.7B partially offset. Financing Cash Flow was ▲¥13.5B, comprising dividend payments ¥9.1B, share buybacks ¥2.9B, and lease liabilities repayment ¥1.3B. Free Cash Flow was ▲¥6.4B (OCF ¥25.2B - Investing CF ¥31.6B), negative due to investment-led spending. Cash ending balance ¥151.2B decreased ¥19.0B from prior ¥170.2B but the company maintains ample liquidity with cash and deposits ¥226.0B. Cash conversion ratio 0.73x indicates room for improvement; inventory and accounts payable management efficiency will be key to improving cash generation next period.
The gap between Ordinary Income ¥29.7B and Net Income ¥15.8B is mainly due to net extraordinary items ¥1.7B (gain on sale of investment securities ¥7.3B - impairment losses ¥6.0B) and tax cost ¥10.4B. Non-operating income ¥5.7B consists of interest income ¥2.5B, equity-method investment income ¥0.7B, dividend income ¥0.8B, FX gains ¥0.4B, etc., with financial income and equity-method gains reinforcing recurrent income. However, most of the extraordinary gain ¥7.9B was a one-off gain on sale of investment securities ¥7.3B, and most of extraordinary loss ¥6.2B was non-cash impairment losses ¥6.0B—both non-recurring. Comprehensive income ¥26.3B exceeds Net Income by ¥10.5B, primarily due to foreign currency translation adjustments ¥5.8B reflecting currency effects from overseas operations. Comprehensive income attributable to owners of the parent ¥25.9B is ¥10.1B above Net Income, contributed by FX-driven valuation changes. OCF ¥25.2B is 1.6x Net Income ¥15.8B, indicating strong cash backing for profits and a low accrual ratio. However, working capital dynamics—AP decrease and inventory increase—temporarily pressured cash and future normalization will affect sustainability of earnings quality. Recurring earnings power is estimated around Operating Income ¥24.3B + financial income (interest/dividend/equity-method gains) approximately ¥4.0B = about ¥28B, suggesting solid sustainable earnings excluding one-off items.
Full Year guidance: Revenue ¥430.0B (+5.1%), Operating Income ¥25.5B (+5.1%), Ordinary Income ¥30.0B (+1.1%), Net Income ¥21.0B (EPS ¥82.00), Dividend ¥22.50 (Full Year). Assuming maintenance of a 5.9% Operating Margin, the slower growth in Ordinary Income relative to Operating Income implies a conservative outlook for non-operating income. Net Income guidance ¥21.0B represents +32.9% growth from current ¥15.8B but a deceleration compared to prior YoY, assumed due to reduced one-off item contribution. Payout Ratio 58.6% (¥22.50 ÷ EPS ¥82.00 ×100, after stock split adjustment) maintains existing level. Progress towards guidance is already high: revenue 95.2% (¥409.2B ÷ ¥430.0B) and Operating Income 95.3% (¥24.3B ÷ ¥25.5B), so the full-year guidance appears largely achievable and conservative. There is upside potential depending on FX assumptions and second-half demand trends, but the plan is assessed as prudent given one-off item uncertainty.
Dividends were interim dividend ¥37.00 (pre-split) and forecast year-end dividend ¥18.50 (post-split), totaling the equivalent of ¥74.00 for the year (pre-split equivalent). A 1-for-2 stock split was implemented effective January 1, 2026, so the year-end dividend ¥18.50 is equivalent to ¥37.00 pre-split. Payout Ratio is 58.6% (company disclosed) at a mid-level; total dividends amounted to approximately ¥8.9B against Net Income ¥15.8B (payout ratio basis). Share buybacks of ¥2.9B were executed, making total shareholder return dividend ¥8.9B + buybacks ¥2.9B = approximately ¥11.8B. Despite FCF of ▲¥6.4B, total return ¥11.8B is maintained against ample cash and deposits ¥226.0B. Total Return Ratio (dividend + buybacks) equals about 75% of Net Income ¥15.8B, a high level, but financial soundness (Equity Ratio 85.3%, Current Ratio 631%) supports return capacity. Full-year dividend guidance ¥22.50 (post-split, equivalent annual ¥44.00) implies payout ratio 54.9% (¥22.50×2 ÷ ¥82.00) relative to EPS ¥82.00, similar to prior year and sustainable. Share buybacks executed ¥2.9B during the year; continuation is uncertain but signals intent to improve capital efficiency. Dividends have been maintained at the same level for three consecutive years (post-split adjusted), reflecting a stable dividend policy.
Dependence on automotive production cycles: Performance is linked to production adjustments and model cycles of major customers. It is estimated that a majority of revenue is related to automotive parts; production cuts or order declines by automakers will compress revenue and profits. Region concentration—Americas 34.5%, Japan 53.9%—means regional automotive production trends directly affect results.
Inventory efficiency and working capital risk: Inventory ¥61.1B (from ¥55.1B +10.9%) has increased; inventory days (Inventory ÷ Cost of Sales × 365) are approximately 70 days (from about 64 days, deteriorating). Working capital trends—AP decrease ¥22.7B and inventory increase ¥5.6B—have pressured OCF, and OCF/EBITDA ratio 0.73x indicates room for improvement. Continued inventory increases would reduce cash generation and constrain investment and return capacity.
Volatility from non-recurring items and earnings variability: Net extraordinary items net ¥1.7B (gain on sale of investment securities ¥7.3B, impairment losses ¥6.0B) represent about 11% of Net Income ¥15.8B, and there is sizable volatility in converting Ordinary Income ¥29.7B to Net Income. Timing of investment securities sales or impairment recognition can materially affect Net Income, creating uncertainty in assessing sustainable earnings power.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 5.9% | 3.4% (1.4%–5.0%) | +2.6pt |
| Net Margin | 3.9% | 2.3% (1.0%–4.6%) | +1.6pt |
Both Operating Margin and Net Margin exceed industry medians, placing the company in the upper ranks for profitability.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 2.3% | 5.9% (0.4%–10.7%) | -3.6pt |
Revenue growth lags the industry median, indicating a cautious growth pace.
※ Source: Company compilation
Profitability improvement and stronger earnings in overseas segments: Operating Margin 5.9% (from 4.5% +1.4pt) and Net Margin 3.9% (from 2.7% +1.2pt) show significant improvement. Both gross margin 21.6% (+0.7pt) and SG&A ratio 15.7% (-0.8pt) contributed. Earnings growth in higher-margin segments Americas, ASEAN, and Europe drove consolidated operating income, while China’s loss narrowing also progressed. Key points include sustainability of improved regional mix and further margin improvement potential in the Japan segment.
Room to improve cash conversion and working capital efficiency: OCF ¥25.2B is 1.6x Net Income ¥15.8B, indicating good cash conversion but OCF/EBITDA 0.73x suggests room to improve. AP decrease ¥22.7B and inventory increase ¥5.6B pressured working capital, and FCF ▲¥6.4B reflects investment-first posture. Improving inventory efficiency and normalizing AP will be key to enhancing cash generation and sustaining investment and return policies.
Volatility from non-recurring items and assessment of sustainable earnings: Net extraordinary items net ¥1.7B (gain on sale of investment securities ¥7.3B, impairment losses ¥6.0B) provided temporary contribution to Net Income. Recurring earnings power is estimated around Operating Income ¥24.3B + financial income approx. ¥4.0B = about ¥28B. The full-year guidance assumes removal of one-off contributions, targeting Net Income ¥21.0B conservatively; monitoring progress on Ordinary Income basis is important for evaluating sustainable earnings.
This report is an AI-generated financial analysis document produced by analyzing XBRL financial statement data. It is not a recommendation to invest in any particular security. Industry benchmarks are reference data compiled by the company based on publicly available financial statements. Investment decisions should be made at your own responsibility; consult professional advisors as needed.