| Metric | Current Period | Prior-year Q3 | YoY |
|---|---|---|---|
| Revenue | ¥57.9B | ¥51.5B | +12.5% |
| Operating Income | ¥3.9B | ¥3.5B | +12.0% |
| Ordinary Income | ¥3.9B | ¥3.5B | +12.3% |
| Net Income | ¥2.6B | ¥2.3B | +12.3% |
| ROE | 16.0% | 16.4% | - |
Micreed Co., Ltd.’s FY2026 Q3 results delivered double-digit growth across all key metrics: Revenue ¥57.9B (YoY +¥6.4B, +12.5%), Operating Income ¥3.9B (YoY +¥0.4B, +12.0%), Ordinary Income ¥3.9B (YoY +¥0.4B, +12.3%), and Net Income ¥2.6B (YoY +¥0.3B, +12.3%). Gross Profit was ¥19.9B with a high Gross Margin of 34.4%, and Operating Margin held steady at 6.8% versus the prior-year Q3. Total Assets were ¥28.3B (YoY +¥5.1B), and Net Assets were ¥16.1B (YoY +¥2.2B), indicating expansion of the asset base alongside accumulation of equity. The full-year forecast calls for Revenue of ¥75.0B (+10.7%) and Operating Income of ¥4.0B (+7.5%), with Q3 progress tracking at an appropriate level.
[Profitability] ROE of 16.0% (annualized for the quarter) remains well above industry levels. The 6.8% Operating Margin is roughly flat YoY and trending stably. Net Margin is 4.4%, showing improvement from the prior year. ROA (annualized) is approximately 9.1%, with asset efficiency contributing to profitability. [Cash Quality] Cash and deposits of ¥11.1B account for 39.2% of Total Assets, with cash coverage of current liabilities (¥11.5B) at 0.97x, indicating ample short-term payment capacity. [Investment Efficiency] Total Asset Turnover is a high 2.046x, a primary driver of ROE. Inventories rose to ¥3.1B (YoY +41.6%), outpacing sales growth and warranting monitoring of inventory turnover days. Intangible assets increased to ¥1.7B (YoY +26.9%), reflecting capitalized system investments. [Financial Soundness] The Equity Ratio is 56.7% (slight decline from 60.0% in the prior-year Q3), maintaining soundness. Current Ratio is 214.2% and Quick Ratio is 187.2%, indicating ample short-term liquidity. Debt-to-Equity Ratio is 0.76x and Financial Leverage is 1.76x, a conservative capital structure. Retained Earnings are ¥10.6B (YoY +23.6%), showing steady internal reserves accumulation.
Cash and deposits increased by +¥1.4B YoY to ¥11.1B, with the earnings uptrend supporting liquidity. Inventories expanded sharply by +¥0.9B YoY to ¥3.1B, with stock build accompanying sales growth putting pressure on working capital. Accounts payable increased by +¥2.5B to ¥8.7B, with utilization of the payment cycle amid higher procurement helping offset funding needs. Total current assets rose by +¥3.6B YoY to ¥24.6B, primarily due to cash buildup and increases in receivables and inventories. Against current liabilities of ¥11.5B, cash coverage is 0.97x and current asset coverage is 2.14x, indicating sufficient liquidity. There was +¥0.4B of investment in intangible fixed assets, with ongoing capitalization of software and related projects. Retained Earnings increased by +¥1.0B on accumulation of net profit, and together with dividend payments, capital reinforcement is progressing.
With Ordinary Income of ¥3.9B and Operating Income of ¥3.9B, non-operating income/expenses are effectively neutral, indicating core operations as the profit source. Operating Income reflects Gross Profit of ¥19.9B less SG&A of ¥15.98B, with a robust 34.4% Gross Margin underpinning profitability. The effective tax rate is 34.6%, with taxes of ¥1.4B recorded against Profit before tax of ¥3.9B. As there are no significant impacts from non-operating income or extraordinary gains/losses, a recurring, core operations-based earnings structure is established. While the cash flow statement is not disclosed in the financial data, making comparison of Operating Cash Flow and net profit unclear, the accumulation of cash and deposits and the increase in Retained Earnings suggest profits are reasonably backed by cash. Although higher accounts payable supports working capital efficiency, the sharp increase in inventories could affect future cash generation and accrual quality; monitoring normalization of inventory turnover and valuation loss risk is important.
Risk of rapid inventory buildup: Inventories are up YoY by +41.6%, far outpacing the 12.5% sales growth rate, which could pressure profit and cash flow if demand forecasts prove inaccurate or inventory valuation losses occur. Current inventories of ¥3.1B represent about 5.4% of Revenue, but continued deterioration in turnover would impair working capital efficiency. Recovery risk on intangible investments: Intangible fixed assets expanded to ¥1.7B (+26.9%), and if the benefits of software and development investments do not materialize as expected, amortization could pressure margins and lower asset turnover. Business concentration and growth sustainability: As standalone financials, dependency on specific businesses/customers may be high, posing a risk of revenue fluctuation due to key client trends or market changes. The full-year outlook assumes a slight decline in Operating Margin, requiring attention to rising SG&A and downside risk to margins.
[Positioning within the Industry] (Reference Information; In-house Research) Profitability: The 6.8% Operating Margin is +4.0pt above the industry median of 2.8% (2025-Q3), a high level within the industry. The 4.4% Net Margin is also well above the industry median of 1.8%, confirming a profitability edge. ROE of 16.0% is roughly 4x the industry median of 4.0%, reflecting highly efficient management driven by high Total Asset Turnover and leverage utilization. Soundness: The 56.7% Equity Ratio exceeds the industry median of 47.3% (IQR 41.8%–53.2%), indicating a stable financial base. The 214.2% Current Ratio is roughly in line with the industry median of 184%, suggesting no issue with short-term payment capacity. Net Debt/EBITDA is inferred to be in a de facto net cash position given substantial cash holdings, likely within a safe zone below the industry median of -2.14. Efficiency: Total Asset Turnover of 2.046x is estimated to be among the higher-efficiency cohort, with effective asset utilization underpinning earnings power. Sales growth of 12.5% far exceeds the industry median of 1.1% (IQR -5.7%–8.6%), ranking among the higher growth rates within the industry. Note: Industry: Wholesale Trade (N=14 companies); Comparison period: 2025-Q3 results; Source: In-house aggregation
First, achievement of 16.0% ROE underpinned by high Total Asset Turnover (2.046x) stands out, demonstrating superior earnings efficiency within the industry, with effective asset utilization driving returns on shareholders’ equity. Second, sales growth of 12.5% significantly exceeds the industry median of 1.1%, and the company is delivering profit growth while maintaining a 6.8% Operating Margin, which is commendable. Third, inventories surged by +41.6% YoY, which, whether due to stock buildup accompanying sales expansion or a shift in demand outlook, necessitates monitoring of inventory turnover trends and valuation loss risk. Fourth, liquidity headroom is ample, with cash and deposits of ¥11.1B and a 214.2% Current Ratio, implying low short-term funding risk. Under a conservative shareholder return policy with a Payout Ratio in the 20% range, capital reinforcement via accumulation of Retained Earnings is progressing, laying the foundation for sustainable growth.
This report is an automatically generated earnings analysis prepared by AI based on XBRL financial results brief data. It does not constitute a recommendation to invest in any specific security. The industry benchmarks are reference information compiled by our firm from publicly available financial results data. Investment decisions are your own responsibility; please consult a professional as needed before investing.