V Technology Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥19.74B
• Operating Income: ¥-370M
• Net Income: ¥-312M
• EPS: ¥-25.33

Income Statement

Balance Sheet

Cash Flow Statement

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

V-Technology (7717) posted FY2026 Q2 consolidated results under JGAAP showing revenue of ¥19.744bn, down 11.6% YoY, reflecting a softer demand environment and/or delivery timing typical of capital equipment cycles. Gross profit was ¥5.148bn, implying a gross margin of 26.1%, which is adequate for equipment businesses but still leaves limited operating buffer at current scale. Operating income was a loss of ¥0.37bn, an improvement versus the prior-year period (+147% YoY), indicating progress in cost containment and/or better project mix despite lower sales. Ordinary loss came in at ¥0.406bn, with interest expense of ¥49m modest relative to the balance sheet size. Net loss narrowed to ¥0.239bn (+237.3% YoY improvement), translating to a net margin of -1.21% and EPS of -¥25.33. DuPont shows net margin -1.21%, asset turnover 0.275x, and financial leverage 2.15x, producing a calculated ROE of -0.72%, consistent with the reported figure. EBITDA turned slightly positive at ¥14m (0.1% margin), as D&A of ¥384m offset most of the operating loss. Cash generation was a bright spot: operating cash flow (OCF) was ¥3.033bn despite the net loss, implying strong working capital inflows. The balance sheet remains liquid, with current assets of ¥65.392bn and current liabilities of ¥24.263bn, yielding a current ratio of 269.5% and working capital of ¥41.129bn. Total assets were ¥71.668bn against total liabilities of ¥39.619bn and equity of ¥33.258bn, implying leverage of roughly 1.19x on a liabilities-to-equity basis and assets-to-equity of ~2.15x. Interest coverage based on EBIT was -7.6x due to the operating loss, but absolute interest burden remains small. The company reported no dividends (DPS ¥0) for the period, which aligns with the priority of stabilizing earnings and cash. Several data points are undisclosed in XBRL (e.g., equity ratio, cash balance, investing cash flows, outstanding shares), so conclusions are based on the available non-zero items only. Overall, profitability is still negative but improving, liquidity is strong, operating cash flow is solid, and solvency appears manageable. Near-term performance hinges on order intake, backlog conversion, and sustaining gross margin while lifting capacity utilization.

Profitability Analysis

ROE_decomposition: ROE = Net Margin (-1.21%) × Asset Turnover (0.275x) × Financial Leverage (2.15x) = -0.72%. The negative net margin is the principal drag; turnover is subdued for a capital equipment name, and leverage provides only modest amplification. margin_quality: Gross margin at 26.1% suggests reasonable value-add but insufficient to cover fixed costs at current revenue run-rate. Operating margin was -1.9% (¥-370m/¥19,744m). Net margin at -1.21% benefited from a relatively light non-operating burden (interest expense ¥49m). EBITDA margin was 0.1%, indicating break-even on a cash operating basis before D&A. operating_leverage: With EBITDA barely positive and D&A at ¥384m, the business shows high operating leverage: small changes in revenue or gross margin can swing EBIT materially. The YoY improvement in operating loss (+147%) despite an 11.6% sales decline indicates effective cost control and/or a better mix, but sustained top-line recovery is needed to restore positive operating margins.

Growth Assessment

revenue_sustainability: Revenue declined 11.6% YoY to ¥19.744bn, consistent with cyclical softness and delivery timing in equipment shipments. Asset turnover at 0.275x points to underutilization of the asset base, implying headroom for recovery if orders rebound. profit_quality: Net loss narrowed meaningfully, with EBITDA turning slightly positive. The improvement amid lower sales hints at cost actions and margin discipline; however, the low EBITDA margin (0.1%) underscores fragile profitability. outlook: Near-term growth hinges on order book, backlog execution, and customer capex trends in end-markets (e.g., display/semiconductor equipment). Sustaining >26% gross margin while improving scale utilization would enable a return to operating profitability. FX and component costs could influence margin trajectory. Given data limitations (no backlog or bookings disclosed here), visibility is moderate.

Financial Health

liquidity: Current assets ¥65.392bn vs current liabilities ¥24.263bn yield a current ratio of 269.5% and quick ratio of 266.7%, indicating strong short-term liquidity. Working capital is ¥41.129bn, providing a significant buffer for project execution. solvency: Total liabilities ¥39.619bn vs equity ¥33.258bn implies liabilities-to-equity of 1.19x and assets-to-equity (financial leverage) of ~2.15x. Interest expense of ¥49m is modest. Interest coverage is negative due to operating loss, but the absolute financing burden appears manageable. capital_structure: Equity comprises ~46% of assets by calculation (33.258/71.668), although the reported equity ratio field is undisclosed. The balance of financing appears to be liabilities (type not specified). Absent detail on interest-bearing debt composition, we infer moderate leverage with ample current assets.

Cash Flow Quality

earnings_quality: OCF of ¥3.033bn versus net loss of ¥239m indicates strong cash conversion driven by working capital movements (OCF/NI = -12.69 due to negative NI base). This suggests reported losses are partly timing-related rather than cash-draining. FCF_analysis: Investing cash flow is undisclosed in this dataset, so FCF cannot be reliably determined despite a reported FCF figure of ¥0 in the summary. Using the classical definition (OCF - capex), we lack capex detail; thus, FCF assessment is inconclusive based on available non-zero data. working_capital: Inventories of ¥679m are very low relative to current assets, implying the bulk of current assets are likely receivables, contract assets, or cash equivalents (cash not disclosed). The positive OCF likely reflects collections or advances. Monitoring receivables days, contract liabilities, and project milestones is key to sustain cash generation.

Dividend Sustainability

payout_ratio_assessment: No dividend declared (DPS ¥0; payout ratio 0.0%). With negative earnings and minimal EBITDA, a conservative stance is appropriate. FCF_coverage: FCF coverage cannot be assessed due to undisclosed investing cash flows and capex. While OCF is positive, sustainable distributions require consistent FCF after maintenance capex. policy_outlook: Dividend resumption likely depends on restoring stable operating profitability and demonstrable FCF. Management may prioritize balance sheet strength and R&D/customer delivery commitments before shareholder returns.

Risk Assessment

Business Risks:

• Cyclical demand and capex timing in display/semiconductor-related equipment markets
• Project concentration and delivery schedule risk affecting quarterly volatility
• Pricing pressure and mix shifts impacting gross margin
• Supply chain lead times and component availability affecting cost and delivery
• FX volatility influencing revenue and COGS if exposures are material

Financial Risks:

• Negative operating income leading to weak interest coverage despite low absolute interest
• Potential working capital reversals that could reduce OCF in subsequent periods
• Moderate leverage (liabilities/equity ~1.19x) with limited clarity on debt maturity profile
• Limited visibility on cash and capex due to undisclosed items

Key Concerns:

• Sustaining >25% gross margin while increasing utilization to lift EBIT above breakeven
• Dependence on working capital inflows to support cash generation
• Visibility on orders/backlog to support revenue recovery

Investment Implications

Key Takeaways:

• Revenue declined 11.6% YoY, but operating and net losses narrowed materially
• Gross margin at 26.1% is adequate but requires higher scale to cover fixed costs
• EBITDA turned slightly positive (¥14m), indicating near-breakeven cash operations
• Strong liquidity (current ratio 269.5%) and manageable leverage (1.19x liabilities/equity)
• OCF of ¥3.033bn underscores solid cash generation from working capital
• Data gaps (cash balance, investing CF, equity ratio, shares) limit some ratio analyses

Metrics to Watch:

• Order intake, backlog, and book-to-bill
• Gross margin trajectory and cost of sales mix
• EBITDA margin progression and fixed-cost absorption
• OCF sustainability and working capital movements (receivables, contract liabilities)
• Capex and investing outflows to assess true FCF
• Interest-bearing debt levels, maturity profile, and interest expense
• FX exposure and hedging impact

Relative Positioning: Compared with TSE machinery/equipment peers, V-Technology currently exhibits weaker profitability (negative operating income) but stronger liquidity and moderate leverage; the path to improved relative positioning hinges on backlog conversion and margin preservation amid a cyclical demand backdrop.

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