| Metric | Current Period | Prior Year | YoY |
|---|---|---|---|
| Revenue | ¥1454.6B | ¥1422.5B | +2.3% |
| Operating Income | ¥77.7B | ¥68.9B | +12.7% |
| Ordinary Income | ¥80.9B | ¥73.1B | +10.7% |
| Net Income | ¥39.7B | ¥29.3B | +35.6% |
| ROE | 3.5% | 2.8% | - |
For the fiscal year ended March 2026, JSP reported Revenue of ¥1454.6B (YoY +¥32.1B +2.3%), Operating Income of ¥77.7B (YoY +¥8.8B +12.7%), Ordinary Income of ¥80.9B (YoY +¥7.8B +10.7%), and Net Income attributable to owners of parent of ¥66.0B (YoY +¥15.3B +30.3%), marking higher sales and profit. Operating margin improved to 5.3% from 4.8% a year earlier (+0.5pt), and gross margin rose to 26.4% (prior 25.7%) (+0.7pt), with pricing policy and product-mix improvements supporting profitability. In non-operating items, interest income of ¥4.4B exceeded interest expense of ¥3.9B, producing a favorable financial result, and extraordinary gains of ¥6.8B (including ¥3.9B from retirement benefit plan revision and ¥1.2B from step acquisition gains) supported Net Income. Operating Cash Flow was ¥163.5B (YoY +83.8%), significantly higher, reflecting inventory compression and stable profit generation that strengthened cash-generating capability.
[Revenue] Revenue was ¥1454.6B (+2.3%), a moderate increase. By segment, the core Beads Business maintained growth with Revenue of ¥967.0B (+3.2%), accounting for a 66.5% sales mix and serving as the growth driver. The Extrusion Business recorded Revenue of ¥496.5B (+0.3%), a slight increase; however, cost control and pricing measures improved profitability. Gross margin improved to 26.4% (+0.7pt YoY), aided by stabilization of raw material and energy costs and maintained selling prices. Conversely, trade receivables rose by ¥21.6B to ¥328.1B, and days sales outstanding extended to 82 days (estimated +12 days YoY), making receivables management an area for improvement.
[Profitability] From Gross Profit of ¥384.1B (gross margin 26.4%), SG&A of ¥306.5B (SG&A ratio 21.1%, YoY +¥1.0B +0.3%) was deducted, resulting in Operating Income of ¥77.7B (operating margin 5.3%, +12.7% YoY). By segment, the Beads Business posted Operating Income of ¥66.3B (margin 6.9%, +4.1% YoY) and the Extrusion Business ¥20.6B (margin 4.1%, +25.1% YoY), with notable margin improvement in Extrusion. Non-operating income totaled ¥8.8B (including interest income ¥4.4B and foreign exchange gains ¥0.5B) against non-operating expenses of ¥5.5B (including interest expense ¥3.9B), producing Ordinary Income of ¥80.9B (+10.7%). Extraordinary gains of ¥6.8B (¥3.9B from retirement benefit plan revision, ¥0.5B from disposal of fixed assets, ¥0.2B from sale of investment securities, etc.) less extraordinary losses of ¥1.3B (¥0.8B impairment loss on fixed assets, ¥0.4B impairment losses, etc.) resulted in profit before income taxes of ¥86.4B. After income taxes of ¥20.1B and non-controlling interests of ¥0.3B, Net Income attributable to owners of parent was ¥66.0B (+30.3%), delivering a strong result of revenue and earnings growth.
The Beads Business recorded Revenue of ¥967.0B (+3.2%) and Operating Income of ¥66.3B (+4.1%, margin 6.9%), representing a 66.5% sales mix and 76.3% of segment profit—JSP’s core business. Solid demand and price measures, centered on expanded polypropylene and polyethylene foams, supported earnings. The Extrusion Business posted Revenue of ¥496.5B (+0.3%) and Operating Income of ¥20.6B (+25.1%, margin 4.1%); although revenue growth was limited, cost optimization and product-mix improvement materially raised margins year-over-year. After deducting corporate expenses of ¥9.4B (R&D and common costs), consolidated Operating Income was ¥77.7B. The Beads Business’s high profitability (margin 6.9%) and the Extrusion Business’s margin improvement (+1.6pt) underpinned the company-level operating margin of 5.3%.
[Profitability] Operating margin 5.3% (prior 4.8%, +0.5pt) and ROE 5.8% (prior 5.2%, +0.6pt) indicate improving profitability. ROE was led by Net Profit Margin 4.5% (prior 3.6%, +0.9pt), offsetting a decline in Total Asset Turnover to 0.88x (prior 0.92x). Financial leverage was stable at 1.45x (prior 1.46x), indicating a stable capital structure. [Cash Quality] Operating Cash Flow ¥163.5B is 2.48x Net Income ¥66.0B, and OCF/EBITDA ratio is 1.03x, showing high cash conversion. Accrual ratio was -5.9%, indicating strong cash backing of profits. [Investment Efficiency] Total Asset Turnover 0.88x (prior 0.92x) declined due to accumulation of inventory and fixed assets. Days Sales Outstanding 82 days (prior estimated ~70 days) lengthened, making receivables management a priority. [Financial Soundness] Equity Ratio 68.9% (prior 68.8%), Current Ratio 222% (prior 232%), Quick Ratio 197%—the financial base is solid. Interest-bearing debt (short-term borrowings ¥80.4B + long-term borrowings ¥86.5B) totaled ¥166.9B versus cash and short-term investments of ¥192.1B, yielding net cash of ¥25.2B. Debt/EBITDA ratio is 1.0x and interest coverage is 20.1x, indicating ample debt capacity.
Operating Cash Flow was ¥163.5B (YoY +83.8%), a large increase. Starting from profit before income taxes ¥86.4B plus depreciation ¥81.2B, operating cash subtotal was ¥177.3B. Changes in working capital produced net outflows: inventory decrease ¥19.2B (cash in), trade receivables increase ¥17.4B (cash out), accounts payable decrease ¥1.6B (cash out), for a net working capital outflow of -¥13.6B. After income tax payments of ¥15.8B, the result was the reported OCF. Inventory reduction boosted OCF while receivables increases partially offset it, but overall cash generation remained strong. Investing Cash Flow was -¥85.7B, primarily due to acquisition of tangible fixed assets ¥103.6B (CapEx/Depreciation 1.28x, CapEx/Revenue 7.1%), reflecting ongoing maintenance and growth investments. Proceeds from disposal of fixed assets amounted to ¥0.7B, while acquisition of investment securities ¥0.08B resulted in a net investing outflow. Free Cash Flow was ¥77.8B (Operating Cash Flow ¥163.5B - Investing Cash Flow ¥85.7B), ample to cover dividend payments of ¥21.0B by 3.7x. Financing Cash Flow was -¥37.5B: although there was long-term borrowings inflow of ¥49.2B, repayments of long-term borrowings totaled ¥59.1B, net increase in short-term borrowings ¥2.1B, lease liability repayments ¥5.8B, dividend payments ¥21.0B, and dividends to non-controlling interests ¥0.3B produced a net cash outflow. Cash increased by ¥46.4B, leaving ending cash of ¥166.7B.
Of Ordinary Income ¥80.9B, the majority was derived from Operating Income ¥77.7B, indicating strong core operating profitability. Of non-operating income ¥8.8B, interest income was ¥4.4B, foreign exchange gains ¥0.5B, and other ¥2.7B—accounting for 0.6% of Revenue and thus minor. Net extraordinary items were +¥5.5B (extraordinary gains ¥6.8B - extraordinary losses ¥1.3B); one-time factors such as ¥3.9B from retirement benefit plan revision, ¥1.2B step acquisition gain, and ¥1.0B insurance receipts boosted Net Income by about 8%, but within an acceptable range. Operating Cash Flow of ¥163.5B equates to 2.48x Net Income ¥66.0B, with OCF/EBITDA 1.03x and accrual ratio -5.9%, showing strong cash backing of profits. Comprehensive income was ¥98.3B, ¥32.3B above Net Income ¥66.0B, primarily due to ¥27.6B of foreign currency translation adjustments and ¥4.3B remeasurements of retirement benefits; these valuation gains are unrealized but have strengthened equity. The divergence between Ordinary Income and Net Income is explainable by tax effects (effective tax rate 23.2%) and extraordinary items, and overall earnings quality is good.
Full-year forecast for the next fiscal year (FY2027 ending March 2027) projects Revenue ¥1640B (YoY +12.7%), Operating Income ¥70B (YoY -9.9%), Ordinary Income ¥72B (YoY -11.0%), Net Income attributable to owners of parent ¥50B (YoY -24.2%), EPS ¥190.79, and dividend ¥50. Versus current-period results, progress rates are Revenue 88.7%, Operating Income 111.0%, Ordinary Income 112.4%, Net Income 132.0%, indicating current results significantly exceed forecasts. The company is presumed to conservatively factor in possible increases in raw material and energy costs, exchange-rate assumptions, and a demand plateau, anticipating that this period’s strong profitability improvements may slow next year. The projected Operating Income decrease of -9.9% reflects expected compression of gross margin and higher SG&A; continuing price pass-through, cost optimization, and inventory/receivables management will be key to achieving the plan.
Annual dividend is ¥90 (interim ¥40, year-end ¥50), implying a payout ratio of 32.0% against Net Income attributable to owners of parent ¥66.0B, and total returns of ¥21.0B. Free Cash Flow ¥77.8B covers dividends 3.7x, supporting dividend sustainability. Next year’s forecast dividend ¥50 (assumed interim/term split ¥25/¥25) equates to a payout ratio of 26.2% against forecast EPS ¥190.79, conservatively set to preserve dividend flexibility despite the earnings downgrade. No share buybacks were executed this period (prior year ¥0.01B), and the return policy remains dividend-centric. Cash and short-term investments ¥192.1B and net cash ¥25.2B indicate ample liquidity, leaving room for future dividend increases or buybacks.
Raw material and energy price volatility risk: Of Cost of Goods Sold ¥1070.4B, raw material and energy costs represent a major portion. Spikes in resin prices (polystyrene, polyethylene) or crude oil prices would compress gross margin. While gross margin improved to 26.4% (+0.7pt) this period, next-year guidance assumes Operating Income -9.9%; inability to pass through cost increases would materially impair profitability. Diversification of procurement, hedging strategies, and flexible price revisions are mitigation measures.
Concentration of short-term liabilities and liquidity management risk: Of Current Liabilities ¥369.0B, short-term borrowings are ¥80.4B, long-term borrowings due within one year ¥57.6B, and trade payables ¥103.9B, giving a high short-term liability ratio of 50.5%. Although cash and short-term investments ¥192.1B yield a Current Ratio of 222% and provide buffer, rising market interest rates would increase refinancing costs, and credit tightening could heighten refinancing risk. Interest coverage of 20.1x suggests strong interest-bearing debt tolerance, but reducing reliance on short-term borrowings and shifting to long-term funding is advisable.
Trade receivables collection delay risk: Trade receivables ¥328.1B (YoY +¥21.6B, +7.0%) and Days Sales Outstanding 82 days (estimated prior ~70 days, +12 days) indicate lengthening collection periods. Receivables growth outpacing revenue growth (+2.3%) may reflect relaxed payment terms or expanded credit; allowance for doubtful accounts is ¥1.1B, only 0.3% of trade receivables. During economic downturns, credit costs and bad-debt risk could rise. Strengthening customer credit management, shortening collection periods, and using advance payments or bill discounting are recommended measures.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 5.3% | 7.8% (4.6%–12.3%) | -2.4pt |
| Net Profit Margin | 2.7% | 5.2% (2.3%–8.2%) | -2.5pt |
Company operating margin 5.3% is 2.4pt below the industry median 7.8%, and net profit margin 2.7% is 2.5pt below median 5.2%. Within manufacturing, profitability ranks mid-to-low, suggesting sensitivity to raw material costs and room to improve pricing power.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 2.3% | 3.7% (-0.4%–9.3%) | -1.4pt |
Company revenue growth 2.3% trails the industry median 3.7% by 1.4pt; growth momentum is below the industry average. Given the business’s exposure to external markets, expanding share in niche areas and launching new products are keys to accelerating growth.
※ Source: Company aggregation
Underlying earnings uplift shown by gross margin improvement and OCF increase: Gross margin 26.4% (+0.7pt) and operating margin 5.3% (+0.5pt) indicate improved profitability, while Operating Cash Flow ¥163.5B (+83.8%) demonstrates stronger cash generation. Inventory compression ¥19.2B contributed to OCF growth and improved working capital efficiency. Although next-year guidance expects Operating Income -9.9%, this period’s gross margin improvement evidences the effectiveness of pricing and cost optimization; if external conditions stabilize, sustainability of profitability is high. With CapEx/Depreciation 1.28x and CapEx/Revenue 7.1%, the company continues growth and maintenance investment, supporting medium-to-long-term competitiveness.
Strengthened balance sheet and ample dividend capacity: Equity Ratio 68.9%, Current Ratio 222%, and Net Cash ¥25.2B indicate a healthy balance sheet. Debt/EBITDA 1.0x and Interest Coverage 20.1x show ample debt resilience. Free Cash Flow ¥77.8B covers dividends ¥21.0B by 3.7x, and a payout ratio of 32.0% (next-year forecast 26.2%) leaves significant room for returns. Attention is warranted on the high short-term liability ratio 50.5% and lengthening DSO of 82 days, but liquidity risk is limited by cash and short-term investments ¥192.1B. Accumulation of foreign currency translation adjustments ¥27.6B lifted comprehensive income to ¥98.3B and bolstered equity, reflecting benefits from yen weakness.
Segment strategy and conservative next-year guidance: The Beads Business (sales mix 66.5%, profit mix 76.3%, margin 6.9%) is the core, and the Extrusion Business (margin 4.1%, +25.1% profit growth) has seen margin recovery. Next-year guidance is conservative—Revenue +12.7% but Operating Income -9.9%—reflecting assumptions of rising raw material and energy costs and demand plateau. Given this period’s outperformance versus guidance, diligent price pass-through, product-mix improvements, and strict inventory/receivables management increase the likelihood of achieving targets. Versus industry benchmark, operating margin lags the median by 2.4pt, indicating room for further gross margin improvement and SG&A efficiency as medium-term priorities.
This report is an earnings analysis document automatically generated by AI based on XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information aggregated by our firm from public financial statements. Investment decisions should be made at your own responsibility and, if necessary, after consulting a professional advisor.