| Indicator | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥3526.5B | ¥3530.4B | -0.1% |
| Operating Income / Operating Profit | ¥480.8B | ¥492.0B | -2.3% |
| Ordinary Income | ¥512.8B | ¥521.5B | -1.7% |
| Net Income / Net Profit | ¥351.7B | ¥458.1B | -23.2% |
| ROE | 11.7% | 16.4% | - |
For the fiscal year ended March 2026, Revenue was ¥3526.5B (YoY -¥3.9B -0.1%) and remained essentially flat, while Operating Income was ¥480.8B (YoY -¥11.2B -2.3%), Ordinary Income was ¥512.8B (YoY -¥8.7B -1.7%) — both showing modest declines — and Net Income was ¥351.7B (YoY -¥106.4B -23.2%) with a material decrease. Selling, general and administrative expenses increased to ¥594.2B (+¥1.4B) amid flat revenue, compressing operating-stage margins by about 30bp. At the ordinary level, foreign exchange gains of ¥18.3B and interest income of ¥15.2B provided support, but the effective tax rate rose from 15.7% to 31.5%, driving the large decline in Net Income. The operating margin remained in the mid-double-digits at 13.6%, and gross margin was stable at 30.5%. By segment, the core Synthetic Resin Molding Products accounted for 89.5% of sales with Operating Income of ¥476.6B (margin 15.1%), and Beds & Furniture delivered Operating Income of ¥59.7B (margin 16.2%), both maintaining margins above 15%.
Revenue: Revenue was ¥3,526.5B (YoY -0.1%), finishing in a flat range. By segment, Synthetic Resin Molding Products were ¥3,156.9B (-0.1%) and Beds & Furniture were ¥369.6B (-0.4%), both slightly down with no major demand swings. The core Synthetic Resin Molding Products segment — covering industrial plastics, fasteners, and precision molded parts — accounted for 89.5% of company sales; automotive and industrial demand remained flat with no significant gains in volume or price mix. Beds & Furniture, composed of various beds and reclining chairs, represented 10.5% of sales and also trended flat.
Profitability: Gross profit was ¥1,074.9B (gross margin 30.5%), a slight increase YoY, with cost of sales ratio stable at 69.5%. SG&A amounted to ¥594.2B (SG&A ratio 16.8%), up ¥1.4B YoY, and cost increases amid flat sales pressured operating results. Operating Income was ¥480.8B (operating margin 13.6%), down 2.3% YoY and margin contracted by about 30bp. Non-operating income included interest income ¥15.2B and foreign exchange gains ¥18.3B, totaling non-operating income ¥40.4B; after deducting non-operating expenses ¥8.4B, the net ¥32.0B supported the ordinary level, resulting in Ordinary Income of ¥512.8B (ordinary margin 14.5%), a modest -1.7% decline. Extraordinary items were nearly neutral: Extraordinary gains ¥12.0B (gains on sale of available-for-sale securities ¥17.3B, gains on sale of fixed assets ¥12.0B, etc.) and Extraordinary losses ¥11.2B (impairment losses ¥8.6B, litigation settlement ¥6.2B, etc.), yielding Profit Before Tax ¥513.6B. Income taxes amounted to ¥161.8B, producing an effective tax rate of 31.5% (up from 15.7%), and this tax increase was the primary driver of the large Net Income decline to ¥351.7B (net margin 10.0%, YoY -23.2%). Overall, the picture was flat revenue with compression at the operating stage, FX-supported ordinary results, and a significant tax burden driving Net Income down.
The Synthetic Resin Molding Products business reported Revenue ¥3,156.9B (YoY -0.1%) and Operating Income ¥476.6B (YoY -2.8%), maintaining a high margin of 15.1%. As the core segment accounting for 89.5% of company sales and the majority of operating profit, it serves automotive and industrial equipment markets with industrial plastics, fasteners, and precision molded parts. Despite slight revenue and profit declines, a margin above 15% is a competitive level within the industry. The Beds & Furniture business posted Revenue ¥369.6B (YoY -0.4%) and Operating Income ¥59.7B (YoY +0.1%) with an improved margin of 16.2%, slightly higher than the Synthetic Resin segment and maintaining high margins. Although its sales share is 10.5%, it provides stable earnings contribution. Consolidated Operating Income after deducting corporate expenses of ¥55.6B totaled ¥480.8B.
Profitability: Operating margin was 13.6% (prior year 13.9%), a contraction of about 30bp, yet 5.9pt above the industry median of 7.8%. Net margin was 10.0% (prior year 13.0%), remaining 4.8pt above the median of 5.2%. ROE was 11.7%, down from 17.3% last year, primarily due to compression of net margin from a higher effective tax rate. Gross margin of 30.5% was stable; SG&A ratio 16.8% rose 40bp YoY, slightly weakening operating leverage. Cash Quality: Operating Cash Flow (OCF) was ¥471.6B, 1.3x Net Income ¥351.7B, with OCF/Net Income ratio 138%, indicating strong cash generation. The accrual ratio of -3.3% reflects cash-driven earnings quality. However, OCF/EBITDA of 0.78x declined YoY as working capital headwinds from inventory increase -¥30.4B and accounts payable decrease -¥49.9B pressured cash efficiency. Investment Efficiency: Total asset turnover was 0.90x, down from 0.93x, and ROA 13.3% was slightly below prior-year 13.7%. Capital expenditure was ¥185.6B (estimated), exceeding depreciation ¥125.7B, with CapEx/Depreciation ratio 1.48x, indicating continued investment in production capacity. R&D expenditure was ¥21.3B, 0.6% of sales, a modest level. Financial Soundness: Equity Ratio was 76.1% (prior year 72.4%), robust; current ratio 465.8% and quick ratio 416.7% indicate very strong short-term liquidity. Interest-bearing debt was ¥3.6B (short-term borrowings ¥2.0B, long-term borrowings ¥1.6B), effectively net-debt-free, with net cash ¥1,482.6B, Debt/EBITDA 0.01x, and Interest Coverage 219.7x — all indicating exceptionally high financial safety.
OCF was ¥471.6B (YoY -13.0%). Starting from Profit Before Tax ¥513.6B plus depreciation ¥125.7B, the operating cash subtotal was ¥560.8B. From there, income taxes paid -¥101.4B and working capital changes -¥30.4B (inventory increase), -¥49.9B (accounts payable decrease), +¥11.5B (accounts receivable decrease) were deducted. Working capital headwinds pressured cash generation, though the accounts receivable reduction indicates strong collection efficiency. Investing Cash Flow was -¥181.3B, chiefly for acquisition of tangible fixed assets -¥190.2B, partially offset by proceeds from sale of subsidiary shares +¥111.3B and other investment recoveries. Free Cash Flow was ¥290.3B (YoY +¥3.0B), generated solidly. Financing Cash Flow was -¥313.6B, primarily due to dividend payments -¥72.1B, share repurchases -¥100.0B, bond redemptions -¥100.0B, and lease repayments -¥18.5B. Including time deposit movements (deposits -¥143.8B, withdrawals +¥128.6B), the change in cash and equivalents was +¥5.6B, and foreign exchange translation +¥28.9B led to year-end cash ¥1,416.6B. Cash and deposits ¥1,486.2B represented 37.8% of total assets, maintaining ample liquidity.
The ¥206.1B gap between Ordinary Income ¥512.8B and Net Income ¥351.7B is mainly explained by taxes ¥161.8B and non-controlling interests ¥10.9B; extraordinary items were nearly neutral (extraordinary gains ¥12.0B - extraordinary losses ¥11.2B = +¥0.8B), so one-off effects were limited. Non-operating income totaled ¥40.4B (foreign exchange gains ¥18.3B, interest income ¥15.2B, other ¥6.8B); FX gains are market-dependent and less certain to persist, while interest income is a recurring benefit from a large cash base. Non-operating expenses were small (interest expense ¥2.8B, other ¥4.7B). The accrual ratio -3.3% (Net Income ¥351.7B - OCF ¥471.6B = -¥119.9B / Total Assets ¥3,935.9B) indicates no profit overstatement relative to cash and supports high earnings quality. Comprehensive income ¥400.5B exceeded Net Income by ¥48.8B, comprised mainly of foreign currency translation adjustments ¥40.6B, retirement benefit adjustments ¥7.5B, valuation differences on securities ¥0.6B, and deferred hedges ¥0.1B, with FX translation the main contributor and a potentially temporary revaluation effect.
Full-year guidance: Revenue ¥3,670.0B (YoY +4.1%), Operating Income ¥508.0B (+5.7%), Ordinary Income ¥500.0B (-2.5%), Net Income ¥340.0B (-3.3%). Versus actuals, achievement rates were Revenue 96.1%, Operating Income 94.6%, Ordinary Income 102.6%, Net Income 103.4% — topline missed, but ordinary and below exceeded plan. Revenue shortfall suggests slightly weaker demand conditions, but non-operating income support (FX gains, interest income, etc.) helped secure ordinary and net profitability near plan. Forecast EPS was ¥365.10 versus actual EPS ¥361.44, close to plan, and dividend guidance ¥56.0 aligns with the initial annual dividend assumption of ¥110 (interim ¥40 + year-end ¥70 = ¥110). The next fiscal year assumes a revenue recovery scenario, potential improvements in cash conversion via inventory reduction and accounts payable recovery, and room to restore operating margins through price pass-through and product mix optimization.
Annual dividend is ¥110 (interim ¥40, year-end ¥70), representing a Payout Ratio of 30.4% on EPS ¥361.44, within a sustainable range. Total dividends amounted to ¥72.1B. Share repurchases of ¥100.0B were executed, increasing treasury shares to 7,107 thousand shares against an average shares outstanding during the period of 94,289 thousand shares. Combined dividends and buybacks totaled ¥172.1B, a Total Return Ratio of 48.9% relative to Net Income ¥351.7B. Free Cash Flow ¥290.3B substantially covered total returns of ¥172.1B, with FCF coverage 1.69x, indicating ample capacity. With net cash ¥1,482.6B and strong liquidity, continuing shareholder returns via dividends and buybacks is sustainable. There is scope for further dividend increases tied to profit growth, and continued buybacks could be effective for improving capital efficiency.
Working Capital Risk: Inventory rose to ¥28.01B (+7.7% YoY) while accounts payable decreased to ¥21.93B (-16.5% YoY). This increased working capital pressures OCF and contributed to OCF/EBITDA declining to 0.78x. Continued deterioration in inventory turnover days or shortened accounts payable payment terms would worsen the cash conversion cycle and reduce free cash generation.
Tax Burden Risk: The effective tax rate rose from 15.7% to 31.5%, reducing Net Income by ¥10.64B (¥106.4B?). The burden of income taxes ¥161.8B on Profit Before Tax ¥513.6B may reflect reversal of deferred tax assets or changes in overseas subsidiaries’ tax rates. If the tax rate remains elevated, final profit margins will be constrained, slowing ROE and EPS growth.
Segment Concentration Risk: The Synthetic Resin Molding Products segment accounts for 89.5% of sales, so fluctuations in automotive and industrial equipment demand directly affect consolidated results. If major customer production adjustments, raw material price swings, or competitive pressure reduce the segment margin of 15.1%, consolidated profitability would deteriorate significantly. Low R&D spending at 0.6% of sales limits medium- to long-term product differentiation and advanced product development, which is a concern.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 13.6% | 7.8% (4.6%–12.3%) | +5.9pt |
| Net Margin | 10.0% | 5.2% (2.3%–8.2%) | +4.8pt |
Both operating and net margins materially exceed the industry median, maintaining top-tier profitability within the manufacturing sector.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | -0.1% | 3.7% (-0.4%–9.3%) | -3.8pt |
Revenue growth lags the industry median and remains in a flat demand environment. Accelerating growth is a future challenge.
※ Source: Company compilation
High, stable profitability and the transitory nature of the increased tax burden: Operating margin 13.6% is 5.9pt above the industry median 7.8%, and the core Synthetic Resin Molding Products segment maintains a 15.1% high margin. Net margin at 10.0% is well above the 5.2% median, but the rise in the effective tax rate to 31.5% caused a YoY net profit decline of -23.2%. If the tax increase is temporary, there is room for profit recovery next fiscal year. Operating-stage profitability is stable and core business competitiveness is solid.
Cash generation and scope to improve working capital management: OCF ¥471.6B is 1.3x Net Income, demonstrating good cash generation, but OCF/EBITDA of 0.78x declined YoY as inventory increase -¥30.4B and accounts payable decrease -¥49.9B were headwinds. Improving inventory turnover and restoring accounts payable levels would improve the cash conversion cycle and expand free cash generation capacity. A net cash position of ¥1,482.6B and virtually no interest-bearing debt provide a strong foundation for flexible investment and returns.
Sustainability of shareholder returns and improvement in capital efficiency: Payout Ratio 30.4% and Total Return Ratio 48.9% are within sustainable ranges, and Free Cash Flow ¥290.3B comfortably covers total returns ¥172.1B. Continued share repurchases of ¥100.0B reflect a focus on capital efficiency; ROE at 11.7% decreased YoY but remains strong within the sector. Going forward, profit growth and normalization of the tax rate would allow for dividend increases, and boosting R&D (currently 0.6%) to strengthen product competitiveness would support sustained capital efficiency improvements.
This report was automatically generated by AI analyzing XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company based on public financial statements. Investment decisions should be made at your own responsibility; consult a professional advisor as necessary.