These are mechanically computed values based on a residual income model. They are not a forecast of market prices or a recommendation of any investment action, and do not predict or guarantee future share prices. Historical values are computed retrospectively using current guidance-achievement statistics.
| Metric | Current Period | Same Period Last Year | YoY |
|---|---|---|---|
| Revenue | - | - | - |
| Operating Income | ¥31.5B | ¥24.3B | +29.7% |
| Equity-Method Investment Gain/Loss | - | - | - |
| Ordinary Income | ¥35.2B | ¥26.0B | +35.4% |
| Net Income | ¥20.0B | ¥14.3B | +40.1% |
| ROE | 1.4% | 1.0% | - |
For Q1 of the fiscal year ending March 2027, the Company reported higher revenue and earnings, driven by the return to profitability in overseas wholesale and the effects of price revisions for paper and pulp products, with margins also improving. Revenue was ¥1,562.8B (¥1,447.4B in the prior year, +8.0%), Operating Income was ¥31.5B (¥24.3B in the prior year, +29.7%), Ordinary Income was ¥35.2B (¥26.0B in the prior year, +35.4%), and Net Income attributable to owners of the parent was ¥18.1B (¥11.7B in the prior year, +55.6%). The gross margin improved to 17.6% (17.1% in the prior year), and while the revenue increase and improved profitability lifted earnings, the high effective tax rate (42.7%) partially offset the increase in net income.
【Revenue】Revenue was ¥1,562.8B, up +8.0% year on year. By segment, overseas wholesale was the largest and fastest-growing segment at ¥871.9B (55.8% of total revenue, +12.1%), while paper processing also increased revenue to ¥135.8B (+7.5%). In contrast, environmental raw materials at ¥47.3B (-7.1%) and leasing at ¥10.1B (-2.8%) recorded revenue declines. Growth in overseas wholesale led the overall increase in revenue.
【Profit and Loss】Operating Income was ¥31.5B (+29.7%) and Ordinary Income was ¥35.2B (+35.4%). On a segment profit basis (using Ordinary Income), overseas wholesale returned to profitability, improving from a loss of △¥2.7B in the prior year to a profit of +¥1.9B, while paper processing increased profit by +23%, from ¥15.7B to ¥19.3B. These two segments were the primary drivers of the increase in consolidated earnings. Meanwhile, real estate leasing profit declined from ¥3.9B to ¥3.2B. Special gains and losses were small, consisting of a gain of ¥0.7B and a loss of ¥0.9B (¥0.9B in business structural reform expenses), and the gap between Ordinary Income and Net Income was primarily attributable to income taxes and other taxes (effective tax rate of 42.7%). The Company reported higher revenue and earnings.
Domestic wholesale recorded segment profit of ¥15.6B (¥12.1B in the prior year), representing an improvement. Overseas wholesale returned to profitability at ¥1.9B (△¥2.7B in the prior year) and made the largest contribution to the increase in consolidated earnings. Paper processing remained a highly profitable and stable earnings driver, with profit of ¥19.3B (¥15.7B in the prior year, +23%). Environmental raw materials generated ¥2.8B (¥3.0B in the prior year, -4.4%), while real estate leasing generated ¥3.2B (¥4.0B in the prior year, -18.7%), both representing modest declines in profit. In overseas wholesale, goodwill of ¥34.0B was recognized in connection with the acquisition of shares in PPB Ltd by consolidated subsidiary Premier Paper Group Limited, contributing to the increase in the goodwill balance to ¥94.1B in the current period.
【Profitability】The Operating Income margin improved to 2.0% (1.7% in the prior year), while the Ordinary Income margin improved to 2.3% (1.8% in the prior year). The improvement in the gross margin to 17.6% (17.1% in the prior year) exceeded the increase in the SG&A expense ratio to 15.6% (15.4% in the prior year), resulting in operating leverage.【Cash Flow Quality】The Company recorded dividends received of ¥5.2B and interest received of ¥2.1B as non-operating income, while interest paid of ¥7.4B was the primary component of non-operating expenses; therefore, the net contribution from non-operating gains and losses was limited.【Investment Efficiency】ROE was 1.4% based on actual results for the quarter (approximately 5% on a simple annualized basis), while the Equity Ratio was 34.7%, slightly down from the equivalent 35.7% in the same period of the prior year.【Financial Soundness】Against total assets of ¥4,123.7B, net assets were ¥1,431.9B, tangible fixed assets were ¥990.4B, and goodwill was ¥94.1B, indicating that the quality of assets was generally stable. However, short-term borrowings increased from ¥449.9B to ¥586.0B, indicating a higher degree of dependence on short-term funding.
As no explicit disclosure of the statement of cash flows is available, an analysis of funding trends based on changes in the balance sheet indicates that cash and deposits increased to ¥275.2B (¥258.3B in the prior year), while short-term borrowings increased +30.3% from ¥449.9B to ¥586.0B. This suggests that working capital requirements and M&A-related funding are being covered through short-term financing. Inventories of ¥650.8B and accounts receivable of ¥1,446.7B are large relative to the asset base, reflecting the characteristics of a business in which funds are prone to being tied up in working capital. The funding available for capital expenditures and shareholder returns is therefore likely to depend on whether inventory and credit management efficiency improves.
Special gains and losses were small relative to Ordinary Income of ¥35.2B, consisting of a gain of ¥0.7B and a loss of ¥0.9B (¥0.9B in business structural reform expenses). Accordingly, the increase in earnings is considered to be of good quality because it was primarily driven by improvements in the core businesses, such as the return to profitability in overseas wholesale and increased profit in paper processing, rather than by temporary factors. Non-operating income totaled ¥12.0B, primarily consisting of dividends received of ¥5.2B, but was largely offset by non-operating expenses of ¥8.3B, including interest paid of ¥7.4B. The earnings contribution from non-operating items was therefore limited. Comprehensive income was ¥75.7B (¥72.5B attributable to owners of the parent), substantially exceeding Net Income of ¥18.1B, due to additional valuation gains related to marketable securities and overseas subsidiaries, including ¥29.2B in valuation difference on securities and ¥9.7B in foreign currency translation adjustments.
The progress rates for Q1 against the full-year Company plan (Operating Income of ¥155.0B, Ordinary Income of ¥150.0B, EPS of ¥73.85, and dividends of ¥36.00) were 20.3% for Operating Income, 23.5% for Ordinary Income, and 22.2% on an EPS basis (¥16.42/¥73.85), all below the simple one-quarter benchmark of 25%. There were no revisions to the earnings or dividend forecasts, and the Company maintained its initial plan. If improved profitability in overseas wholesale and the integration effects of the M&A transaction involving PPB Ltd contribute during the second half of the fiscal year, the progress gap could narrow.
The Company’s full-year dividend plan is ¥36.00 (the prior-year actual dividend of ¥14 was a figure as of the interim period, making a simple comparison difficult), resulting in a Payout Ratio of approximately 48.7% against forecast EPS of ¥73.85 (¥36.00÷¥73.85). Treasury shares increased from ¥50.6B to ¥79.5B and are viewed as part of shareholder returns in addition to dividends. However, the Payout Ratio in this report is based solely on dividends and is presented separately from the Total Return Ratio, which includes share repurchases.
Short-term funding dependence and refinancing risk: Short-term borrowings increased +30.3% from ¥449.9B to ¥586.0B, indicating a high dependence on short-term liabilities relative to cash and deposits of ¥275.2B. Changes in the interest-rate environment could affect refinancing costs.
Working capital tied-up risk: Inventories of ¥650.8B and accounts receivable of ¥1,446.7B represent significant proportions of total assets, creating a structural challenge whereby the efficiency of inventory management and receivables collection affects capital efficiency.
Goodwill and M&A integration risk: Goodwill increased +51.6% year on year (from ¥62.1B to ¥94.1B) in connection with Premier Paper Group’s acquisition of PPB Ltd. The purchase price allocation remains provisional, and its subsequent finalization and progress of integration could affect the Company’s financial condition.
No industry benchmark data available
※Source: Compiled by the Company
The return to profitability in the overseas wholesale segment (from △¥2.7B in the prior year to ¥1.9B in the current period) was a major factor behind the increase in consolidated earnings, and the sustainability of this improvement will influence future performance trends.
Progress against the full-year plan was 20.3% for Operating Income and 23.5% for Ordinary Income, below the simple 25% benchmark, suggesting that the plan is weighted toward the second half of the fiscal year.
The increase in short-term borrowings (+30.3%) and goodwill (+51.6%) indicates changes in the funding and asset structure associated with the M&A transaction involving the acquisition of PPB Ltd. The progress of integration and changes in the funding structure will be key areas of focus in assessing the Company’s financial condition.
This is a mechanically calculated reference range based solely on publicly available data using a residual income model (Ohlson-type model with an explicit five-year fade period). It is not a forecast of the market share price or a recommendation of any specific investment action.
| Scenario | Theoretical Share Price |
|---|---|
| bear | ¥1,157 |
| base | ¥1,164 |
| bull | ¥1,177 |
| Calculation Assumption | Value |
|---|---|
| Book Value Per Share (BPS) | ¥1,302 |
| Adjusted Forecast EPS | ¥76.6 |
| Cost of Equity r | 9.77% (10-year government bond 2.77% + equity risk premium 6.00% + size premium 1.00%) |
| Residual Income Persistence Parameter ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 48.8% |
| Forecast EPS Confidence Adjustment | ×1.037 (based on the track record of guidance attainment in the same industry) |
| Implied PBR / PER |
Sensitivity: ¥1,133–¥1,197 at ±1% for the cost of equity, and ¥1,160–¥1,167 at ±0.1 for ω.
Notes:
(Calculation model: Residual income model / Interest-rate reference month: 2026-07 / This value does not forecast or guarantee the future share price)
This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not recommend investment in any specific security. Industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own discretion and responsibility, after consulting a professional as necessary.
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| 0.89x / 15.2x |