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 of Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥154.6B | ¥160.4B | -3.6% |
| Operating Income | ¥4.5B | ¥7.3B | -38.8% |
| Equity-Method Investment Gain/Loss | - | - | - |
| Ordinary Income | ¥9.5B | ¥8.2B | +15.8% |
| Net Income | ¥6.3B | ¥6.3B | +0.0% |
| ROE | 1.9% | 2.0% | - |
Although operating income declined, ordinary income and net income were maintained at approximately the previous year's levels due to an increase in non-operating income. The results represent a mixed performance of lower revenue and lower operating income, rather than higher revenue and lower operating income. Revenue was ¥154.6B (-3.6% YoY), while operating income fell significantly to ¥4.5B (-38.8%). In contrast, ordinary income remained solid at ¥9.5B (+15.8%), and net income was ¥6.3B (+0.0%). Deteriorating profitability in the Industrial Equipment Business was the primary cause of the decline in operating income, while increases in dividends received and equity-method investment gains lifted ordinary income.
【Revenue】Revenue declined 3.6% YoY to ¥154.6B. The Machinery Parts Business grew to ¥53.3B (+6.0%), but the Industrial Equipment Business at ¥36.0B (-15.2%) and the Industrial Materials Business at ¥67.5B (-4.8%) weighed on overall results.
【Profit and Loss】Operating income was ¥4.5B (-38.8%), primarily due to a decline in the gross profit margin to 18.2% (approximately 19.0% in the previous year) and a sharp decrease in profit from the Industrial Equipment Business to ¥0.5B (-82.3%). Meanwhile, non-operating income expanded to ¥5.5B (¥2.1B in the previous year), with dividends received of ¥2.6B and equity-method investment gains of ¥1.9B contributing to an improvement in ordinary income to ¥9.5B (+15.8%). Net income remained at the previous year's level at ¥6.3B (+0.0%). In conclusion, the Company experienced lower revenue and lower profit at the operating level, while overall earnings benefited from support from non-operating income.
The Machinery Parts Business became the core business, generating operating income of ¥2.3B, or more than half of the Company-wide total (approximately 51%). In contrast, the Industrial Equipment Business posted a significant decline in profit to ¥0.5B (-82.3%), with its profit margin falling to 1.4%. The Industrial Materials Business also reported lower profit of ¥1.6B (-25.6%), with its profit margin remaining at 2.4%. The three businesses ranked by profit margin were Machinery Parts at 4.3%, Industrial Materials at 2.4%, and Industrial Equipment at 1.4%, indicating a structure in which deteriorating project profitability in the Industrial Equipment Business reduced the Company's overall operating profit margin to 2.9%.
【Profitability】The operating profit margin deteriorated to 2.9% from approximately 4.6% in the previous year, and the gross profit margin also declined to 18.2%. However, due to the increase in non-operating income, the ordinary income margin improved to 6.2% (5.1% in the previous year), while the net profit margin improved to 4.1% (4.0% in the previous year). 【Cash Quality】Cash and deposits were substantial at ¥112.4B, significantly exceeding short-term borrowings of ¥13.2B. However, accounts receivable of ¥162.8B and inventories of ¥77.1B remain somewhat high, leaving room to reduce working capital. 【Investment Efficiency】ROE was 1.9%, EPS was ¥52.91 (¥52.32 in the previous year, +1.1%), and BPS was ¥2,750.37 (¥2,644.20 in the previous year), indicating gradual improvement in per-share indicators. 【Financial Soundness】The equity ratio rose to 55.9% (53.5% in the previous year), while interest-bearing debt remained low at ¥2.47B, indicating a conservative and stable financial foundation.
As detailed disclosure of the cash flow statement is not available for this financial report, cash trends are analyzed based on changes in the balance sheet. Cash and deposits increased to ¥112.4B from ¥99.1B in the previous year, while investment securities also expanded to ¥127.7B (¥113.2B in the previous year), indicating continued accumulation on the asset side. On the other hand, accounts receivable decreased to ¥162.8B (¥190.0B in the previous year), suggesting progress in collections, but inventories remained elevated at ¥77.1B. Improving inventory efficiency will therefore be key to enhancing capital efficiency. Treasury stock increased to ¥0.33B (¥0.15B in the previous year), suggesting that share repurchases were pursued as part of the capital policy; however, this may represent an outflow factor in financing cash flow. Cash on hand continues to significantly exceed short-term borrowings of ¥13.2B, and no immediate funding concerns are evident.
The earnings structure for the current period is characterized by an expansion in non-operating income supporting ordinary income and net income, which is an important consideration in evaluating earnings quality. Non-operating income reached ¥5.5B (3.6% of revenue), primarily comprising dividends received of ¥2.6B and equity-method investment gains of ¥1.9B. Both items depend on the performance and dividend policies of investee companies. Interest expense was minimal at ¥0.2B and was not a factor weighing on earnings. Income taxes and other taxes were ¥3.2B against profit before tax of ¥9.5B, implying an effective tax rate of approximately 33%; no notable temporary tax factors were identified. Meanwhile, accounts receivable and inventories remain elevated, and delays in cash conversion from operating activities warrant attention from an accrual perspective.
Progress in Q1 against the full-year plan (revenue of ¥660.0B, operating income of ¥23.0B, and ordinary income of ¥25.5B) was 23.4% for revenue and 19.5% for operating income, both below the standard quarterly progress pace of 25%. The particularly slow progress in operating income is believed to reflect deteriorating profitability in the Industrial Equipment Business and the decline in the gross profit margin. In contrast, ordinary income progress was significantly ahead of schedule at 37.3%, as non-operating income is increasing at a pace exceeding the plan. Full-year forecasts for both operating income and ordinary income are planned to decline YoY (-11.0% and -10.4%, respectively), making a recovery at the operating level toward the second half of the fiscal year the key to achieving the plan.
The full-year dividend forecast is ¥74 (changed from ¥35 in the previous year), implying a payout ratio of approximately 36.4% based on forecast EPS of ¥203.12. Interest-bearing debt is low at ¥24.7B compared with cash on hand of ¥112.4B, indicating ample financial capacity to fund dividends. No revision to the dividend forecast had been announced as of the current quarter, and shareholder returns continue on the established path. Treasury stock increased to ¥3.3B (¥1.5B in the previous year), indicating share repurchases in addition to dividends; however, the scale is limited, and no significant change in the total return ratio has been confirmed at this time.
Deteriorating profitability in the Industrial Equipment Business: Operating income declined to ¥0.5B (-82.3% YoY), with the profit margin falling to 1.4%. The project mix and delays in passing through higher costs are reducing the Company's overall operating profit margin of 2.9%.
Low working capital efficiency: Accounts receivable of ¥162.8B and inventories of ¥77.1B remain high. The accumulation of inventory and receivables amid declining revenue is creating bottlenecks in asset efficiency (low total asset turnover) and cash conversion.
Reliance on non-operating income: Dividends received of ¥2.6B and equity-method investment gains of ¥1.9B contributed to ordinary income of ¥9.5B. Since these items are affected by the performance and dividend policies of investee companies, attention is required regarding earnings sustainability if operating-level improvement does not follow.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Profit Margin | 2.9% | 4.3% (1.7%–6.9%) | -1.4pt |
| Net Profit Margin | 4.1% | 3.8% (1.5%–5.1%) | +0.3pt |
The operating profit margin is below the industry median, while the net profit margin is slightly above the median due to the contribution from non-operating income.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | -3.6% | 3.1% (-0.6%–11.7%) | -6.7pt |
The revenue growth rate is significantly below the industry median, confirming the Company's relative underperformance in terms of growth within the industry.
※Source: Compiled by the Company
Operating income declined significantly by -38.8%, but ordinary income and net income remained at approximately the previous year's levels due to increases in dividends received and equity-method investment gains. The increased reliance on non-operating income is notable from the perspective of earnings quality.
The disparity in profit margins among segments has widened. Deteriorating profitability in the Industrial Equipment Business (1.4%), compared with the Machinery Parts Business (4.3%), is reducing the Company's overall operating profit margin. Segment-level profitability trends will determine future performance.
Progress against the full-year plan is behind schedule for operating income at 19.5%, while ordinary income is ahead of schedule at 37.3%. Recovery in operating-level profitability toward the second half of the fiscal year will be the pivotal factor in achieving the plan.
This is a reference range mechanically calculated solely from publicly disclosed data using a residual income model (Ohlson-type model with an explicit 5-year fade). It is not a forecast of the market share price or a recommendation of any specific investment action.
| Scenario | Theoretical Share Price |
|---|---|
| bear (Bearish) | ¥2,568 |
| base (Base) | ¥2,588 |
| bull (Bullish) | ¥2,624 |
| Calculation Assumption | Value |
|---|---|
| Book Value per Share (BPS) | ¥2,750 |
| Adjusted Forecast EPS | ¥210.6 |
| Cost of Equity r | 9.77% (10-year government bond 2.77% + equity risk premium 6.00% + size premium 1.00%) |
| Residual Income Persistence Coefficient ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 36.4% |
| Forecast EPS Confidence Adjustment | ×1.037 (based on the historical guidance achievement rate of peer companies) |
| implied PBR / PER |
Sensitivity: ¥2,517–¥2,663 at ±1% for the cost of equity, and ¥2,583–¥2,592 at ±0.1 for ω.
Notes:
(Calculation model: Residual Income Model / Interest Rate Reference Month: 2026-07 / This value does not predict or guarantee the future share price)
This report is an earnings analysis document automatically generated by AI through analysis of XBRL earnings report data. It does not recommend investment in any specific security. The 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 with a professional advisor as necessary.
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| 0.94x / 12.3x |