Aoyama Zaisan Networks Company,Limited FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥34.12B
• Operating Income: ¥3.61B
• Net Income: ¥1.69B
• EPS: ¥100.66

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend 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

Aoyama Zaisan Networks reported solid FY2025 Q3 consolidated results under JGAAP, with revenue of ¥34.12bn (+6.9% YoY) and operating income of ¥3.61bn (+49.7% YoY), indicating strong operating leverage. Gross profit reached ¥4.86bn, implying a gross margin of 14.2%, while operating margin expanded to 10.6%, outpacing top line growth. Ordinary income came in at ¥3.50bn, and net income was ¥2.41bn (+42.8% YoY), translating to an EPS of ¥100.66. DuPont analysis shows ROE of 21.33%, driven by a 7.07% net margin, 1.379x asset turnover, and 2.19x financial leverage. Implied ROA is approximately 9.8% (net margin × asset turnover), reflecting efficient use of assets in a transaction-driven model. Liquidity is robust with a current ratio of 270% and working capital of ¥9.71bn, supported by current assets of ¥15.42bn versus current liabilities of ¥5.71bn. The balance sheet indicates moderate leverage (total liabilities/equity of 1.11x), and the implied equity ratio is approximately 45.7% (equity/total assets), though the reported equity ratio field shows 0% due to non-disclosure formatting. Interest burden appears low with interest expense of ¥60m and interest coverage of roughly 60x. The effective tax rate, implied at about 19.8% (¥694m tax on roughly ¥3.5bn pre-tax), appears reasonable for the company’s profile despite the “0.0%” summary metric. Cash flow statements (operating, investing, financing) and cash balances were not disclosed in this dataset (reported as zeros), so cash generation and conversion cannot be verified here. Dividend details are also not disclosed in this extract (DPS and payout reported as zeros), limiting assessment of capital return policy for this period. Based on EPS and net income, the implied average diluted share count is around 23.9 million shares, but official share data were not provided. Overall, profitability momentum is strong, leverage is manageable, and liquidity is ample; the primary analytical gap is the absence of cash flow and dividend data to validate earnings quality and payout sustainability.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 7.07%
• asset_turnover: 1.379
• financial_leverage: 2.19
• calculated_ROE: 21.33%
• implied_ROA: ≈9.8% margin_quality:
• gross_margin: 14.2% (¥4.86bn/¥34.12bn)
• operating_margin: 10.6% (¥3.61bn/¥34.12bn)
• ordinary_margin: 10.3% (¥3.50bn/¥34.12bn)
• net_margin: 7.07% (¥2.41bn/¥34.12bn)
• commentary: Operating margin significantly exceeds gross margin spread, implying strong SG&A discipline and favorable mix/fee economics. The gap between operating and net margins reflects taxes and modest interest costs. operating_leverage:
• revenue_growth_YoY: 6.9%
• operating_income_growth_YoY: 49.7%
• incremental_margin_estimate: ≈54.6% [(¥1.20bn OI increase) / (¥2.20bn revenue increase)]
• commentary: High incremental margins suggest strong operating leverage, likely due to scale effects and higher-margin advisory/transaction revenues in the period.

Growth Assessment

revenue_sustainability: Top-line growth of 6.9% YoY indicates steady demand in core services; sustainability will depend on the pipeline of succession/wealth and real-estate related mandates, which are inherently cyclical and transaction-driven. profit_quality: Outsized operating income growth versus revenue implies mix improvements and cost control; however, absent cash flow data, conversion of earnings to cash cannot be verified. outlook: With asset turnover at 1.38x and ROE above 20%, profitability momentum is favorable. Near-term performance will hinge on maintaining deal flow, repeat/recurring fee streams, and preserving elevated incremental margins amid potential macro and interest-rate headwinds.

Financial Health

liquidity:

• current_assets: 15415000000
• current_liabilities: 5705000000
• current_ratio: 270.2%
• quick_ratio: 270.2% (inventories undisclosed)
• working_capital: 9710000000
• commentary: Very strong short-term liquidity; cash balance not disclosed, so the composition of current assets (cash vs. receivables/other) is unknown. solvency_and_capital_structure:
• total_assets: 24743000000
• total_liabilities: 12575000000
• total_equity: 11302000000
• debt_to_equity: 1.11x (liabilities/equity)
• implied_equity_ratio: ≈45.7% (equity/assets); reported field shows 0% due to non-disclosure
• interest_expense: 60000000
• interest_coverage: ≈60x (EBIT ¥3.61bn / interest ¥60m)
• commentary: Moderate leverage with strong interest coverage. Breakdown of interest-bearing debt not provided, but low interest expense suggests conservative debt load or favorable funding terms.

Cash Flow Quality

earnings_quality: Net income of ¥2.41bn with high margins is encouraging, but cash conversion cannot be assessed as OCF/FCF were not disclosed in this dataset. FCF_analysis: Free cash flow not available (OCF and capex undisclosed). Therefore, FCF coverage of dividends and leverage-free cash generation cannot be evaluated. working_capital: Working capital is sizable at ¥9.71bn, supporting operations; however, without AR/AP/inventory turnover data, the cash conversion cycle cannot be analyzed.

Dividend Sustainability

payout_ratio_assessment: Dividend data for the period were not disclosed here (DPS and payout ratio fields show zero placeholders). EPS is ¥100.66, but payout cannot be computed without actual DPS. FCF_coverage: Not assessable due to undisclosed OCF/FCF. policy_outlook: Company historically emphasizes shareholder returns, but current dataset does not provide policy updates or guidance. Sustainability will depend on confirmed cash generation and capital allocation priorities.

Risk Assessment

Business Risks:

• Transaction-driven revenue sensitivity to real estate and succession/wealth advisory cycles
• Exposure to macroeconomic conditions and interest-rate levels affecting client appetite and asset values
• Competitive pressure in wealth management, business succession, and real estate solutions
• Execution risk in maintaining high incremental margins as volumes normalize
• Regulatory/tax policy changes impacting inheritance, business succession, and property markets

Financial Risks:

• Limited visibility on cash flows and cash balances due to non-disclosure in this dataset
• Potential credit risk in receivables during downturns (details not disclosed)
• Refinancing/interest-rate risk on any interest-bearing liabilities (debt breakdown not provided)
• Margin compression risk if SG&A scales faster than revenue

Key Concerns:

• Absence of operating and free cash flow data to validate earnings quality
• Dependence on deal flow and market conditions for revenue growth
• Unclear dividend payout details for the period, limiting capital return assessment

Investment Implications

Key Takeaways:

• Strong profitability with ROE at 21.33% supported by 1.379x asset turnover and 2.19x leverage
• Operating leverage evident: +6.9% revenue growth drove +49.7% operating income growth; incremental margin ≈55%
• Healthy liquidity (current ratio 270%) and moderate leverage (liabilities/equity 1.11x) with robust interest coverage (~60x)
• Margins solid (gross 14.2%, operating 10.6%, net 7.07%), suggesting disciplined cost structure and favorable mix
• Key missing disclosures: cash flows, cash balance, dividend details; these are essential to confirm earnings durability and payout capacity

Metrics to Watch:

• Operating cash flow and free cash flow conversion versus net income
• Deal pipeline/backlog and mix of recurring fees vs. transaction-driven revenues
• Gross margin and SG&A-to-sales to gauge sustainability of incremental margins
• Tax rate normalization (implied ~20%) and any changes from policy or business mix
• Interest-bearing debt levels and effective interest rate, given macro rate trends

Relative Positioning: Within Japanese advisory/real estate solutions peers, the company exhibits above-average ROE and strong liquidity with moderate leverage. The main differentiator this period is high operating leverage, but relative attractiveness hinges on confirming cash generation and the stability of transaction volumes.

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