Kyogoku unyu shoji Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥4.46B
• Operating Income: ¥158M
• Net Income: ¥49M
• EPS: ¥45.99

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

Kyogoku Unyu Shoji Co., Ltd. (TSE: 90730) delivered a solid FY2026 Q2 with clear operating leverage, as operating income rose 503.6% YoY to ¥158m on revenue growth of 8.0% to ¥4,465m. Gross profit reached ¥336m, implying a gross margin of 7.5%, which, while thin for logistics and transportation services, appears to have improved given the disproportionate increase in operating profit relative to revenue. Operating margin expanded to 3.5%, highlighting cost discipline and likely improved capacity utilization or mix effects. Ordinary income of ¥197m exceeded operating income, indicating meaningful non-operating contributions (e.g., finance income or equity-method), while net income posted ¥132m (+174.5% YoY), a 3.0% net margin. DuPont decomposition yields a ROE of 2.94%, driven by a 2.96% net margin, 0.527x asset turnover, and 1.89x financial leverage—suggesting profitability is the main constraint on ROE rather than balance sheet structure. Liquidity is adequate with a current ratio of 110.5% and working capital of ¥240m, but not ample, requiring continued discipline in receivables and payables management. Capital structure appears moderate, with total liabilities/ equity at ~0.87x and an implied equity ratio around 53% (computed as equity/ assets), despite the reported equity ratio field showing 0% (undisclosed). Interest coverage is healthy at ~16.1x, reflecting a manageable interest burden relative to operating earnings. The earnings bridge from ordinary income to net income suggests tax and possibly extraordinary items or non-controlling interests impacted the bottom line; tax expense reported at ¥20.6m but the effective tax rate field is unreliable due to missing pre-tax figures. Cash flow information is not disclosed (OCF/ICF/FCF all unreported), limiting assessment of earnings quality and cash conversion. Dividend data (DPS, payout) are also undisclosed, so capital return policy cannot be evaluated from this dataset. Overall, the quarter evidences improving profitability on modest top-line growth, a balanced balance sheet, and sufficient interest servicing capacity. However, thin gross margins and moderate liquidity warrant attention amid potential demand volatility and cost inflation. The lack of cash flow disclosure is a key limitation, particularly for evaluating sustainability of recent margin gains and working capital efficiency. Near-term focus should be on confirming that operating margin gains are structural, not temporary, and on validating cash conversion once cash flow data become available.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 2.96% (¥132m / ¥4,465m)
• asset_turnover: 0.527x (Revenue ¥4,465m / Assets ¥8,470m; period-end proxy)
• financial_leverage: 1.89x (Assets ¥8,470m / Equity ¥4,491m)
• calculated_ROE: 2.94% (matches provided DuPont result) margin_quality:
• gross_margin: 7.5% (¥336m / ¥4,465m) – low but improving implied by operating leverage
• operating_margin: 3.5% (¥158m / ¥4,465m) – significant YoY expansion (+503.6% OI vs +8% revenue)
• ordinary_margin: 4.4% (¥197m / ¥4,465m) – supported by non-operating gains
• net_margin: 3.0% (¥132m / ¥4,465m) – compressed by tax/other items below ordinary income operating_leverage: High positive operating leverage evidenced by OI growth (+503.6% YoY) on modest revenue growth (+8.0% YoY), indicating cost structure inflection and/or improved mix/utilization. Sustaining this will depend on volume stability and cost control in fuel, labor, and subcontracting.

Growth Assessment

revenue_sustainability: Revenue grew 8.0% YoY to ¥4,465m; for a transportation/logistics operator, this suggests steady demand and/or rate adjustments. Sustainability hinges on macro freight volumes, customer retention, and pricing power amid cost pass-through dynamics. profit_quality: Operating margin expansion and healthy interest coverage point to genuine operational improvement. However, thin gross margin (7.5%) limits buffer against cost shocks. Non-operating income contributed to ordinary income; durability of such items is less certain. outlook: If demand remains stable and cost initiatives persist, mid-single-digit revenue growth could translate into further operating income gains. Key to the outlook are maintaining utilization, managing fuel and labor costs, and preventing margin erosion from competitive pricing.

Financial Health

liquidity:

• current_ratio: 110.5% (CA ¥2,532m / CL ¥2,292m)
• quick_ratio: 110.5% (inventories undisclosed; using reported 0 as not-disclosed)
• working_capital: ¥240m – adequate but not abundant; careful WC management required solvency_and_capital_structure:
• total_assets: ¥8,470m
• total_liabilities: ¥3,928m
• total_equity: ¥4,491m
• equity_ratio: ≈53.0% (computed: ¥4,491m / ¥8,470m; reported field 0% is undisclosed)
• debt_to_equity: 0.87x (using total liabilities as proxy for debt due to undisclosed interest-bearing debt)
• interest_coverage: 16.1x (Operating income ¥158m / Interest expense ¥9.8m) – comfortable cushion

Cash Flow Quality

earnings_quality: Cash flow data (OCF/ICF/FCF) are undisclosed, preventing direct validation of earnings conversion or accrual intensity. FCF_analysis: Free cash flow cannot be derived due to missing OCF and capex. Depreciation is also undisclosed, limiting EBITDA construction and capex proxy analysis. working_capital: Balance sheet indicates positive working capital of ¥240m. Without cash flow statements, the direction and magnitude of receivables/payables changes cannot be assessed.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are undisclosed (0 indicates not reported). EPS is ¥45.99, but without dividend data, payout cannot be assessed. FCF_coverage: Not assessable; OCF and FCF not disclosed. policy_outlook: No explicit dividend information provided. With an implied equity ratio around 53% and improving earnings, the balance sheet could support distributions, but confirmation requires visibility on cash generation and capex needs.

Risk Assessment

Business Risks:

• Demand volatility in transportation/logistics tied to industrial activity and supply chains
• Fuel price fluctuations and pass-through risk impacting thin gross margins
• Labor availability and wage inflation in a tight labor market
• Competitive pricing pressure from larger logistics players
• Customer concentration risk (not disclosed but common in B2B logistics)

Financial Risks:

• Moderate liquidity (current ratio ~1.11x) leaves limited buffer for shocks
• Potential reliance on non-operating income to support ordinary profit
• Interest rate risk on floating-rate debt (interest-bearing debt details undisclosed)
• Limited visibility due to missing cash flow disclosures

Key Concerns:

• Sustainability of recent operating margin gains
• Absence of cash flow data to validate earnings quality and FCF
• Thin gross margin leaves little room for cost shocks

Investment Implications

Key Takeaways:

• Revenue +8.0% YoY to ¥4,465m with strong operating leverage; OI +503.6% YoY to ¥158m
• Net margin at 3.0% and ROE at 2.94% remain modest; profitability is the key ROE driver
• Ordinary income exceeds operating income, implying supportive non-operating items
• Adequate liquidity (current ratio 1.11x) and strong interest coverage (16.1x)
• Moderate leverage with implied equity ratio ~53% and liabilities/equity ~0.87x
• Cash flow and dividend data are not disclosed, limiting assessment of sustainability

Metrics to Watch:

• Operating margin and gross margin progression over coming quarters
• Operating cash flow and free cash flow once disclosed
• Receivables days and payables days (working capital discipline)
• Fuel and labor cost trends and pass-through effectiveness
• Interest-bearing debt levels and refinancing terms (when disclosed)

Relative Positioning: Within small/mid-cap Japanese logistics peers, the company shows improving operating profitability and a balanced balance sheet, but operates with thin gross margins and limited disclosed cash flow visibility compared to best-in-class peers that provide stronger FCF track records.

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