Emimen Co.,Ltd. FY2025 Q4 Earnings Report

Financial Highlights

• Operating Income: ¥114M
• Net Income: ¥90M
• EPS: ¥22.12

Income Statement

Balance Sheet

Cash Flow Statement

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

Emimen Co., Ltd. (92370) reported FY2025 Q4 results with strong bottom-line momentum despite limited disclosure on top-line items. Operating income rose 90.3% YoY to 1.14 (100M JPY), and ordinary income increased 79.0% YoY to 1.17, indicating improved operating performance and disciplined non-operating items. Net income reached 0.89, up 88.9% YoY, translating to basic EPS of 22.12 yen on about 4.05 million average shares. The effective tax rate was 21.5%, suggesting a normalized tax burden without unusual items. Liquidity is robust: current assets of 10.06 against current liabilities of 4.30 yield a current ratio of 234% and quick ratio of 234%, underpinned by cash and deposits of 6.57. The balance sheet is conservative with total equity of 8.13 and total assets of 13.77, implying an equity ratio (derived) of approximately 59%. Long-term loans are modest at 0.97; reported debt-to-equity of 0.69x appears to reflect total liabilities-to-equity rather than interest-bearing debt. Operating cash flow was 0.76 versus net income of 0.89 (OCF/NI 0.85x), indicating positive but slightly weaker cash conversion; free cash flow defined as OCF plus investing cash flow was negative at -1.25 due to -2.01 investing outflows. EBITDA was 1.23 and interest expense only 0.01, yielding a very strong interest coverage ratio of 82.5x, which underscores low financial risk. While revenue and gross profit were unreported, the scale of assets (13.77) and cash (6.57) suggests the company remains small-cap with ample liquidity for its size. Retained earnings increased to 3.23, supporting internal funding capacity. With non-operating income and expenses nearly offset (0.05 and 0.03), earnings quality appears primarily operational. The company’s capital expenditures were modest at 0.30, but the larger investing cash outflow implies financial investments or strategic asset purchases. Dividends were not disclosed, leaving the payout framework unclear; DPS and payout ratios are therefore not assessable this period. Given limited revenue disclosure, DuPont margin and asset turnover cannot be computed, but derived ROE is approximately 11% using year-end figures. Overall, profitability strengthened meaningfully, cash generation was decent albeit below net income, and the balance sheet remains sound. Data limitations (notably revenue, gross profit, and dividend details) constrain a full assessment, but available figures point to improving fundamentals with conservative leverage.

Profitability Analysis

ROE (derived) is approximately 10.9–11.0% using net income of 0.89 and period-end equity of 8.13; note this uses ending equity due to lack of average equity disclosure. DuPont decomposition is constrained: net margin and asset turnover are not calculable without revenue; however, ROA (NI/Assets) is about 6.5%, and financial leverage (Assets/Equity) is 1.69x, consistent with the provided leverage factor. Operating income increased 90.3% YoY to 1.14 while ordinary income rose 79.0% YoY to 1.17, suggesting stronger core operations with minor non-operating contribution (non-operating income 0.05, expenses 0.03). EBITDA of 1.23 and D&A of 0.09 imply limited depreciation burden, which supports operating margins, though margin ratios cannot be computed without sales. The effective tax rate of 21.5% appears normalized, not materially inflating or depressing net margin quality. Interest burden is negligible (interest expense 0.01), and interest coverage is extremely strong at 82.5x, indicating that financial costs do not constrain profitability. With revenue unreported, operating leverage cannot be precisely measured, but the scale of YoY profit growth implies either revenue growth, cost efficiency gains, or both. The proximity of operating income (1.14) to ordinary income (1.17) and net income (0.89 after tax) indicates clean earnings with minimal distortion from non-operating items. Reported ROA (ordinary income) at 0.1% appears inconsistent with period figures (OI 1.17 vs assets 13.77 implies ~8.5% pre-tax return on assets); we rely on derived ratios from disclosed amounts.

Growth Assessment

Top-line trends are indeterminate due to unreported revenue and gross profit; however, operating income growth of +90.3% YoY and ordinary income growth of +79.0% YoY signal a strong earnings upcycle. EPS of 22.12 yen aligns with net income of 0.89, validating the earnings scale. The improvement likely reflects either higher volumes, better pricing, operating efficiency, or mix shift; confirmation requires revenue and gross margin disclosure. Non-operating items were small and balanced, so profit growth quality appears operational rather than financial. OCF of 0.76 versus NI of 0.89 (0.85x) suggests decent but not full cash conversion, which tempers the quality of earnings slightly. Investing CF of -2.01 indicates reinvestment or financial investments; if growth-investment related, this could support future capacity or revenue. D&A at 0.09 and capex at 0.30 imply a relatively light asset base; scalability may be favorable. With limited disclosure, forward outlook hinges on visibility into order trends, customer activity, and pipeline; absent these, we view growth as positive but data-constrained. Sustainability will depend on whether the margin expansion or demand drivers are structural rather than one-off.

Financial Health

Liquidity is strong: current assets 10.06 vs current liabilities 4.30 yield a current ratio of 234% and quick ratio of 234%, backed by cash of 6.57 and receivables of 2.90. Working capital stands at 5.77, providing ample short-term flexibility. Leverage is conservative: total liabilities 5.64 vs equity 8.13, implying liabilities-to-equity of 0.69x; long-term loans are 0.97, and interest costs are minimal. Derived equity ratio (equity/assets) is approximately 59% (8.13/13.77), indicating a solid capital base. Interest coverage is very comfortable at 82.5x, suggesting low refinancing or interest-rate risk. Asset composition skews to current assets (10.06) over noncurrent assets (3.70), consistent with a nimble balance sheet. Net cash position appears likely given cash (6.57) exceeds disclosed long-term loans (0.97) and current liabilities are well covered; however, short-term borrowings were unreported, so we refrain from a definitive net cash statement. No goodwill or investment securities were disclosed; noncurrent intangible assets are small at 0.22, indicating limited balance sheet intangibles risk.

Cash Flow Quality

Earnings quality is acceptable: OCF/NI at 0.85x indicates most earnings convert to cash, though not fully. Free cash flow, defined as OCF plus investing CF, was -1.25 due to significant investing outflows (-2.01), implying expansion or financial investments outweighed operating inflows. On a core basis (OCF minus capex), FCF would be approximately +0.46 (0.76 - 0.30), highlighting that discretionary or non-capex investments drove the negative total FCF. Working capital details are limited, but cash and receivables rose to a combined 9.47 versus current liabilities of 4.30, suggesting no liquidity strain from receivables. Low D&A (0.09) relative to EBITDA (1.23) implies healthy cash earnings; however, sustainability depends on maintaining operating income levels. Financing CF of +0.13 was minor relative to investing needs, indicating limited reliance on external funding this period. Overall, cash generation supports operations, while growth or financial investments consumed cash; monitoring the returns on these investments is key.

Dividend Sustainability

Dividends were unreported, and payout ratios (both calculated and reported) are not available, preventing a formal assessment of dividend policy or sustainability. With net income of 0.89 and OCF of 0.76, internal funding capacity exists for potential dividends, but the negative total FCF (-1.25) due to investing activities suggests cash was prioritized for reinvestment. Equity increased to 8.13 with retained earnings of 3.23, providing balance sheet capacity if a dividend program were to be initiated or maintained. Interest burden is minimal, improving potential dividend coverage should a payout exist. In the absence of DPS or total dividends paid, we cannot evaluate FCF coverage or DOE; thus, any view on policy stability remains tentative and data-limited.

Risk Assessment

Business Risks:

• Limited disclosure of revenue and gross profit obscures margin dynamics and demand visibility.
• Small scale (assets 13.77) may imply customer concentration and sensitivity to contract timing.
• Potential reliance on a light asset model could amplify volatility in operating income with demand swings.
• Execution risk around investments given -2.01 investing CF; uncertain returns on deployed capital.
• Competitive pressures and pricing risk cannot be assessed without gross margin data.

Financial Risks:

• Cash conversion below 1.0x (OCF/NI 0.85x) if persistent could pressure liquidity during downcycles.
• Negative total FCF (-1.25) driven by investing outflows increases reliance on cash reserves.
• Disclosure gaps on short-term borrowings and interest-bearing debt prevent a full leverage assessment.
• Potential working capital swings given receivables of 2.90; DSO not disclosed.

Key Concerns:

• Absence of revenue and cost detail limits confidence in assessing sustainability of profit growth.
• Dividend policy and payout capacity are unknown due to unreported DPS and total dividends.
• Reported ROA (ordinary income) at 0.1% appears inconsistent with disclosed totals; reliance on derived metrics is necessary.

Investment Implications

Key Takeaways:

• Strong earnings momentum: operating income +90.3% YoY, net income +88.9% YoY.
• Solid balance sheet with a derived equity ratio near 59% and high liquidity (current ratio 234%).
• Cash conversion positive but not full (OCF/NI 0.85x); total FCF negative due to stepped-up investing.
• Minimal interest burden (interest expense 0.01) and high coverage (82.5x) reduce financial risk.
• Derived ROE around 11% with modest leverage (1.69x) indicates efficient capital use.

Metrics to Watch:

• Revenue and gross profit disclosures to assess margin structure and pricing power.
• OCF/NI trend and working capital movements (AR collection efficiency).
• Breakdown of investing CF (capex vs. financial/strategic investments) and ROI on deployed capital.
• Any disclosure of DPS, payout ratio, and dividend policy.
• Order intake, backlog, or pipeline indicators to validate earnings sustainability.

Relative Positioning: Based on disclosed figures, the company exhibits stronger-than-typical profitability growth and low financial risk for a small-cap peer set, supported by high liquidity and modest leverage; however, incomplete revenue and margin disclosure makes relative margin comparison and operating efficiency benchmarking inconclusive.

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