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 | ¥246.8B | ¥232.7B | +6.1% |
| Operating Income | ¥54.8B | ¥53.5B | +2.3% |
| Equity-Method Investment Gain/Loss | - | - | - |
| Ordinary Income | ¥55.2B | ¥53.8B | +2.7% |
| Net Income | ¥37.5B | ¥36.4B | +3.0% |
| ROE | 12.0% | 12.9% | - |
The company secured higher revenue and profit, although margins declined slightly due to increases in selling, general and administrative expenses and costs. Revenue was ¥246.8B (+6.1% YoY), Operating Income was ¥54.8B (+2.3%), Ordinary Income was ¥55.2B (+2.7%), and Net Income was ¥37.5B (+3.0%). The Operating Income margin contracted to 22.2% from the previous year, primarily because the increase in SG&A expenses (+7.9%) exceeded revenue growth.
【Revenue】Revenue increased 6.1% YoY to ¥246.8B. By segment, the Active Pharmaceutical Ingredient Sales Business led growth with revenue of ¥169.6B (68.7% of total revenue, +6.5% YoY), while the Pharmaceutical Manufacturing and Sales Business posted ¥89.6B (31.3% of total revenue, +3.4%), representing steady growth.
【Profit and Loss】Operating Income increased 2.3% to ¥54.8B, but both the gross margin, at 32.4% (approximately 33.1% in the previous year), and the Operating Income margin, at 22.2% (approximately 23.0% in the previous year), contracted. Cost of sales increased 7.1% and SG&A expenses increased 7.9%, both exceeding revenue growth (+6.1%), and higher costs weighed on profit growth. Non-operating income and expenses were modest, comprising income of ¥1.0B and expenses of ¥0.5B, and were broadly neutral. Extraordinary income and expenses were also immaterial, including a gain on the sale of fixed assets of ¥0.04B. Accordingly, Ordinary Income of ¥55.2B and Net Income of ¥37.5B largely reflected business operations. Overall, the company delivered higher revenue and profit, but margins are entering a phase of slight deterioration.
The Active Pharmaceutical Ingredient Sales Business continued to make the largest contribution to profit, with revenue of ¥169.6B (+6.5% YoY), Operating Income of ¥33.1B (+3.0%), and a profit margin of 19.5%. The Pharmaceutical Manufacturing and Sales Business recorded revenue of ¥89.6B (+3.4%), Operating Income of ¥21.2B (-0.6%), and a profit margin of 23.7%. While profitability remained high, profit failed to grow commensurately with revenue, indicating that the business is in an investment-led phase. Total segment assets increased 11.8% YoY to ¥389.9B, with a notable increase in assets in the Pharmaceutical Manufacturing and Sales Business, reflecting capital investment.
【Profitability】The Operating Income margin was 22.2% and the Net Income margin was 15.2%, both slightly below the previous year.【Cash Flow Quality】Operating Cash Flow (OCF) was ¥75.9B, approximately 2.0 times Net Income of ¥37.5B, indicating strong cash backing for earnings.【Investment Efficiency】ROE was 12.0%, while total assets expanded 9.5% YoY to ¥395.3B, indicating a temporary decline in asset efficiency due to large-scale investments.【Financial Soundness】The Equity Ratio was exceptionally high at 78.9%, and current assets of ¥253.3B compared with current liabilities of ¥69.5B indicate ample short-term payment capacity.
Operating Cash Flow increased substantially by 101.0% YoY to ¥75.9B, demonstrating strong cash-generating capacity well in excess of Net Income. Progress in the collection of trade receivables (+¥34.6B) and a decrease in inventories (+¥4.3B) contributed to cash generation and absorbed corporate income tax payments of ¥18.8B. Investing Cash Flow recorded a substantial outflow of -¥81.5B, primarily due to the acquisition of property, plant and equipment, an increase in construction in progress, and increased investments in securities. As a result, Free Cash Flow was negative at -¥5.6B. However, Financing Cash Flow was +¥1.9B, and the company has a financial foundation capable of adequately absorbing the investment-led phase, supported by ample cash and deposits of ¥172.1B.
Current-period profit was primarily generated by business operations, while extraordinary income was limited to a gain on the sale of fixed assets of ¥0.04B, indicating limited impact from one-time factors. Non-operating income was ¥1.0B, equivalent to approximately 0.4% of revenue, and was not large enough to distort earnings quality. The difference between Ordinary Income of ¥55.2B and Net Income of ¥37.5B was mainly attributable to corporate income taxes and other taxes of ¥17.8B, implying an effective tax rate of approximately 32%. OCF was approximately 2.0 times Net Income, indicating limited accruals; from the perspective of cash backing for earnings, earnings quality can be assessed as high.
The company forecasts revenue of ¥267.0B (+8.2% YoY), but Operating Income of ¥52.7B (-3.8%) and Ordinary Income of ¥52.6B (-4.7%), implying higher revenue but lower profit in the next fiscal year. While the current fiscal year delivered higher revenue and profit, the forecast for the next fiscal year appears conservative, incorporating costs associated with commissioning facilities accompanying expanded investment, higher depreciation and amortization, and a time lag in passing through higher prices. Forecast EPS is expected to decline to ¥85.24 from actual EPS of ¥89.00 in the current fiscal year, indicating that margin pressure is expected to continue into the next fiscal year.
The dividend for the current fiscal year was ¥18 at year-end (¥0 interim), resulting in a Payout Ratio of 20.2%. The dividend forecast for the next fiscal year is ¥19, indicating a policy of dividend increases. Against Net Income growth of +3.0%, the company maintained the previous year's dividend level (the previous-year Payout Ratio was broadly at a similar level based on the available information). No share repurchases were identified, and shareholder returns remain centered on dividends. Supported by cash and deposits of ¥172.1B and OCF of ¥75.9B, there are no apparent concerns regarding the sustainability of shareholder returns.
Segment and customer concentration risk: The Active Pharmaceutical Ingredient Sales Business accounts for 68.7% of revenue, while sales to the major customer Fuso Pharmaceutical Industries, Ltd. account for 22.9%. The company has a structure with high dependence on a specific business and customer, making it susceptible to fluctuations in demand.
Margin pressure: Both the gross margin of 32.4% and the Operating Income margin of 22.2% contracted from the previous year. The increase in SG&A expenses (+7.9%) exceeded revenue growth (+6.1%), making cost control an area to monitor.
Deterioration in Free Cash Flow due to investment-led growth: Investing Cash Flow resulted in a substantial outflow of -¥81.5B, causing Free Cash Flow to turn negative at -¥5.6B. Construction in progress increased significantly, creating a time lag between investment and cash generation until the facilities become operational.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Income Margin | 22.2% | 3.4% (1.5%–4.8%) | +18.8pt |
| Net Income Margin | 15.2% | 2.6% (0.9%–4.7%) | +12.6pt |
Both the Operating Income margin and Net Income margin substantially exceeded the industry median, demonstrating high profitability within the industry.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 6.1% | 5.6% (-0.1%–12.1%) | +0.5pt |
The Revenue Growth Rate slightly exceeded the industry median but remained within the IQR, indicating a standard growth pace within the industry.
※Source: Based on company research
High profitability and strong cash-generating capacity: The Operating Income margin of 22.2% and Net Income margin of 15.2% substantially exceeded the industry median, while OCF was approximately 2.0 times Net Income, providing strong cash backing for earnings.
Temporary pressure on margins and FCF due to the investment-led phase: Large-scale investments, including ¥65.9B in construction in progress, are under way. Free Cash Flow turned negative in the current fiscal year, and the forecast for the next fiscal year also calls for higher revenue but lower profit. Progress in monetizing the assets after the facilities become operational will be a key focus.
High business and customer concentration: The company has a high degree of dependence on the Active Pharmaceutical Ingredient Sales Business and major customers. Differences in segment profit margins—23.7% for the Pharmaceutical Manufacturing and Sales Business versus 19.5% for the Active Pharmaceutical Ingredient Sales Business—and trends in asset allocation will be factors influencing the future earnings structure.
This is a mechanically calculated reference range based solely on publicly available data using a residual income model (Ohlson-type model with an explicit 5-year fade period). It is not a forecast of the market share price or a recommendation to take any specific investment action.
| Scenario | Theoretical Share Price |
|---|---|
| bear (downside) | 778円 |
| base (base case) | 787円 |
| bull (upside) | 804円 |
| Calculation Assumption | Value |
|---|---|
| Book Value per Share (BPS) | 740円 |
| Adjusted Forecast EPS | 88.4円 |
| Cost of Equity r | 9.77%（10-year Japanese government bond 2.77% + Equity Risk Premium 6.00% + Size Premium 1.00%） |
| Residual Income Persistence Factor ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 22.3% |
| Forecast EPS Confidence Adjustment | ×1.037（based on the historical guidance achievement rate of comparable companies） |
| implied PBR / PER |
Sensitivity: 765円〜811円 at Cost of Equity ±1%; 786円〜789円 at ω±0.1.
（Calculation model: Residual Income Model / Interest Rate Reference Month: 2026-07 / This figure does not forecast or guarantee future share prices）
This report is an earnings analysis document automatically generated by AI based on XBRL financial results summary data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the company based on publicly available financial results data. Investment decisions should be made at your own responsibility, and you should consult a professional advisor as necessary.
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| 1.06倍 / 8.9倍 |