KOA SHOJI HOLDINGS CO.,LTD. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥5.95B
• Operating Income: ¥1.35B
• Net Income: ¥795M
• EPS: ¥21.18

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment 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

Koa Shoji Holdings (TSE:9273) delivered a strong FY2026 Q1, with revenue of ¥5.951bn (+18.4% YoY) and operating income of ¥1.352bn (+20.1% YoY), indicating modest positive operating leverage. Gross profit reached ¥1.658bn, translating to a healthy gross margin of 27.9%, and operating margin stood at a high 22.7% for a distributor-like business model, underscoring tight cost control and a favorable mix. Ordinary income (¥1.340bn) was slightly below operating income, implying minimal non-operating drag and a very low interest burden (interest expense ¥2.961m; coverage 456.6x). Net income was ¥891m (+12.2% YoY), yielding a net margin of 15.0%, though the implied effective tax rate from disclosed tax expense is about 30%, not 0% as shown in the summary metrics (the 0% is a data artifact). DuPont analysis shows ROE of 3.14% for the quarter based on net margin 14.97%, asset turnover 0.172x, and low financial leverage of 1.22x; on a simple annualized basis this would be materially higher, but annualization from a single quarter should be treated cautiously. The balance sheet is very conservative: equity of ¥28.348bn against assets of ¥34.521bn implies an equity ratio near 82.1% (the reported 0.0% is a disclosure anomaly), and the debt-to-equity ratio is just 0.28x. Liquidity is robust, with a current ratio of 417% and quick ratio of 384%, and working capital of ¥20.164bn, suggesting ample capacity to absorb working capital swings. Inventories are modest at ¥2.124bn relative to current assets, implying a receivables- and cash-heavy profile, although cash flow statements are unreported this quarter. Cash flow quality cannot be directly assessed because OCF, investing CF, and financing CF were not disclosed; the OCF/Net Income ratio and FCF shown as zero simply reflect missing data, not actual zero cash generation. EPS was ¥21.18; dividend data are not disclosed this quarter, so payout ratios based on DPS are not meaningful. Overall profitability is strong for the quarter, with slight YoY margin expansion suggesting disciplined SG&A management. The low interest burden and strong liquidity mitigate financial risk, while the main uncertainties relate to the sustainability of margins and working capital intensity in a distribution-oriented model. Industry-specific factors such as pricing pressure, procurement dynamics, and regulatory changes will likely drive medium-term margins. Given the limited cash flow and per-share balance sheet disclosures, conclusions on earnings quality and dividend capacity should be tentative pending subsequent quarters. The company appears well-positioned financially to navigate near-term volatility, but monitoring revenue mix, pricing, and inventory/receivables cycles will be important.

Profitability Analysis

ROE_decomposition: ROE (quarterly) = Net margin (14.97%) × Asset turnover (0.172x) × Financial leverage (1.22x) = 3.14%. The low leverage and modest asset turnover place greater importance on sustaining the elevated net margin to drive ROE. margin_quality: Gross margin is 27.9% and operating margin is 22.7%, indicating a lean operating cost base and likely favorable product/customer mix. Ordinary income modestly trails operating income, suggesting minimal non-operating headwinds. The implied effective tax rate from reported figures is ~30% (Income tax ¥405.9m / pre-tax ~¥1.340bn, adjusted for minor non-operating items), despite a displayed 0% due to data limitations. operating_leverage: Revenue grew 18.4% YoY while operating income grew 20.1% YoY. Back-solve indicates prior-year Q1 operating margin ~22.4%, implying c.+0.3ppt expansion to ~22.7% this quarter—evidence of mild positive operating leverage via SG&A discipline and/or mix.

Growth Assessment

revenue_sustainability: Top-line growth of +18.4% YoY is robust for a distribution-oriented model and likely reflects volume increases and/or mix rather than price-led expansion alone. Sustainability will depend on procurement stability, customer demand (pharmacies/medical channels), and competitive pricing dynamics. profit_quality: Net margin at ~15% and operating margin at ~23% are high versus typical distributors, hinting at differentiated sourcing or product focus. However, without OCF disclosure, conversion of earnings to cash cannot be verified this quarter. Minimal interest expense supports the quality of bottom-line results. outlook: Absent guidance, near-term prospects appear supported by scale and cost control, but margins could normalize with product mix shifts or pricing pressure. Continued revenue growth with stable SG&A ratios would maintain strong profitability; watch for the impact of any regulatory or reimbursement changes on pricing.

Financial Health

liquidity: Current ratio 416.9% and quick ratio 383.5% indicate ample short-term coverage. Working capital is ¥20.164bn, with inventories at ¥2.124bn suggesting limited stock risk relative to current assets. solvency: Debt-to-equity is 0.28x and interest coverage is 456.6x, reflecting very low financial risk. Total liabilities of ¥7.994bn vs equity ¥28.348bn imply strong solvency. capital_structure: Equity/Assets is approximately 82.1% (¥28.348bn / ¥34.521bn), far above typical peers; the reported equity ratio of 0.0% is an unreported data artifact. Leverage (Assets/Equity) is 1.22x, reinforcing conservatism.

Cash Flow Quality

earnings_quality: Earnings quality cannot be fully assessed because OCF is not disclosed this quarter (zeros indicate missing data). The small interest burden and limited non-operating impact are positives, but cash conversion remains unverified. FCF_analysis: Free cash flow is not computable due to missing OCF and capex data. Given the business model, FCF is typically sensitive to receivables and inventory cycles; the low inventory level suggests receivables may be the dominant driver. working_capital: Inventories are ¥2.124bn; with current assets at ¥26.528bn and current liabilities at ¥6.364bn, the company appears liquid. Monitoring receivables days and payables terms will be essential once detailed cash flow and working capital breakdowns are available.

Dividend Sustainability

payout_ratio_assessment: Annual DPS and payout ratio are unreported for the period; EPS is ¥21.18 for Q1, suggesting capacity for dividends if the level is maintained, but actual policy cannot be inferred from the current data. FCF_coverage: FCF coverage cannot be evaluated due to missing OCF and capex data; reported FCF of 0 is a placeholder reflecting undisclosed cash flows. policy_outlook: With high equity ratio and low leverage, balance sheet capacity for distributions appears ample, but management’s dividend policy and target payout remain undisclosed in this dataset. Future disclosures should clarify trajectory.

Risk Assessment

Business Risks:

• Pricing pressure and margin compression in pharmaceutical distribution and related channels
• Regulatory and reimbursement changes impacting product pricing and demand
• Supply chain and procurement risks affecting availability and costs
• Customer concentration risk among large pharmacy chains or medical institutions
• Product mix shifts that could normalize currently high margins
• Potential inventory obsolescence for time-sensitive products

Financial Risks:

• Working capital volatility driven by receivables collection cycles
• Credit risk from customers in a high-receivables model
• Data gaps on cash flows hinder assessment of cash conversion and FCF stability
• Tax and minority interest adjustments causing volatility between pre-tax and net income

Key Concerns:

• Lack of disclosed operating, investing, and financing cash flows in the quarter
• Equity ratio reported as 0.0% despite a strong balance sheet, highlighting mapping issues
• Sustainability of elevated operating and net margins amid competitive and regulatory pressures

Investment Implications

Key Takeaways:

• Strong Q1 growth with mild operating leverage: revenue +18.4% YoY, operating income +20.1% YoY
• High profitability for the model: gross margin 27.9%, operating margin 22.7%, net margin 15.0%
• Very conservative balance sheet: equity ratio ~82%, interest coverage 456x, D/E 0.28x
• Cash flow data absent; earnings-to-cash conversion unverified for the quarter
• ROE of 3.14% for the quarter reflects low leverage and modest asset turnover; margin sustainability is key

Metrics to Watch:

• Operating cash flow and free cash flow conversion versus net income
• Receivables days, inventory turns, and payables days to gauge working capital intensity
• Operating margin and SG&A ratio to confirm operating leverage persistence
• Revenue mix by product and customer to assess margin durability
• Tax rate normalization and any minority interest impacts on net income

Relative Positioning: Financially conservative with strong margins relative to a typical distributor/wholesaler peer set; key differentiators appear to be cost control and mix, while the main gap versus best-in-class peers is lack of disclosed cash flow data this quarter.

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
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