THE KEIHIN CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥25.40B
• Operating Income: ¥1.85B
• Net Income: ¥1.10B
• EPS: ¥209.14

Income Statement

Balance Sheet

Cash Flow Statement

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

Keihin Co., Ltd. (9312) delivered a solid FY2026 Q2, showing clear operating leverage amid modest top-line growth. Revenue increased 2.0% year over year to ¥25.40bn, while operating income rose 22.4% to ¥1.85bn, indicating strong cost discipline and scale benefits. Gross profit of ¥2.59bn implies a gross margin of 10.2%, and operating margin reached 7.3%, a notable level for asset-heavy logistics. Net income was ¥1.37bn (+24.1% YoY), with a net margin of 5.37%, supported by low interest expense (¥30m) and positive non-operating contributions. DuPont decomposition aligns with reported figures: net margin 5.37%, asset turnover 0.479x, and financial leverage 1.67x produce an ROE of 4.30%. Given this is a half-year period, point-in-time ROE is not annualized and may understate full-year returns if momentum continues. Liquidity appears robust with a current ratio of 176% and working capital of ¥6.84bn, while solvency is strong: liabilities-to-equity is 0.66x and interest coverage is 61.6x. Operating cash flow of ¥2.25bn exceeds net income (OCF/NI 1.65x), suggesting healthy earnings quality and positive working capital dynamics. EBITDA of ¥2.81bn (11.1% margin) provides ample cushion for maintenance needs, though capex is undisclosed this quarter. The calculated equity ratio from reported balances is approximately 59.8% (equity ¥31.73bn / assets ¥53.04bn), despite the table showing 0.0% (which we treat as undisclosed). Dividends are listed as zero for the period; financing cash outflows of ¥653m likely reflect debt repayments and/or shareholder returns, but details are not disclosed. Several items (cash and equivalents, investing cash flows, inventories, outstanding shares) are unreported, limiting per-share, capex/FCF, and working capital depth analyses. Overall, the company demonstrates improving profitability on stable revenue, strong cash conversion, and a conservative balance sheet. Key sensitivities include freight volumes, labor availability, fuel and energy costs, and capex requirements, which are not visible this quarter. Near-term outlook hinges on sustaining margin gains while maintaining service levels and capacity in a tight logistics labor market. Monitoring capex disclosures in subsequent quarters will be essential to validate free cash flow and dividend capacity.

Profitability Analysis

• ROE decomposition (DuPont): Net profit margin 5.37% × Asset turnover 0.479x × Financial leverage 1.67x = ROE 4.30%, consistent with the reported value.
• Margin profile: Gross margin 10.2% (¥2.586bn/¥25.398bn), operating margin 7.3% (¥1.849bn/¥25.398bn), EBITDA margin 11.1% (¥2.811bn/¥25.398bn), and net margin 5.37% (¥1.365bn/¥25.398bn). This reflects efficient cost control and likely favorable mix/non-operating items.
• Operating leverage: With revenue up ~¥0.50bn YoY (+2%) and operating income up ~¥0.34bn (+22.4%), implied incremental operating margin is roughly 68%, evidencing a largely fixed cost base and effective SG&A discipline.
• Cost of sales dynamics: Cost of sales at ¥22.33bn suggests modest unit cost pressure; the widening spread to operating income indicates SG&A efficiency.
• Non-operating line: Ordinary income of ¥2.01bn vs. operating income of ¥1.85bn implies net non-operating gain of ~¥0.16bn; interest expense is small at ¥30m, so financial costs are not a drag.
• Taxation: Income tax expense is ¥0.56bn; based on net income of ¥1.37bn, the implied effective tax rate is approximately 29% (not 0.0% as shown in the summary metrics, which we treat as undisclosed, not zero).
• Return on assets: Using net income and average assets is not possible with available data; point-in-time ROA proxy using period-end assets is ~2.6% (¥1.365bn/¥53.036bn) for the half-year, not annualized.
• Quality of earnings: High OCF/NI (1.65x) corroborates that profit expansion is cash-backed rather than accrual-driven.

Growth Assessment

• Revenue sustainability: Top-line growth was modest at +2.0% YoY to ¥25.40bn, indicating stable demand despite macro uncertainties in freight and port logistics.
• Profit growth quality: Operating income rose +22.4% YoY to ¥1.85bn, outpacing sales growth, indicating improved mix, pricing discipline, and fixed cost absorption; net income grew +24.1% to ¥1.37bn.
• Incremental profitability: Implied incremental operating margin of ~68% suggests strong operating leverage this period; persistence depends on volume stability and cost control (labor, fuel, subcontracting).
• Outlook considerations: With a conservative balance sheet and strong cash conversion, the company is positioned to sustain margin improvements if demand holds; risks include fuel cost volatility, labor availability, and potential normalization of non-operating gains.
• Data limitations: Lack of order/backlog information and sector demand indicators in this release constrains forward visibility; investing plans (growth capex, automation) are not disclosed, limiting medium-term growth assessment.
• Watch for: Pricing power in contract renewals, utilization of logistics assets, and potential network optimization initiatives to sustain margin expansion.

Financial Health

• Liquidity: Current assets ¥15.82bn vs. current liabilities ¥8.98bn yields a current ratio of 176%; working capital stands at ¥6.84bn, indicating comfortable short-term coverage. Quick ratio is presented as 176%, but inventories are undisclosed this period.
• Solvency: Total liabilities ¥20.85bn versus equity ¥31.73bn implies liabilities-to-equity of 0.66x and an equity ratio of approximately 59.8% (calculated), indicating a conservative capital structure.
• Interest coverage: Operating income/interest expense is 61.6x (¥1.849bn/¥30m), demonstrating minimal refinancing risk under current conditions.
• Asset base: Total assets are ¥53.04bn; leverage (assets/equity) is 1.67x, consistent with DuPont inputs.
• Cash position: Cash and equivalents are not disclosed in this period; we cannot assess immediate cash buffers but note strong OCF.
• Maturity profile: Not disclosed; however, the low reliance on debt and ample equity reduce near-term solvency risk.

Cash Flow Quality

• Earnings-to-cash conversion: Operating cash flow of ¥2.25bn vs. net income of ¥1.37bn yields OCF/NI of 1.65x, indicating robust conversion and likely favorable working capital timing.
• Free cash flow: Investing cash flow is undisclosed this period; therefore, FCF cannot be determined and the reported zero should not be interpreted as actual zero.
• Depreciation: D&A of ¥962m supports EBITDA and implies meaningful asset base; capex is not provided, so maintenance vs. growth spend cannot be assessed.
• Working capital: Current ratios suggest headroom, but component details (inventories, receivables, payables movements) are not disclosed; OCF strength suggests either efficient collections or controlled payables management.
• Financing flows: Net financing cash outflow of ¥653m likely reflects debt repayment and/or shareholder returns; without cash balance and capex, we cannot triangulate net FCF after distributions.

Dividend Sustainability

• Policy/status: Annual DPS is shown as ¥0 and payout ratio 0%; given financing cash outflows, it is possible distributions occurred via other means or will be determined at year-end. We treat DPS and payout as undisclosed for the period.
• Coverage: With EPS at ¥209.14 for the half-year and strong OCF, capacity exists for payouts; however, FCF is not ascertainable due to undisclosed investing cash flows, preventing a robust coverage analysis.
• Balance sheet support: Calculated equity ratio ~59.8% and low interest burden provide flexibility for dividends over the medium term, subject to capex needs.
• Outlook: Dividend decisions will likely hinge on full-year cash generation and capex cadence; transparency on capex and year-end policy will be key for assessing sustainability.

Risk Assessment

Business Risks:

• Demand sensitivity to domestic and international trade flows impacting freight volumes
• Fuel and energy cost volatility affecting transportation margins
• Labor availability and wage inflation in logistics (drivers/warehouse staff)
• Customer pricing pressure at contract renewals
• Operational disruptions (port congestion, supply chain bottlenecks, weather events)

Financial Risks:

• Capex intensity risk not visible due to undisclosed investing cash flows
• Potential working capital swings from receivables/seasonality affecting cash timing
• Limited disclosure on cash balances and debt maturities
• Non-operating income normalization risk reducing ordinary income

Key Concerns:

• Multiple financial statement items are undisclosed this quarter (cash, investing CF, inventories, shares), limiting depth of analysis
• Sustainability of high incremental margins if volume growth moderates
• Visibility on capex plans required to validate medium-term FCF and dividend capacity

Investment Implications

Key Takeaways:

• Solid margin expansion with operating income up 22.4% on 2.0% revenue growth indicates strong operating leverage
• Earnings quality is strong with OCF/NI at 1.65x
• Capital structure is conservative (calculated equity ratio ~59.8%, liabilities/equity 0.66x) and interest burden is minimal
• EBITDA margin at 11.1% provides cushion for maintenance needs; capex disclosure is needed to assess FCF
• Dividend capacity exists in principle but current-period DPS and capex are undisclosed

Metrics to Watch:

• Operating margin sustainability and incremental margin on new revenue
• Capex and investing cash flows to derive true FCF
• Cash and equivalents balance and net debt/EBITDA
• Working capital turns (DSO/DPO) once disclosed
• Fuel cost pass-through and contract pricing updates
• Volume indicators in key logistics end-markets

Relative Positioning: Within domestic logistics peers, Keihin appears to combine mid-to-high single-digit operating margins with low leverage and strong cash conversion, positioning it as a disciplined operator with balance sheet resilience; fuller comparison awaits disclosure of capex and cash balances.

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