Meiko Trans Co., Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥40.60B
• Operating Income: ¥3.21B
• Net Income: ¥2.65B
• EPS: ¥96.90

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

Meiko Trans Co., Ltd. (9357) reported FY2026 Q2 consolidated results under JGAAP with revenue of ¥40.605 billion, up 0.9% year on year, indicating broadly flat top-line conditions amid a steady logistics environment. Gross profit was ¥8.529 billion, corresponding to a gross margin of 21.0%, demonstrating resilient unit economics despite muted volume growth. Operating income rose 7.8% YoY to ¥3.206 billion, lifting the operating margin to approximately 7.9% and evidencing positive operating leverage from cost control and mix. Ordinary income reached ¥4.264 billion, exceeding operating income by roughly ¥1.058 billion due to net non-operating gains (e.g., investment income), which supported the bottom line. Net income increased 16.8% YoY to ¥2.899 billion, translating to a net margin of 7.14% and a reported EPS of ¥96.90. The effective tax rate, inferred from disclosed income tax expense of ¥1.323 billion and pre-tax income of approximately ¥4.222 billion, is about 31.3%, which is broadly in line with statutory rates. Balance sheet strength is notable: total assets were ¥161.255 billion against total liabilities of ¥27.596 billion and total equity of ¥132.491 billion. While the reported equity ratio is shown as 0.0% (undisclosed), the implied equity ratio is approximately 82.2% (equity/total assets), indicating a very conservative capital structure. Liquidity appears robust with current assets of ¥50.624 billion and current liabilities of ¥11.957 billion, yielding a current ratio of 423% and working capital of ¥38.667 billion. Leverage remains low with debt-to-equity approximating 0.21x (total liabilities/equity), and interest coverage is very strong at 185.1x, reflecting minimal interest burden (interest expense ¥17 million). DuPont decomposition indicates ROE of 2.19% based on a net margin of 7.14%, asset turnover of 0.252x, and financial leverage of 1.22x; the low leverage and modest asset turnover cap ROE despite healthy margins. Non-operating contributions were material this period, boosting ordinary and net margins relative to operating performance, which warrants monitoring for sustainability. Reported cash flow items (OCF, investing CF, financing CF) are undisclosed in this dataset, preventing an assessment of cash conversion and free cash flow for the half. Depreciation and amortization are also undisclosed, though the business is likely asset-intensive; therefore, EBITDA metrics shown as zero should be treated as not reported rather than actual. Dividend data for the period are not provided (DPS shown as 0.00), and share data are undisclosed; this limits per-share and payout analyses beyond EPS. Overall, the company combines steady revenue, improved operating leverage, very strong solvency, and significant non-operating income, but clearer visibility on cash generation and capital allocation would further clarify earnings quality and dividend capacity.

Profitability Analysis

ROE_decomposition: Reported DuPont shows net margin 7.14% x asset turnover 0.252 x financial leverage 1.22 = ROE 2.19%. ROA (net margin x asset turnover) is about 1.80%, indicating modest asset efficiency. Low leverage (implied equity ratio ~82.2%) limits ROE despite decent margins, consistent with a conservatively capitalized logistics operator. margin_quality: Gross margin is 21.0% (¥8.529b/¥40.605b). Operating margin is ~7.9% (¥3.206b/¥40.605b). Ordinary margin is 10.5% (¥4.264b/¥40.605b), signaling a positive non-operating contribution (¥1.06b). Net margin is 7.14%. Tax burden approximates 31.3%, broadly normal. The gap between operating and ordinary income suggests reliance on investment or other non-core income, elevating reported profitability above core operations. operating_leverage: Revenue grew 0.9% YoY while operating income rose 7.8% YoY, indicating positive operating leverage driven by SG&A discipline and/or favorable mix. SG&A (implied) is ~¥5.323b (gross profit minus operating income), and its containment underpins margin expansion. This leverage is constructive but may be sensitive to volume or wage/cost inflation trends.

Growth Assessment

revenue_sustainability: Top-line growth of 0.9% YoY suggests a stable demand environment with limited pricing or volume expansion in FY2026 H1. Given the company’s port/logistics exposure, volumes likely tracked trade activity around the Chubu region; sustained growth will depend on cargo throughput and customer activity. profit_quality: Profit growth outpaced revenue, supported by cost control and sizable non-operating gains. Core operating uplift appears solid, but the ordinary-to-operating gap (~¥1.06b) implies part of earnings growth stems from non-operating sources that may not be recurring. outlook: Near-term profitability should remain resilient if operating cost discipline persists and trade volumes stabilize. Key swing factors include labor and energy costs, pricing power in stevedoring/warehousing, and the trajectory of non-operating income (e.g., dividends/valuation gains). Visibility would improve with cash flow and D&A disclosures in subsequent filings.

Financial Health

liquidity: Current assets ¥50.624b vs current liabilities ¥11.957b yields a current ratio of 423% and working capital of ¥38.667b. The quick ratio is also shown as 423%, consistent with no inventories reported in this dataset (inventory undisclosed). Liquidity appears ample. solvency: Total liabilities ¥27.596b against total equity ¥132.491b implies a debt-to-equity of ~0.21x and an inferred equity ratio near 82.2%. Interest expense is low (¥17m) and interest coverage is strong at ~185x, indicating minimal financial risk. capital_structure: Low leverage and large equity base reduce financial risk but cap ROE. The company retains capacity to fund capex or absorb shocks without stressing the balance sheet, though returns on equity may remain modest absent higher asset turnover or incremental leverage.

Cash Flow Quality

earnings_quality: OCF is undisclosed in this dataset (shown as zero), so OCF/Net Income cannot be evaluated; the displayed 0.00 ratio reflects non-disclosure rather than weak cash generation. Non-operating income’s materiality (~¥1.06b) suggests that ordinary profit includes items not tied to core cash earnings. FCF_analysis: Investing and financing cash flows are not disclosed here. Without OCF or capex/D&A, free cash flow cannot be assessed. Given the asset-intensive nature of port and logistics operations, capex needs could be meaningful; confirmation awaits detailed CF and capex notes. working_capital: Working capital is substantial at ¥38.667b. With revenue nearly flat and operating profit rising, working capital efficiency appears at least stable directionally, but detailed receivables/payables turnover cannot be analyzed due to missing breakdowns.

Dividend Sustainability

payout_ratio_assessment: Annual DPS and payout ratio are shown as 0.00 in this dataset, indicating no disclosed dividend information for the period rather than a confirmed zero payout. EPS is ¥96.90 for the half; absent declared DPS, payout cannot be assessed. FCF_coverage: Free cash flow is undisclosed, so FCF coverage of dividends cannot be evaluated. Balance sheet strength would theoretically support dividends, but sustainability depends on cash generation and capex needs once disclosed. policy_outlook: No dividend policy details are available in the provided data. Future dividend capacity will hinge on operating cash conversion, stability of non-operating income, and capital expenditure plans.

Risk Assessment

Business Risks:

• Exposure to trade volume cycles and port throughput in the Chubu region (export/import fluctuations).
• Pricing pressure in stevedoring, warehousing, and transport services amid competition.
• Labor availability and wage inflation affecting operating costs.
• Energy and fuel cost volatility impacting handling and transport expenses.
• Potential large maintenance and capex requirements for port equipment and facilities.
• Customer concentration risk with key shippers or industrial clients.
• Regulatory and port authority-related changes affecting operations and fees.

Financial Risks:

• Non-operating income reliance (investment income), which may be volatile and non-recurring.
• Asset intensity leading to potential future capex and depreciation burden.
• Interest rate risk is limited currently due to low interest expense, but future funding needs could alter exposure.
• Currency-related indirect risk via customer base and trade flows.

Key Concerns:

• Ordinary income exceeding operating income by ~¥1.06b, indicating meaningful dependence on non-core items.
• Lack of disclosed cash flow data (OCF/FCF) limits assessment of earnings-to-cash conversion.
• Undisclosed depreciation/EBITDA obscures underlying cash earnings and capex replacement needs.

Investment Implications

Key Takeaways:

• Stable revenue (+0.9% YoY) with improved operating leverage (+7.8% YoY operating income).
• Healthy core margin profile: 21.0% gross margin and ~7.9% operating margin.
• Material non-operating gains (~¥1.06b) elevate ordinary and net income.
• Very strong balance sheet: inferred equity ratio ~82.2%, debt-to-equity ~0.21x.
• Interest burden minimal with coverage ~185x, reducing financial risk.
• ROE at 2.19% is constrained by low leverage and modest asset turnover (0.252x).
• Cash flow, capex, and D&A disclosures are needed to confirm earnings quality and capital intensity.

Metrics to Watch:

• Operating cash flow and free cash flow once disclosed (OCF/NI, FCF yield).
• Capital expenditure levels and depreciation trend (capex/Dep ratio).
• Cargo throughput and utilization indicators (volume, mix, pricing).
• SG&A ratio and unit labor costs to gauge operating leverage persistence.
• Non-operating income composition (dividends, equity-method gains, securities gains/losses).
• Asset turnover and ROE trajectory relative to capital structure.
• Order/backlog or customer activity indicators tied to regional trade.

Relative Positioning: Compared with domestic port/logistics peers, the company appears more conservatively capitalized with superior solvency, solid operating margins, and low interest burden; however, profitability quality is somewhat reliant on non-operating contributions, and ROE is modest due to low leverage and asset turnover.

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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