DAIUN CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥4.88B
• Operating Income: ¥194M
• Net Income: ¥175M
• EPS: ¥36.24

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

FY2026 Q2 results show resilient operating performance with softer bottom line due to tax and below-par cash conversion. Operating income rose 29.1% YoY to 1.94, evidencing cost control and solid core operations despite limited disclosure on gross profit. Ordinary income increased 26.7% YoY to 2.54, aided by non-operating income of 0.59, including dividend income of 0.30, highlighting meaningful contribution from investment returns. Net income declined 6.2% YoY to 1.75, with an effective tax rate of 32.7% constraining after-tax profitability. Revenue reached 48.82, putting current operating margin at roughly 4.0% and net margin at 3.6%. Margin comparisons in basis points versus last year are not computable due to missing prior-period revenue and gross profit disclosure. Non-operating income accounted for roughly a third of ordinary income (non-operating income ratio 33.6%), indicating profit composition relies partly on investment income rather than purely recurring logistics earnings. Cash flow quality is a weak spot: operating cash flow of 1.29 trails net income of 1.75 (OCF/NI 0.74x), suggesting working capital drag or timing effects. Liquidity is strong with a current ratio of 224% and cash of 13.17 covering all current liabilities of 12.22. Leverage is conservative (D/E 0.53x) and the equity ratio is approximately 64.7%, providing balance sheet resilience. ROE is modest at 4.7%, constrained by a low net margin and moderate asset turnover (0.854x). ROIC stands at 4.7%, below the 5% warning threshold, implying room for capital efficiency improvements. Financing cash flow was -2.84, driven by share repurchases of -1.22, signaling capital return but also tightening the cash bridge given sub-1x cash conversion. Capex was negligible (-0.01), implying limited near-term investment needs but also limited evidence of growth capex. Estimated dividend payout ratio is 46.3%, appearing reasonable, but true FCF coverage cannot be confirmed due to unreported investing cash flows. Going forward, sustaining operating momentum while improving cash conversion and reducing reliance on non-operating income will be key to lifting ROE/ROIC and supporting shareholder returns.

Profitability Analysis

ROE (4.7%) = Net Profit Margin (3.6%) × Asset Turnover (0.854x) × Financial Leverage (1.55x). The margin component is the primary constraint on ROE, with net margin modest at 3.6%, while asset turnover is fair for an asset-based service business and leverage is low-to-moderate. Operating margin is about 4.0% (1.94/48.82), supported by a 29.1% YoY rise in operating income; however, net margin declined YoY as net income fell 6.2% amid a higher effective tax burden and reduced below-the-line support. Non-operating income contributed 0.59 (notably dividends of 0.30), propping up ordinary income, but this source is inherently less controllable than operating earnings. EBITDA was 2.11 (EBITDA margin 4.3%), indicating limited depreciation drag and suggesting the cost base improvements were mostly within SG&A/operating costs rather than asset intensity changes. The largest change driver versus last year appears to be operating leverage (operating income +29.1%), but it did not fully flow to net due to taxes and possibly smaller non-operating tailwinds. Given the reliance on investment income and the variability of such returns, the uplift in ordinary income may not be fully repeatable. Watch for SG&A growth relative to revenue; with SG&A at 1.79 and revenue at 48.82, the SG&A ratio is roughly 3.7%, but lack of YoY revenue disclosure prevents confirming whether SG&A grew faster than sales. Overall, to sustainably raise ROE, the company needs higher recurring operating margins and/or better asset utilization while maintaining conservative leverage.

Growth Assessment

Revenue sustainability cannot be assessed YoY due to missing prior-period sales; however, operating income growth (+29.1% YoY) indicates improved operating execution. Ordinary income growth (+26.7% YoY) was aided by non-operating income (dividends 0.30), which may not be structurally repeatable. Net income declined 6.2% YoY despite stronger operating profits, implying headwinds from taxes and potentially less favorable non-operating items vs. the prior year. EBITDA margin at 4.3% remains thin, typical for logistics/transport services, suggesting growth must come from volume, mix, or pricing rather than cost cuts alone. With negligible capex (-0.01), near-term capacity-driven growth appears limited; expansion may rely on asset-light initiatives or network optimization. Investment securities are sizable (16.69), creating optionality for dividend income but adding market valuation risk. Near-term outlook hinges on sustaining operating efficiency, stabilizing dividend income from holdings, and improving cash conversion to support reinvestment and shareholder returns.

Financial Health

Liquidity is strong: current ratio 224.1% and quick ratio 224.1%, with cash of 13.17 nearly covering current liabilities of 12.22. No warning on current ratio (<1.0) or high leverage (D/E > 2.0); D/E is 0.53x, and the calculated equity ratio is approximately 64.7% (equity 36.97 / assets 57.17). Long-term loans total 3.84 and noncurrent liabilities are 7.41, indicating a modest long-term funding profile. Maturity mismatch risk appears low given ample cash and current assets (27.38) relative to current liabilities (12.22). Interest coverage is very strong at 64.4x, suggesting minimal refinancing stress even if rates rise. No off-balance sheet obligations were disclosed; absence of data does not preclude lease or guarantee commitments, but none are visible in the provided set.

Cash Flow Quality

OCF/Net Income is 0.74x (<0.8), signaling softer earnings quality this period, likely due to working capital outflows or timing differences. With capex of only -0.01, maintenance investment needs look light, but total investing cash flows were unreported, preventing a robust free cash flow assessment. Financing cash flow was -2.84, driven by share repurchases of -1.22; dividend cash outflow is unreported, creating uncertainty in aggregate cash commitments. Given net income of 1.75 and OCF of 1.29, internal cash generation fell short of earnings, so repeated buybacks/dividends at current levels could tighten liquidity unless OCF improves. No clear signs of working capital manipulation can be identified due to missing details on receivables, payables, and inventory; nevertheless, the OCF gap merits monitoring in subsequent quarters.

Dividend Sustainability

The calculated payout ratio is 46.3%, which would imply dividends of roughly 0.81 if applied to net income of 1.75; however, actual dividends paid were unreported. FCF coverage cannot be confirmed due to missing investing cash flows, though minimal capex (-0.01) suggests limited maintenance demands. Liquidity is ample and leverage conservative, providing capacity to sustain dividends in the near term, conditional on stabilizing OCF above net income. Share repurchases of -1.22 consumed significant cash this period; combined with dividends, total shareholder returns could exceed internally generated cash if OCF remains below earnings. Policy outlook likely emphasizes stable dividends with opportunistic buybacks, but sustainability hinges on improving cash conversion and maintaining ordinary income without overreliance on non-operating sources.

Risk Assessment

Business Risks:

• Profit composition reliance on non-operating income (dividends 0.30; non-operating income ratio 33.6%)
• Thin operating margin (~4.0%) typical of logistics, sensitive to fuel, labor, and pricing dynamics
• Potential volume/mix volatility in transport demand amid macro uncertainty
• Limited disclosed growth capex may constrain capacity-driven growth
• Dependence on key customers or routes (not disclosed) could concentrate revenue

Financial Risks:

• OCF below net income (0.74x) suggests cash conversion risk
• Market valuation risk on investment securities (16.69) affecting equity and comprehensive income
• Share repurchases (-1.22) reduce cash buffer if OCF remains soft
• Interest rate risk modest but present on 3.84 long-term loans and any variable-rate debt
• Tax rate variability (effective rate 32.7%) can pressure net earnings

Key Concerns:

• ROIC at 4.7% below the 5% warning threshold signals subpar capital efficiency
• Net income decline (-6.2% YoY) despite strong operating profit growth highlights below-the-line headwinds
• Data gaps (revenue YoY, gross profit, working capital details) limit clarity on margin durability and cash drivers

Investment Implications

Key Takeaways:

• Core operations strengthened (operating income +29.1% YoY) with operating margin around 4.0%
• Bottom line contracted (-6.2% YoY) due to taxes and lower cash conversion
• Non-operating income remains a meaningful profit pillar; stability of dividend income is pivotal
• Balance sheet conservative (equity ratio ~64.7%, D/E 0.53x) enabling flexibility
• ROE and ROIC at 4.7% indicate room for structural profitability and capital efficiency gains

Metrics to Watch:

• OCF/Net Income trajectory and working capital movements
• Operating and net margin progression (bps) once prior-period revenue is available
• Size and stability of dividend income from investment securities
• Capex plans versus growth pipeline and asset utilization (asset turnover)
• Shareholder return cadence (dividends + buybacks) versus internally generated cash

Relative Positioning: Versus small-cap logistics peers, the company exhibits stronger liquidity and low leverage but lags on capital efficiency (ROIC ~4.7%). Profit composition shows higher-than-ideal reliance on non-operating income, making earnings quality more volatile than peers focused on pure operating profit. Sustained improvement in cash conversion and margin expansion would be needed to close the ROE/ROIC gap.

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