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

Daiun Co., Ltd. (9363) reported FY2026 Q2 standalone results showing stable top line and notable operating leverage. Revenue was ¥4,881.8m, essentially flat YoY, while operating income rose 29.1% to ¥194.0m, indicating effective cost control and/or mix improvement. Ordinary income reached ¥254.0m, exceeding operating income on net non-operating gains and modest interest burden. Net income decreased 6.2% YoY to ¥175.0m despite stronger operations, implying adverse below-the-line effects versus the prior year (e.g., absence of one-off gains, higher taxes, or other special items). The net margin stood at 3.58%, and EBITDA was ¥211.0m for a 4.3% margin. DuPont analysis indicates ROE of 4.73%, driven by a 3.58% net margin, 0.854x asset turnover, and 1.55x financial leverage. Liquidity looks strong with a current ratio of 224% and working capital of ¥1,516.1m. Leverage is modest with a debt-to-equity ratio around 0.53x and interest coverage at a very comfortable 64x, reflecting low financial risk. Operating cash flow was ¥129.2m (OCF/NI ≈ 0.74), signaling some working capital absorption or timing effects versus earnings. Financing cash flow was an outflow of ¥284.2m, likely debt repayment or equity-related cash out, as dividends and treasury share data are not disclosed in the period figures provided. Several disclosures (e.g., cost of sales/gross profit, inventories, cash balance, equity ratio field, investing cash flows, dividend, shares outstanding) are shown as zero and should be treated as unreported, not true zeros. Based on non-zero balance sheet items, the implied equity ratio is approximately 64.6% (equity/assets), denoting a conservative capital structure. With revenue flat but operating income up, the period highlights margin execution over volume growth. The tax expense of ¥90.9m implies an effective tax rate near 35–36% on ordinary income, despite the reported “0%” field, reinforcing that some fields are unreported. Overall, Daiun’s fundamentals this half show resilient profitability, strong solvency, and cautious cash conversion, with the outlook hinging on demand in port logistics and the normalization of non-operating and tax items.

Profitability Analysis

ROE (4.73%) decomposes into a 3.58% net margin, 0.854x asset turnover, and 1.55x leverage. Operating margin was approximately 4.0% (¥194.0m OI on ¥4,881.8m revenue), up YoY given OI growth despite flat sales, evidencing positive operating leverage. The EBITDA margin of 4.3% is modest, consistent with asset-intensive, low-margin logistics/stevedoring models. Ordinary income margin of ~5.2% (¥254.0m/¥4,881.8m) benefited from net non-operating items and minimal interest expense (¥3.0m). Net income margin at 3.58% declined YoY as bottom-line headwinds outweighed operating improvements. The implied effective tax rate based on taxes/ordinary income is ~35.8%, suggesting tax normalization from possibly lower prior-year taxes or prior one-off gains. With depreciation at ¥17.0m, D&A intensity appears low for the half, although lack of capex disclosure limits interpretation of longer-term asset replacement requirements. Overall margin quality improved at the operating level; sustainability will depend on maintaining utilization, mix, and cost discipline in a flat-demand environment.

Growth Assessment

Top-line growth was flat (+0.0% YoY), indicating stable cargo volumes or pricing in core operations. The 29.1% YoY increase in operating income points to strong cost control and improved efficiency rather than volume-led growth. Net income declined 6.2% YoY despite better operations, implying a tougher comparison below the operating line (e.g., fewer non-operating gains or higher taxes). Given the asset turnover of 0.854x, the business continues to utilize assets reasonably efficiently for the sector. Profit quality at the operating level improved; however, the divergence between OI and NI suggests some transitory non-operating/tax effects that may normalize. With OCF/NI at 0.74, cash conversion lagged earnings, likely due to working capital timing; the persistence of this gap is a watch item. Near-term outlook depends on port throughput, industrial production trends (steel/auto/chemicals), and labor availability. In the absence of disclosed order visibility or backlog metrics, revenue sustainability is assumed to mirror macro trade flows and customer activity. Maintaining operating margin gains will be key if revenue remains flat.

Financial Health

Total assets were ¥5,717.0m, liabilities ¥1,963.3m, and equity ¥3,697.0m, implying an equity ratio around 64.6% (computed from non-zero items), despite the reported equity ratio field being unreported. Current assets were ¥2,738.0m versus current liabilities of ¥1,222.0m, yielding a current ratio of 224% and strong liquidity. Working capital of ¥1,516.1m provides a meaningful buffer against operational variability. Debt-to-equity of 0.53x indicates a conservative balance sheet, and an interest coverage ratio of 64.4x underscores low interest burden and strong debt service capacity. Cash and equivalents were not disclosed; thus, quick liquidity cannot be precisely assessed, but the 1:1 equivalence of current and quick ratios in the provided metrics suggests inventories were not disclosed. Overall solvency is strong, with ample equity and limited financial risk.

Cash Flow Quality

Operating cash flow was ¥129.2m versus net income of ¥175.0m (OCF/NI ≈ 0.74), indicating under-conversion this half, likely from working capital build or timing of collections/payables. Depreciation was ¥17.0m, modest relative to EBITDA of ¥211.0m, but capex data are not disclosed (investing CF shown as zero/unreported), preventing a clear free cash flow assessment. The reported free cash flow figure of zero should be treated as not available; true FCF cannot be derived without capex. Financing cash flow was an outflow of ¥284.2m, likely debt repayment or equity-related cash outflows, as dividends/treasury share data are unreported. Absent cash balance disclosure, period-end liquidity from cash cannot be gauged. Overall, earnings quality is acceptable but not fully corroborated by cash flows this half, and working capital dynamics bear monitoring.

Dividend Sustainability

Dividend per share and payout ratio fields are shown as zero and should be treated as unreported for the period; thus, we cannot infer current dividend policy or payments from this dataset. With NI at ¥175.0m and strong solvency, there appears capacity for distributions in general, but without capex and cash data, free cash flow coverage cannot be assessed. Financing outflows suggest capital allocation activity, but the nature (debt repayment vs. distributions) is not specified. Historically for similar companies, stable or progressive dividends are common, but any view here would be speculative without disclosure. Monitor management guidance, full-year payout policy, and capex plans before judging sustainability.

Risk Assessment

Business Risks:

• Cyclical cargo volumes tied to industrial production and trade flows
• Customer concentration risk in key verticals (e.g., steel, automotive, chemicals)
• Labor availability and wage inflation in port/warehouse operations
• Operational disruptions from accidents, weather, or natural disasters
• Regulatory and safety compliance costs in port logistics
• Equipment reliability and potential need for replacement capex
• Competitive pricing pressure in low-margin logistics services

Financial Risks:

• Working capital swings affecting cash conversion (OCF/NI at 0.74)
• Limited disclosure on cash and investing CF, creating visibility gaps on FCF
• Interest rate risk modest but present, despite strong coverage
• Potential tax rate normalization variability affecting net income
• Exposure to non-operating gains/losses affecting ordinary income

Key Concerns:

• Flat revenue suggests reliance on margin execution rather than volume growth
• Under-conversion of earnings to cash in the half
• Unreported items (cash, inventories, capex, dividends, shares) constrain analysis of liquidity, capex cycle, and shareholder returns

Investment Implications

Key Takeaways:

• Operating leverage evident: OI +29% on flat sales, driving margin expansion
• ROE 4.73% supported by solid asset turnover and low leverage
• Balance sheet conservative with implied equity ratio ~65% and D/E ~0.53x
• Cash conversion softer (OCF/NI ~0.74); working capital a watch point
• Ordinary income above OI; bottom-line down YoY likely on non-operating/tax effects
• Disclosure gaps limit visibility on capex, cash, and distributions

Metrics to Watch:

• Operating margin and EBITDA margin sustainability
• OCF/NI ratio and changes in receivables/payables
• Capex and investing cash flows to gauge maintenance vs. growth spend
• Ordinary income components (non-operating gains/losses) and effective tax rate
• Leverage and interest coverage as rates evolve
• Management guidance on dividend policy and capital allocation

Relative Positioning: Within Japanese small-cap logistics/port services, Daiun appears conservatively capitalized with improving operating efficiency but typical low margin structure; earnings resilience will hinge on maintaining cost discipline amid macro-sensitive volumes.

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