Quick View
| Metric | Current Period | Same Period of Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥74.92B | ¥72.70B | +3.1% |
| Operating Income | ¥8.71B | ¥9.62B | −9.5% |
| Ordinary Income | ¥10.36B | ¥11.17B | −7.3% |
| Net Income | ¥7.17B | ¥8.00B | −10.4% |
| ROE | 1.8% | 2.0% | - |
Executive Summary
Kamigumi’s Q1 of the fiscal year ending March 2027 recorded higher revenue but lower profit due to deteriorating profitability. Revenue increased to ¥74.92B (+3.1% YoY), while Operating Income declined to ¥8.71B (-9.5%), Ordinary Income to ¥10.36B (-7.3%), and Net Income to ¥7.17B (-10.4%; Net Income attributable to owners of the parent was ¥7.11B, down 10.8% YoY). The primary factor was a year-on-year decline of approximately 1.6pt in the Operating Income margin due to cost inflation and a higher SG&A ratio. At the ordinary-income level, non-operating income, including dividend income and interest income, partially mitigated the decline in profit.
Factors Affecting Performance
【Revenue】Revenue was ¥74.92B, an increase of +3.1% YoY. The core Distribution Business, at ¥67.09B (+3.5% YoY), accounted for approximately 89% of total revenue and drove growth, while Other Businesses remained at ¥7.83B.
【Profit and Loss】Operating Income declined to ¥8.71B (-9.5% YoY), Ordinary Income to ¥10.36B (-7.3%), and Net Income to ¥7.17B (-10.4%). The Operating Income margin declined to 11.6% from 13.2% in the previous year, a decrease of approximately 1.6pt. SG&A expenses increased by +13.3% to ¥6.61B from ¥5.83B in the previous year, outpacing revenue growth and resulting in negative operating leverage. At the ordinary-income level, non-operating income of ¥1.96B, including dividend income of ¥1.10B and interest income of ¥0.16B, provided support, narrowing the decline in Ordinary Income relative to Operating Income. Extraordinary items were limited, with extraordinary income of ¥0.02B and extraordinary losses of ¥0.03B, indicating a limited impact from temporary factors. In conclusion, the results represent higher revenue but lower profit.
Segment Analysis
The business is effectively centered on Distribution. While revenue increased to ¥67.09B (+3.5% YoY), Operating Income declined to ¥7.57B (-10.7%), and the profit margin decreased to 11.3% from 13.1% in the previous year. Other Businesses generated revenue of ¥7.83B and Operating Income of ¥1.13B, making only a limited contribution to company-wide profit. Given the high degree of business concentration, improvement in the profitability of the Distribution Business is directly linked to the recovery of overall corporate profitability.
Key Financial Indicators
【Profitability】The Operating Income margin was 11.6%, down approximately 1.6pt from 13.2% in the previous year, while the Net Income margin also narrowed to 9.6% from 11.0%. 【Cash Quality】Inventories were small at ¥1.19B, indicating a business model with a light working-capital burden. Dividend income of ¥1.10B and interest income of ¥0.16B have also been steadily recorded as non-operating income. 【Investment Efficiency】ROE was 1.8%. Based on a DuPont decomposition into a Net Income margin of 9.6%, total asset turnover of 0.14x, and financial leverage of 1.32x, the decline in profitability is analyzed as the primary factor behind the low ROE. 【Financial Soundness】The Equity Ratio was extremely high at 75.6%. With cash and deposits of ¥62.43B against current liabilities of ¥50.95B, the company has substantial short-term liquidity.
Cash Flow Analysis
Although the cash flow statement has not been separately disclosed, the movement of funds can be inferred from changes in the balance sheet. Cash and deposits were ¥62.43B, a decrease of ¥13.85B from ¥76.28B in the previous year, while short-term securities also contracted significantly to ¥2.56B. Meanwhile, property, plant and equipment increased to ¥238.35B from ¥225.40B in the previous year, suggesting that progress in capital investment was one factor behind the reduction in cash. Current liabilities declined to ¥50.95B, partly due to a decrease in long-term borrowings due within one year, reducing the short-term repayment burden. In addition to its business structure, characterized by small inventories of ¥1.19B and strong cash-generation capacity, the company’s substantial capital base, reflected in an Equity Ratio of 75.6%, supports the balance between investment and liquidity management.
Quality of Earnings
As part of the recurring earnings base, in addition to Operating Income from the core business, non-operating income such as dividend income of ¥1.10B and interest income of ¥0.16B accounted for approximately 2.6% of revenue and supported Ordinary Income. Dependence on non-operating income is not excessive, and earnings cannot be characterized as being heavily skewed toward non-core sources. Extraordinary items were limited, consisting of extraordinary income of ¥0.02B and extraordinary losses of ¥0.03B, indicating a limited impact from temporary factors on earnings fluctuations during the period. The difference between Ordinary Income of ¥10.36B and Net Income of ¥7.17B was primarily attributable to income taxes of ¥3.17B, with the effective tax burden remaining broadly within a reasonable range. Comprehensive Income was ¥5.39B, below Net Income of ¥7.17B. The primary reason for the difference was a ¥2.13B decline in valuation difference on securities, meaning that market-price fluctuations exerted downward pressure on Comprehensive Income.
Earnings Forecast and Guidance
Progress against the full-year plan was 24.6% for revenue, 25.4% for Operating Income, 27.6% for Ordinary Income, and 26.0% for Net Income attributable to owners of the parent, calculated as ¥7.11B ÷ ¥27.34B. All figures were therefore tracking around the simple 25% progress level. The relatively high progress rate for Ordinary Income appears to reflect the contribution of non-operating income, such as dividend income, which tends to be concentrated near the beginning of the fiscal year. There were no revisions to the earnings forecast or dividend forecast, and management maintained its initial plan.
Shareholder Returns
The full-year dividend forecast announced by the company is ¥205 per share. Using the full-year forecast EPS of ¥276.94, the Payout Ratio is approximately 74.0%, above the generally accepted guideline of approximately 60%. No share repurchases have been disclosed, and the Payout Ratio in this report is based solely on dividends. The company’s substantial financial foundation, including an Equity Ratio of 75.6% and cash and deposits of ¥62.43B, is viewed as supporting the sustainability of this dividend level.
Risk Factors
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Profitability Decline Risk: SG&A expenses increased +13.3% YoY, exceeding the revenue growth rate of +3.1%, causing the Operating Income margin to contract to 11.6% from 13.2% in the previous year. The ability to absorb cost increases will be a key focus going forward.
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Capital Efficiency Challenge: ROE was 1.8%. The DuPont decomposition consists of a Net Income margin of 9.6% × total asset turnover of 0.14x × leverage of 1.32x, indicating that the level of earnings generation relative to the asset base is comparatively low.
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Securities Valuation Risk: The company holds investment securities of ¥120.82B, and the valuation difference on securities decreased by ¥2.13B during the period (OCI), weighing on Comprehensive Income. The company has a structure in which fluctuations in market prices affect shareholders’ equity.
Industry Benchmark (For Reference; Company Analysis)
Industry Benchmark (transport)
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Income Margin | 11.6% | 7.1% (4.3%–8.6%) | +4.5pt |
| Net Income Margin | 9.6% | 5.9% (2.8%–8.5%) | +3.7pt |
Both metrics exceed the industry median, indicating a high level of profitability relative to peers.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 3.1% | 3.3% (0.2%–7.6%) | −0.2pt |
The revenue growth rate is broadly in line with the industry median, and no particular advantage in growth pace is apparent.
※Source: Company analysis
Key Points in the Financial Results
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Despite higher revenue, the Operating Income margin declined approximately 1.6pt YoY, while the SG&A growth rate (+13.3%) exceeded the revenue growth rate (+3.1%), resulting in negative operating leverage. This is an important point in assessing the company’s ability to absorb costs.
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Ordinary Income was partially supported by non-operating income, including dividend income and interest income, and progress against the full-year plan was somewhat ahead at the ordinary-income level. The trajectory of core-business margin recovery will determine the reliability of future progress.
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Although financial soundness, including an Equity Ratio of 75.6% and ample liquidity, is among the stronger levels within the industry, ROE was only 1.8%, leaving capital efficiency relative to profitability as an area requiring observation.
Theoretical Stock Price (Reference Value)
| Scenario | Theoretical Stock Price |
|---|---|
| bear (bearish) | ¥3,724 |
| base (base case) | ¥3,769 |
| bull (bullish) | ¥3,816 |
| Calculation Assumption | Value |
|---|---|
| Book Value Per Share (BPS) | ¥3,970 |
| Adjusted Forecast EPS | ¥293.4 |
| Cost of Equity r | 9.27% (10-year Japanese government bond 2.77% + equity risk premium 6.00% + size premium 0.50%) |
| Persistence Factor of Residual Income ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 74.0% |
| Forecast EPS Confidence Adjustment | ×1.060 (based on the historical guidance achievement rate of companies in the same industry) |
| Implied PBR / PER | 0.95x / 12.8x |
Sensitivity: ¥3,668–¥3,873 at ±1% for the cost of equity, and ¥3,762–¥3,773 at ±0.1 for ω.
Notes:
- Because forecast ROE is below the cost of equity, the theoretical value is below book value per share.
- Net assets as of the quarter-end are used; there is a timing gap relative to the full-year forecast.
- Because net assets include non-controlling interests, the theoretical value may be calculated somewhat higher.
(Calculation model: Residual Income Model (Ohlson-type, explicit 5-year fade) / Interest-rate reference month: 2026-07 / Mechanically calculated solely from publicly disclosed data; this is not a forecast of the market stock price or a recommendation of any specific investment action, and does not forecast or guarantee the future stock price.)
This report is an automatically generated earnings analysis document produced by AI analysis of XBRL earnings summary data. It does not recommend investment in any specific security. Industry benchmarks are reference information compiled by the company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, after consulting a professional as necessary.
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AI Financial Analysis
Executive Summary
Kamigumi delivered a mixed FY2027 Q1 result: revenue grew, but operating and net profit declined as cost growth outpaced sales. Consolidated revenue increased 3.1% YoY to ¥74.9bn. Operating income declined 9.5% to ¥8.7bn. Ordinary income fell 7.3% to ¥10.4bn. Profit attributable to owners declined 10.8% to ¥7.1bn. The operating margin compressed by 160bp YoY to 11.6% from 13.2%. The net profit margin narrowed by 149bp to 9.5% from 11.0%. Operating costs rose 4.1% YoY to ¥59.6bn, exceeding revenue growth. SG&A expenses increased 13.2% YoY to ¥6.6bn, while gross profit declined 0.9% to ¥15.3bn. The logistics business remained the core business, accounting for 86.1% of external revenue and 87.0% of segment profit, but its profit fell 10.7%. Other businesses maintained a structurally higher segment margin than logistics, although revenue and profit were broadly flat. Non-operating income of ¥2.0bn supported ordinary earnings, led by ¥1.1bn of dividend income. This investment-income contribution represented 10.7% of ordinary income and partly mitigated the decline in operating profit. The balance sheet remains highly resilient, with a 240.5% current ratio, 0.32x debt-to-equity ratio, and 75.1% capital adequacy ratio. Full-year revenue guidance implies a normal Q1 progress rate of 24.6%, while operating-income progress of 25.4% is slightly ahead of the seasonal 25% reference. Management has not revised either earnings or dividend guidance. The central issue for subsequent quarters is whether logistics pricing, volumes, and cost discipline can restore the logistics segment margin while the company continues to benefit from investment dividend income.
Profitability Analysis
Annualized ROE is 7.3%, below the 8% benchmark for a satisfactory return profile. The annualized DuPont decomposition is net profit margin of 9.5% × asset turnover of 0.578x × financial leverage of 1.32x. The principal negative change was margin compression: the net margin declined 149bp YoY and the operating margin declined 160bp. This was driven by operating costs growing 4.1% and SG&A rising 13.2%, versus only 3.1% revenue growth. Gross profit declined 0.9% despite higher revenue, indicating that the issue originated in cost of services rather than solely in overhead absorption. The annualized asset turnover of 0.578x supports ROE and reflects a relatively efficient use of a large logistics asset base. Financial leverage of 1.32x is conservative and does not amplify either returns or financial risk materially. The five-factor result shows a 68.8% tax burden, consistent with a 30.7% effective tax rate. Interest burden is 1.187x because non-operating income exceeds interest expense; interest expense of ¥0.2bn is very low relative to EBIT of ¥8.7bn. Interest coverage is therefore extremely strong at 50.65x. Operating income represents the main earnings base, but dividend income of ¥1.1bn was also material, equal to 12.7% of operating income. The sustainability of the Q1 margin decline will depend primarily on the pace of cost recovery in logistics operations and restraint in SG&A growth.
Growth Assessment
Revenue growth was modest but positive at 3.1% YoY, with logistics revenue increasing 3.5% to ¥67.1bn. The logistics segment generated ¥7.6bn of profit, down 10.7% YoY, and its segment margin contracted 178bp to 11.3%. This indicates that incremental logistics sales were earned at materially lower profitability than in the prior-year quarter. Other-business revenue decreased 0.3% to ¥7.8bn and segment profit declined 0.4% to ¥1.1bn. However, the other-business segment margin remained stable at 14.4%, above the logistics margin, providing some diversification of earnings quality. Group operating-income progress against full-year guidance was 25.4%, 0.4 percentage points above the standard Q1 progress rate. Revenue progress was 24.6%, only 0.4 percentage points below the standard Q1 level. Ordinary-income progress was 27.6% and owner-attributable profit progress was 26.0%, both ahead of the standard Q1 reference, supported by non-operating income. The full-year plan calls for revenue of ¥305.0bn, operating income of ¥34.3bn, ordinary income of ¥37.5bn, and owner-attributable profit of ¥27.3bn. The guidance implies full-year operating income declining 6.1% YoY, so the forecast already incorporates a less favorable profit environment. No forecast revision was announced, which indicates management considers Q1 broadly consistent with its plan. Revenue sustainability remains linked to cargo volumes, port-related activity, warehousing demand, and the ability to pass labor, fuel, and subcontracting costs through to customers.
Financial Health
Financial health is strong. Current assets of ¥122.5bn exceeded current liabilities of ¥51.0bn, resulting in working capital of ¥71.6bn. The current ratio was 240.5% and the quick ratio was 238.1%, indicating ample short-term liquidity without reliance on inventory liquidation. Cash and deposits totaled ¥62.4bn, equivalent to 122.5% of current liabilities. Inventories were only ¥1.2bn, or 0.2% of total assets, which is appropriate for a logistics-oriented business model. Total liabilities were ¥126.6bn, only 24.4% of total assets. Interest-bearing debt was ¥50.4bn and debt-to-equity was a conservative 0.32x. Debt-to-capital was 11.4%, materially below the 40% investment-grade benchmark. Long-term loans were broadly stable YoY at ¥50.4bn, while the current portion of long-term loans declined by ¥10.0bn to ¥10.2bn. This reduction, together with the high liquidity ratios, limits maturity-mismatch risk. Total equity was ¥392.0bn, representing 75.6% of total assets, although it declined 1.5% YoY. The decline in equity was accompanied by a 3.7% reduction in total assets, maintaining a very strong capitalization profile. Net defined-benefit liability was ¥15.5bn, equivalent to 4.0% of total equity and a manageable long-term obligation. Investment securities of ¥120.8bn represented 23.3% of total assets, creating meaningful exposure to equity-market valuation movements even though balance-sheet leverage is low.
Notable B/S Changes
Cash and deposits: -¥13.8bn (-18.2%) YoY to ¥62.4bn — liquidity remains strong, but the decline should be monitored alongside capital investment and shareholder returns. Current assets: -¥27.0bn (-18.1%) YoY to ¥122.5bn — primarily reflects lower cash and short-term investment securities, while the current ratio improved due to a larger decline in current liabilities. Current liabilities: -¥12.7bn (-20.0%) YoY to ¥51.0bn — includes a ¥10.0bn reduction in the current portion of long-term loans, improving near-term refinancing and maturity risk. Property, plant and equipment: +¥12.9bn (+5.7%) YoY to ¥238.4bn — continued investment in physical logistics infrastructure raises the importance of asset utilization and return on invested capital. Land: +¥6.7bn (+6.7%) YoY to ¥106.2bn — indicates a larger commitment to long-duration logistics real-estate assets. Investment securities: -¥8.3bn (-6.4%) YoY to ¥120.8bn — remains a substantial 23.3% of total assets, with market valuation movements affecting comprehensive income. Total liabilities: -¥14.0bn (-9.9%) YoY to ¥126.6bn — reinforces the company’s conservative solvency profile. Total equity: -¥5.9bn (-1.5%) YoY to ¥392.0bn — the decrease occurred alongside negative other comprehensive income, particularly securities valuation effects.
Cash Flow Quality
Dividend Sustainability
The full-year dividend forecast is ¥205 per share, compared with forecast EPS of ¥276.94. This implies a forecast dividend payout ratio of 74.0%. The payout ratio is above the 60% conservative benchmark but remains below 100%, indicating that the planned dividend is covered by forecast accounting earnings. The company’s substantial equity base, low debt-to-equity ratio of 0.32x, strong interest coverage of 50.65x, and large cash balance of ¥62.4bn support financial flexibility for shareholder distributions. Retained earnings totaled ¥327.0bn, providing a large accumulated capital buffer. The absence of a dividend forecast revision indicates that management continues to support the ¥205 per-share plan despite the Q1 profit decline. Dividend sustainability is nevertheless dependent on delivery of the full-year owner-attributable profit target of ¥27.3bn and preservation of logistics profitability. The payout ratio should be monitored alongside capital requirements for logistics facilities, land, buildings, and fleet-related infrastructure.
Risk Assessment
Business risks include Logistics margin risk: the core logistics segment’s revenue rose 3.5% YoY but segment profit fell 10.7%, reducing its margin to 11.3% from 13.1%. This points to cost inflation, weaker pricing, unfavorable cargo mix, or lower operating efficiency., Transportation-cycle risk: logistics demand is sensitive to industrial production, trade volumes, port activity, warehousing demand, and customer inventory cycles., Fuel, energy, labor, and subcontracting-cost risk: these are important operating inputs for transport and logistics providers; incomplete pass-through would place further pressure on margins., Competitive pricing risk: a fragmented logistics market can constrain the company’s ability to recover higher operating costs through customer pricing., Investment-income volatility: dividend income of ¥1.1bn and equity-method earnings of ¥0.5bn contribute to non-operating profitability and may vary with investee performance and distribution policies., Market-value risk on strategic investments: investment securities of ¥120.8bn represent 23.3% of total assets, leaving comprehensive income and net assets exposed to market-price movements..
Financial risks include Comprehensive income fell 37.8% YoY to ¥5.4bn, more sharply than owner-attributable profit, reflecting negative other comprehensive income including a ¥2.1bn negative valuation difference on securities., Cash and deposits declined 18.2% YoY to ¥62.4bn, although liquidity remains ample., Net defined-benefit liability of ¥15.5bn creates exposure to discount-rate, asset-return, and demographic assumption changes., The planned 74.0% dividend payout ratio leaves a narrower earnings retention buffer than a sub-60% payout policy, particularly if logistics margins remain under pressure..
Key concerns include Highest priority: restoration of core logistics profitability, given that logistics supplies 87.0% of segment profit., High priority: whether SG&A growth of 13.2% can be normalized relative to revenue growth., Medium priority: sensitivity of reported comprehensive income and equity to securities valuation changes., Medium priority: maintaining full-year profit guidance without increased dependence on non-operating dividend income..
Investment Implications
Key takeaways include Q1 sales growth was positive, but earnings declined because costs grew faster than revenue., The 160bp operating-margin decline and 178bp logistics-segment-margin decline are the most important operating developments., Q1 operating-income progress of 25.4% is broadly on plan against the full-year forecast., The company has a conservative capital structure, strong liquidity, and exceptionally high interest-servicing capacity., Strategic investment holdings provide dividend income but also expose comprehensive income and equity to market valuation fluctuations., Goodwill is modest relative to equity and assets, limiting balance-sheet dependence on acquisition value retention..
Metrics to watch include Logistics segment revenue growth and segment margin, Operating cost growth relative to revenue growth, SG&A expense growth and operating leverage, Operating-income progress versus the ¥34.3bn full-year forecast, Dividend income and equity-method earnings contribution to ordinary income, Cash and deposits, current portion of long-term loans, and debt-to-equity ratio, Valuation difference on investment securities and total comprehensive income, Dividend payout ratio versus forecast EPS.
Regarding relative positioning, Kamigumi exhibits a stronger-than-typical balance-sheet profile for a capital-intensive logistics operator, with 75.1% capital adequacy, 240.5% current ratio, 0.32x debt-to-equity, and 50.65x interest coverage. Its 11.6% operating margin remains within the good 8–15% benchmark range, but annualized ROE of 7.3% is below the 8% threshold and reflects a capital-rich structure combined with recent margin pressure. Goodwill is low at 2.8% of equity and 2.1% of assets, indicating limited M&A-related impairment exposure relative to more acquisition-intensive peers.