Bunkeido Co., Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥8.34B
• Operating Income: ¥1.78B
• Net Income: ¥1.26B
• EPS: ¥199.97

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

Bunkeido (94710) delivered stable FY2026 Q2 results with revenue of ¥8.342bn, essentially flat year on year (-0.1%), while operating income rose 1.9% to ¥1.784bn, indicating modest operating leverage despite top-line stagnation. Gross profit of ¥3.886bn translates to a robust gross margin of 46.6%, underscoring strong pricing and cost control in core publishing/educational materials. Ordinary income of ¥1.821bn exceeded operating income by about ¥37m, suggesting small net non-operating gains that more than offset the minimal interest expense of ¥0.682m. Net income rose 0.6% to ¥1.269bn, with an implied effective tax rate of roughly 30.4% (¥554m tax vs. approximately ¥1.823bn pre-tax), notwithstanding the “0.0%” effective tax rate shown in the provided calculated metrics (which appears to be a placeholder). DuPont analysis shows a net margin of 15.21%, asset turnover of 0.414x, and financial leverage of 1.23x, yielding an ROE of 7.75%, a moderate level given the company’s very strong equity base. The balance sheet is conservative: total assets are ¥20.173bn against total liabilities of ¥4.825bn, implying an equity-to-asset ratio around 81.2% despite the reported equity ratio field showing 0.0% (unreported). Liquidity is ample with a current ratio of 331% and quick ratio of 243%, supported by ¥9.41bn of working capital and inventories of ¥3.61bn. Cash conversion was soft in the half: operating cash flow was ¥461m, only 36% of net income, likely reflecting seasonal working capital build typical in educational publishing and/or timing of collections. EBITDA of ¥1.885bn equates to a 22.6% margin, consistent with a high gross margin business model and controlled overheads. Interest coverage is extraordinarily high at ~2,616x, reflecting negligible debt burden and limited financing risk. Investing and cash balances are shown as zero in the dataset, which should be interpreted as undisclosed rather than actual zeros; accordingly, free cash flow cannot be fully assessed from the provided figures. Financing cash outflows of ¥352m indicate capital allocation (debt repayment and/or shareholder returns), but dividend fields show zero and are likely undisclosed for this period. Revenue stability alongside operating income growth suggests some cost efficiency or mix benefits, but sustaining profit growth without top-line expansion will require continued productivity and margin discipline. Overall, Bunkeido exhibits high margin resilience, low financial risk, and moderate ROE driven primarily by strong margins rather than leverage or asset intensity, with the main area to monitor being cash flow conversion and working capital dynamics.

Profitability Analysis

ROE of 7.75% decomposes into a 15.21% net margin, 0.414x asset turnover, and 1.23x financial leverage, indicating that returns are margin-led rather than leverage-driven. The gross margin of 46.6% is strong for the sector, and the EBITDA margin of 22.6% points to disciplined SG&A management and scale efficiencies. Operating income grew 1.9% despite a 0.1% revenue decline, implying modest positive operating leverage via mix/efficiency gains. Ordinary income exceeding operating income by ~¥37m, coupled with minimal interest expense (¥0.682m), suggests small non-operating gains (e.g., financial income or other income). The implied effective tax rate is approximately 30.4% (¥553.971m tax on ~¥1.823bn pre-tax), indicating a normal tax burden under JGAAP; the 0.0% shown in calculated metrics is not reflective of actual taxes. Interest coverage is exceptionally high at ~2,616x, emphasizing that earnings are not burdened by financing costs. Overall, profitability quality is sound, with stable margins and slight leverage in operating profit despite flat sales. Key watchpoints: sustaining gross margin at ~46–47% amid input cost volatility, and preserving SG&A discipline to maintain the >22% EBITDA margin.

Growth Assessment

Revenue was stable at ¥8.342bn (-0.1% YoY), while operating income rose 1.9% to ¥1.784bn and net income increased 0.6% to ¥1.269bn, signaling incremental efficiency gains. With asset turnover at 0.414x, growth is not currently driven by higher asset utilization; rather, mix or cost improvements supported profit growth. The ordinary income uplift vs. operating income (~¥37m delta) is small, suggesting the core business drove most of the earnings. Given the educational publishing context, seasonality and curriculum cycles can create lumpy half-year comparisons; the current half shows resilience but not expansion. Profit quality shows a gap between accrual earnings and cash (OCF/NI 0.36), implying working capital headwinds that may normalize in later periods. Near-term outlook hinges on order timing, adoption cycles, and inventory management; maintaining flat-to-slight growth seems plausible absent additional disclosure on new adoptions or product launches. Without disclosed capex or strategic growth initiatives in the period, structural acceleration signals are limited in the data.

Financial Health

The balance sheet is strong: total assets ¥20.173bn, liabilities ¥4.825bn, and equity ~¥16.383bn imply an equity ratio around 81.2% (the reported 0.0% is an undisclosed placeholder). Liquidity is ample with current assets of ¥13.483bn vs. current liabilities of ¥4.070bn, delivering a current ratio of 331% and quick ratio of 243%. Working capital stands at ¥9.41bn, with inventories of ¥3.61bn indicating material seasonal stock but no immediate liquidity strain. Debt-to-equity is low at 0.29x (using total liabilities as a proxy for debt due to disclosure limits), and interest expense is negligible at ¥0.682m, underscoring low solvency risk. Interest coverage of ~2,616x further highlights minimal financial risk. Overall, the company has substantial balance sheet resilience, with capacity to absorb shocks and fund operations without reliance on external debt.

Cash Flow Quality

Operating cash flow was ¥461m against net income of ¥1.269bn (OCF/NI 0.36), indicating weak cash conversion in the half, likely due to working capital investment (e.g., inventory build or slower collections) common in seasonal businesses. Depreciation and amortization totaled ¥101m, consistent with an asset-light content-oriented model; EBITDA was ¥1.885bn versus OCF of ¥461m, highlighting that non-cash earnings did not translate to cash this period. Investing cash flow is shown as zero and should be treated as undisclosed; therefore, capex and true free cash flow cannot be determined. Using available figures only, free cash flow cannot be accurately calculated; the provided “FCF: 0” is an undisclosed placeholder rather than an actual value. Financing cash outflow of ¥352m likely reflects dividends and/or debt repayment, but without cash and financing detail breakdowns, attribution is uncertain. Key working capital focus areas: inventory of ¥3.609bn and receivables (not disclosed) that likely drove the OCF shortfall.

Dividend Sustainability

Dividend data (DPS 0.00, payout 0.0%, FCF coverage 0.00x) appear undisclosed placeholders rather than actual values for the period. EPS is ¥199.97 in the half, but without a disclosed DPS and with investing cash flows undisclosed, payout and FCF coverage cannot be reliably assessed. Financing CF outflow of ¥352m suggests some capital return and/or debt service, but cannot be conclusively tied to dividends. Balance sheet strength (implied equity ratio ~81% and low leverage) suggests capacity for distributions, but sustainability should be judged on full-year OCF and capex, which are not provided. Policy outlook cannot be inferred from the given data; investors should refer to company guidance or dividend policy statements when available.

Risk Assessment

Business Risks:

• Revenue concentration in domestic educational publishing and exposure to textbook adoption cycles and curriculum revisions
• Demographic headwinds in Japan (declining student population) limiting structural volume growth
• Seasonality in orders and collections causing volatility in interim cash flows and inventory levels
• Input cost inflation (paper, printing, logistics) potentially pressuring gross margins
• Inventory obsolescence risk tied to curriculum changes and edition updates
• Regulatory/approval risks related to educational materials and potential policy changes

Financial Risks:

• Weak interim cash conversion (OCF/NI 0.36) indicating working capital sensitivity
• Limited disclosure on cash balances and investing cash flows, hampering FCF assessment
• Potential concentration of receivables (not disclosed) creating collection risk in seasonal peaks
• Low interest expense suggests limited hedging needs; however, rising rates could affect non-operating income if cash/investments are material (not disclosed)

Key Concerns:

• Sustainability of high gross margin (46.6%) amid cost volatility
• Normalization of OCF relative to net income in the second half
• Ability to sustain profit growth without evident top-line expansion
• Clarity on dividend policy and capital allocation given financing outflows but undisclosed DPS

Investment Implications

Key Takeaways:

• Stable top line (¥8.342bn, -0.1% YoY) with modest operating profit growth (+1.9%) demonstrates margin resilience
• ROE of 7.75% is margin-driven with low financial leverage (1.23x), consistent with a conservative balance sheet
• Cash conversion is weak this half (OCF/NI 0.36), highlighting working capital management as a key watchpoint
• Liquidity and solvency are very strong (current ratio 331%, implied equity ratio ~81%, interest coverage ~2,616x)
• Disclosure gaps (cash, investing CF, dividend details) limit assessment of FCF and payout sustainability

Metrics to Watch:

• OCF/Net income and working capital swings (inventory and receivables turnover)
• Gross and EBITDA margins to gauge cost pass-through and efficiency
• Asset turnover and revenue growth relative to adoption cycles
• Capex and investing cash flows to assess maintenance vs. growth spend
• Dividend announcements/payout ratio guidance and financing CF breakdown
• ROE trajectory and components (margin vs. turnover vs. leverage)

Relative Positioning: Versus domestic publishing/education peers, Bunkeido exhibits above-average margins, exceptionally strong balance sheet, and low financial risk, but delivers moderate ROE and flat revenue, placing it as a quality, defensively positioned operator with constrained growth momentum pending clearer catalysts.

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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