CHUOKEIZAI-SHA HOLDINGS,INC. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥3.26B
• Operating Income: ¥234M
• Net Income: ¥236M
• EPS: ¥63.35

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend 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

Chuo Keizai-sha Holdings (consolidated, JGAAP) delivered solid operational improvement in FY2025 Q4, with revenue up 5.0% YoY to ¥3,256m and operating income rising 96.2% YoY to ¥234m. Gross profit of ¥1,093m implies a gross margin of 33.6%, indicating decent cost control and/or mix improvement. Operating margin expanded to roughly 7.2%, reflecting meaningful operating leverage on modest top-line growth. Ordinary income of ¥254m slightly exceeded operating income, suggesting small net non-operating gains or interest burden relief. Despite stronger operations, net income fell 48.6% YoY to ¥245m; this disconnect from the operating recovery likely reflects non-recurring factors in the prior year or differences in extraordinary items and taxes under JGAAP. Using net income plus reported income tax, pretax income is approximated at ~¥393m, implying an effective tax rate near 37–38%, not 0% (the 0% shown is an unreported placeholder). Cash generation was strong, with operating cash flow of ¥365m and OCF/Net Income at 1.49x, signaling good earnings quality. Free cash flow was a positive ¥422m, aided by an investing cash inflow of ¥57m, likely from asset disposals exceeding capex. The balance sheet appears conservative, with current ratio at 425% and quick ratio at 353%, and working capital of ~¥2,588m. Leverage is modest (debt-to-equity ~0.38x) and interest coverage is very high at ~80x, underscoring low financial risk. DuPont analysis yields ROE of 5.63%, driven by a 7.52% net margin, 0.535x asset turnover, and 1.40x leverage; while improving, ROE still trails a typical 8% cost-of-equity hurdle for Japanese small caps. Inventory of ¥574m is material, so inventory turns and obsolescence risk warrant ongoing monitoring in a structurally evolving publishing/education market. Dividend data are unreported in this dataset (zeros indicate nondisclosure), but financing cash outflow of ¥67m suggests some capital returns or debt service occurred. Overall, the company shows improving core profitability, high liquidity, and robust cash conversion, albeit with net income volatility likely tied to non-operating or extraordinary items and taxes. Data limitations include unreported cash and equivalents, equity ratio, DPS, share count, and book value per share, which constrain per-share and capital policy analysis.

Profitability Analysis

roe_decomposition: Reported ROE is 5.63%, consistent with DuPont: Net profit margin 7.52% × Asset turnover 0.535 × Financial leverage 1.40. The ROE uplift YoY is implied by a near-doubling in operating income on 5% sales growth, though full YoY ROE comparison is not possible without prior-year equity and net data. margin_quality: Gross margin of 33.6% and operating margin of ~7.2% indicate improved cost discipline and operating efficiency. EBITDA of ¥283m implies an EBITDA margin of 8.7%, offering a buffer over operating margins given modest D&A (¥49m). Net margin of 7.52% is healthy for a print/digital content and education business but sensitive to non-operating and tax items under JGAAP. operating_leverage: Operating income up 96.2% vs revenue up 5.0% highlights strong operating leverage, likely from fixed-cost absorption and mix (higher-margin products/services). Sustaining this will depend on pricing, digital expansion, and continued SG&A discipline.

Growth Assessment

revenue_sustainability: Top-line growth of 5.0% YoY to ¥3,256m suggests steady demand and/or improved monetization, consistent with a stable core franchise. Sustainability hinges on digital product penetration, repeat/subscription revenues, and event/seminar recovery. profit_quality: Ordinary income (¥254m) above operating income (¥234m) implies modest non-operating tailwinds, while the large YoY decline in net income despite better operations suggests prior-year one-offs or tax effects. Cash conversion is strong (OCF/NI 1.49x), supporting the quality of earnings. outlook: With cost controls in place and operating leverage evident, incremental revenue growth should translate into outsized operating profit gains. Key medium-term drivers include digital content mix, pricing power, and inventory management to protect gross margin amid industry transition.

Financial Health

liquidity: Current ratio 425% and quick ratio 352.8% indicate ample near-term liquidity. Working capital is ¥2,587,874k, providing significant operational flexibility. solvency: Debt-to-equity ratio of 0.38x and interest coverage of ~80.3x point to low solvency risk. Total equity is ¥4,353m against total liabilities of ¥1,669m, reflecting a conservative capital structure. capital_structure: Financial leverage of 1.40x supports ROE without imposing material risk. Equity ratio is shown as 0% but is unreported; based on liabilities and assets, the implied equity/asset ratio would be robust (equity ¥4,353m vs assets ¥6,085m).

Cash Flow Quality

earnings_quality: OCF of ¥365m versus NI of ¥245m yields OCF/NI of 1.49x, indicating positive accruals quality and healthy cash realization. fcf_analysis: FCF is ¥422m, boosted by an investing inflow of ¥57m (likely asset sales exceeding capex). Consistent positive FCF supports reinvestment and potential returns to shareholders, though sustainability depends on ongoing OCF rather than asset disposals. working_capital: Inventories at ¥574m are meaningful; efficient turnover will be important to sustain cash conversion. The strong working capital position suggests headroom to manage seasonality and procurement without incremental borrowing.

Dividend Sustainability

payout_ratio_assessment: Payout ratio shown as 0.0% and DPS 0.00 are unreported placeholders; actual dividend data are not disclosed here. Based on EPS of ¥63.35 and solid OCF, capacity for dividends appears supported in principle, but we cannot quantify a payout ratio. fcf_coverage: With FCF of ¥422m, potential dividend coverage would be strong if a dividend were declared; however, absent disclosed DPS, coverage cannot be computed reliably. policy_outlook: Given conservative leverage and robust liquidity, the company has flexibility for stable or progressive shareholder returns. Confirmation requires official dividend policy guidance and actual DPS disclosure.

Risk Assessment

Business Risks:

• Structural decline in print media and shift to digital formats impacting legacy revenue streams
• Execution risk in digital product development and monetization
• Inventory obsolescence risk given content shelf-life and edition cycles
• Customer concentration in corporate/professional segments and exposure to macro cycles
• Event/seminar demand variability

Financial Risks:

• Potential earnings volatility from extraordinary items under JGAAP
• Tax rate variability affecting bottom-line predictability
• Dependence on working-capital discipline to sustain cash conversion
• Limited scale may constrain operating leverage in downturns

Key Concerns:

• Net income declined 48.6% YoY despite stronger operating profit, indicating non-operating or tax-driven volatility
• Sustainability of margin gains requires ongoing SG&A control and favorable mix
• Investing cash inflow suggests asset sales; recurring FCF should be monitored excluding disposals

Investment Implications

Key Takeaways:

• Core operations improved materially with operating income +96.2% on 5.0% revenue growth
• ROE at 5.63% is improving but below typical small-cap cost of equity benchmarks
• Strong liquidity (current ratio 425%) and low leverage (D/E 0.38x) reduce financial risk
• Cash conversion is robust (OCF/NI 1.49x) and FCF positive at ¥422m
• Net income volatility likely driven by non-operating/extraordinary factors and taxes

Metrics to Watch:

• Gross and operating margin trajectory
• OCF/NI ratio and FCF excluding asset disposal effects
• Inventory turns and obsolescence write-downs
• Tax rate normalization and extraordinary items
• Digital revenue mix and recurring subscription share
• ROE progression toward 8%+

Relative Positioning: Versus domestic publishing/education peers, the company exhibits a conservative balance sheet, strong liquidity, and improving operating efficiency, though absolute profitability (ROE) remains moderate and earnings can be more sensitive to non-operating and tax effects.

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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