| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥767.8B | ¥689.8B | +11.3% |
| Operating Income / Operating Profit | ¥55.9B | ¥48.0B | +16.6% |
| Equity-method Investment Gain/(Loss) | - | - | - |
| Ordinary Income | ¥58.5B | ¥50.2B | +16.3% |
| Net Income | ¥42.2B | ¥34.3B | +23.3% |
| ROE | 6.8% | 5.8% | - |
For the cumulative Q2 of the fiscal year ending March 2026 (Apr–Sep 2024), revenue was ¥767.8B (YoY +¥78.0B +11.3%), operating income was ¥55.9B (YoY +¥8.0B +16.6%), ordinary income was ¥58.5B (YoY +¥8.2B +16.3%), and net income attributable to parent company shareholders was ¥42.0B (YoY +¥7.9B +23.3%) — an increase in both revenue and profit. Revenue rose double digits due to recovery in demand for wires & cables and successful price pass-through; operating income grew faster than revenue due to fixed-cost absorption, yielding an operating margin of 7.3% (up +0.3pt from 7.0% in the prior-year period). A special gain of ¥5.6B (gain on sale of investment securities) boosted net income, and EPS was ¥245.37 (from ¥195.64 in the prior-year period, +25.4%). Progress against the full-year plan (Revenue ¥1,540B, Operating Income ¥112B, Net Income ¥85B) stands at 49.9% for revenue, 49.9% for operating income, and 49.7% for net income — broadly a standard half-year progress level.
[Revenue] Revenue of ¥767.8B (YoY +11.3%) under the single-segment wires & cables structure benefited from recovery in capex-related demand (semiconductors & FA) and construction, as well as price pass-through. Revenue increased ¥78.0B from ¥689.8B in the prior-year period, while cost of sales rose to ¥653.2B (YoY +¥94.8B +17.0%), outpacing revenue growth. Gross profit was ¥114.6B (gross margin 14.9%, down -0.3pt from 15.2% in the prior-year period), possibly pressured by lags in raw material prices (copper) and changes in product mix. Selling, general and administrative expenses were ¥58.7B (SG&A ratio 7.6%, improved -0.6pt from 8.2% in the prior-year period), with fixed-cost absorption effects emerging alongside revenue expansion.
[Profitability] Operating income of ¥55.9B (YoY +16.6%) achieved an operating margin of 7.3% (up +0.3pt from 7.0%) driven by SG&A efficiency. Non-operating items comprised interest income ¥0.5B, dividend income ¥0.5B, foreign exchange gains ¥0.3B, etc., resulting in non-operating income of ¥3.5B and non-operating expenses of ¥0.9B (interest expense ¥0.0B and immaterial), for a net +¥2.6B. Ordinary income was ¥58.5B (YoY +16.3%), increasing at roughly the same pace as operating income. The company recorded special gains of ¥5.6B (gain on sale of investment securities) and special losses of ¥0.9B (impairment losses ¥0.9B, loss on disposal of fixed assets ¥0.3B), producing profit before tax of ¥63.1B (YoY +25.6%). Income taxes were ¥20.9B (effective tax rate 33.1%), and after deducting non-controlling interests ¥0.2B, net income attributable to parent company shareholders was ¥42.0B (YoY +23.3%). The one-off gain on sale of investment securities lifted net income by approximately ¥3.1B, and adjusted core earning power is estimated at an equivalent net margin of 5.1%. In conclusion, results show revenue and profit growth with a notable upside to net income from special gains.
[Profitability] Operating margin 7.3% (up +0.3pt from 7.0% in the prior-year period), net margin 5.5% (up +0.5pt from 5.0%). Gross margin at 14.9% declined -0.3pt from 15.2% in the prior-year period, indicating a continued low-margin structure, while SG&A ratio of 7.6% (improved -0.6pt from 8.2%) drove margin improvement. ROE at 6.8% improved +1.0pt from 5.8% in the prior-year period, though room remains to improve capital efficiency. [Cash Quality] Days Sales Outstanding (DSO) is 112 days, showing a lengthening trend, and inventories increased significantly to ¥99.6B (YoY +27.5%). Trade payables are ¥543.0B (YoY +20.1%), with supplier credit used to ease working capital demand. [Investment Efficiency] Total asset turnover is 0.62x (roughly flat YoY), with inventory increases constraining asset efficiency. [Financial Soundness] Equity ratio is 50.1% (down -3.0pt from 53.1% in the prior-year period but at a healthy level), current ratio 150.5%, quick ratio 133.7% indicating good short-term liquidity. Interest-bearing debt is ¥4.6B against cash & deposits ¥422.2B, giving net cash ¥417.6B and an interest coverage ratio of 1,864x — extremely strong.
Cash and deposits increased significantly to ¥402.2B (YoY +¥72.6B +22.0%), with revenue expansion and working capital management boosting liquidity. Inventories rose to ¥99.6B (YoY +¥21.5B +27.5%), reflecting stock build for demand expectations and price responses. Trade receivables were ¥235.1B (YoY +¥13.1B +5.9%) driven by higher sales, but DSO of 112 days and lengthening collections pose headwinds to cash conversion. Trade payables of ¥543.0B (YoY +¥90.7B +20.1%) expanded through increased purchases and utilization of payment terms, providing supplier credit that supports short-term financing, though there is risk of cash outflow acceleration if terms change. The special gain (gain on sale of investment securities ¥5.6B) provided a one-off cash inflow; assessment of recurring operating cash generation requires normalization of inventory turns and receivables collection. Given the net-cash position and low interest burden, the company maintains a financial base sufficient to cover short-term dividends and working capital needs.
Recurring earnings center on operating income ¥55.9B, while non-operating income ¥3.5B (0.5% of sales) is limited and composed of dividend income and FX gains. Special gains ¥5.6B (gain on sale of investment securities) and special losses ¥0.9B resulted in a net special contribution of ¥4.7B, boosting profit before tax ¥63.1B by about 7.4%. After applying the effective tax rate of 33.1%, the one-off contribution to net income is estimated at approximately ¥3.1B, leaving adjusted core net margin at about 5.1%. Non-operating items are modest, so sustainable earnings depend on the core business. On the accrual side, inventories increased +27.5% and receivables rose, which can delay cash realization; total comprehensive income ¥49.4B (foreign currency translation adjustments ¥2.2B, valuation difference on available-for-sale securities ¥5.2B, retirement benefit adjustments -¥0.3B) diverged from net income ¥42.2B mainly due to unrealized valuation gains on securities — realization risk on these valuation gains warrants attention. The gap between ordinary income and net income is largely explained by special items and tax burdens.
Full-year plan: Revenue ¥1,540B (YoY +13.6%), Operating Income ¥112B (YoY +25.1%), Ordinary Income ¥117B (YoY +26.2%), Net Income Attributable to Parent Company Shareholders ¥85B. Cumulative Q2 progress ratios are Revenue 49.9%, Operating Income 49.9%, Ordinary Income 50.0%, Net Income 49.7% — a standard half-year progress with no deviation exceeding ±10%. If similar demand and gross margin levels hold in H2, results are likely to land in line with the company plan. The dividend forecast is ¥80 for the full year, consistent with the ¥80 interim dividend paid, reflecting a conservative policy.
The interim dividend was ¥80 per share (total dividends approximately ¥1.37B, calculated on 18.00 million shares outstanding less 0.89 million treasury shares), giving a payout ratio of about 33% relative to cumulative Q2 net income attributable to parent company shareholders of ¥42.0B — conservative. Cash and deposits of ¥402.2B cover the dividend payment of just under ¥1.4B comfortably. Given the net-cash position and low interest burden, dividend sustainability is high, and if working capital is reduced, free cash flow cushions could strengthen further.
Gross margin pressure: With gross margin at 14.9% (down -0.3pt from 15.2%), the low-margin structure makes the company vulnerable to price competition and lags in raw material (copper) price pass-through. Delays in price pass-through or falling commodity prices could weaken earnings resilience.
Inventory valuation & turnover risk: Inventories rose substantially to ¥99.6B (YoY +27.5%). Demand slowdown or price declines could cause valuation losses or discounting pressure, impairing cash generation.
Receivables collection risk: DSO of 112 days is trending longer; lax credit control or deterioration in customer financial condition could materialize bad-debt risk and constrain operating cash flow.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 7.3% | – | – |
| Net Margin | 5.5% | 7.0% (6.4%–7.5%) | -1.5pt |
Net margin is 1.5pt below the industry median of 7.0%, highlighting a relative profitability issue due to the low-margin structure.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 11.3% | 4.5% (2.2%–5.8%) | +6.9pt |
Revenue growth of +11.3% substantially exceeds the industry median of 4.5%, indicating relative growth advantage driven by demand recovery and price pass-through.
※ Source: Company compilation
Cumulative Q2 is on track at roughly 50% of the full-year plan, with operating margin 7.3% (improved +0.3pt YoY) confirming profitability improvement via SG&A efficiency. Net cash ¥417.6B and interest coverage 1,864x indicate extremely high financial resilience, limiting short-term liquidity risk.
A one-off gain on sale of investment securities ¥5.6B raised net income by about ¥3.1B, so core earnings should be conservatively viewed as equivalent to a net margin of about 5.1%. Gross margin at 14.9% (down -0.3pt YoY) reflects a continued low-margin structure, and inventory +27.5% and DSO 112 days constrain working capital efficiency. Normalizing inventory turns and receivables collection is key to cash generation and improving ROE (current 6.8%).
This report was automatically generated by AI analyzing XBRL financial statement data. It is not a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the company based on public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed.