| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥4170.2B | ¥3840.1B | +8.6% |
| Operating Income / Operating Profit | ¥297.1B | ¥255.6B | +16.3% |
| Equity-Method Investment Income (Loss) | - | - | - |
| Ordinary Income | ¥317.6B | ¥267.0B | +18.9% |
| Net Income / Net Profit | ¥234.2B | ¥187.8B | +24.7% |
| ROE | 11.9% | 10.9% | - |
For the fiscal year ended March 2026, Revenue was ¥4,170.2B (YoY +¥330.1B +8.6%), Operating Income was ¥297.1B (YoY +¥41.5B +16.3%), Ordinary Income was ¥317.6B (YoY +¥50.6B +18.9%), and Net Income was ¥234.2B (YoY +¥46.4B +24.7%), achieving both revenue and profit growth. Gross margin improved to 17.4% (up +0.5pt from 16.9% a year earlier), and Operating Margin improved to 7.1% (up +0.4pt from 6.7%), indicating higher profitability. Non-operating income of ¥22.2B (dividends received ¥11.6B, foreign exchange gains ¥3.5B, etc.) and extraordinary gains of ¥11.5B (of which gains on sale of investment securities ¥11.4B) boosted Ordinary and Net Income. ROE improved to 11.9% (prior year 11.2%) and remains at a high level.
[Revenue] Revenue expanded steadily to ¥4,170.2B (+8.6%). By segment, the Electrical Materials Business accounted for ¥2,959.0B (+8.3%), representing 70.9% of total revenue; the Industrial Equipment Business was ¥438.8B (+13.1%); and the Proprietary Products Business was ¥849.8B (+7.3%), with all segments achieving revenue growth. Double-digit growth in the Industrial Equipment Business was notable, while the Proprietary Products Business also grew solidly. Firm domestic demand and established price pass-through supported revenue growth.
[Profitability] Cost of sales was ¥3,444.1B (increase of ¥125.5B), raising gross margin to 17.4% (up +0.5pt from 16.9%). SG&A was ¥429.0B (+8.5%), contained to a level roughly in line with revenue growth, yielding Operating Income of ¥297.1B (+16.3%) and an Operating Margin of 7.1% (up +0.4pt from 6.7%). Non-operating income of ¥22.2B (prior year ¥12.5B), driven mainly by dividends received ¥11.6B and foreign exchange gains ¥3.5B, expanded Ordinary Income to ¥317.6B (+18.9%). Extraordinary gains of ¥11.5B (of which gains on sale of investment securities ¥11.4B) boosted Net Income. After corporate taxes and similar of ¥94.7B (effective tax rate 28.8%), Net Income reached ¥234.2B (+24.7%), and Net Margin improved to 5.6% (up +0.7pt from 4.9%). In conclusion, both operating profitability improvement and one-off extraordinary gains contributed to the increase in revenue and profit.
The Electrical Materials Business reported Revenue of ¥2,959.0B (+8.3%) and Segment Profit of ¥185.1B (+15.0%), with a segment profit margin of 6.3%. The Industrial Equipment Business reported Revenue of ¥438.8B (+13.1%) and Segment Profit of ¥24.6B (+30.7%), with a segment profit margin of 5.6%. The Proprietary Products Business reported Revenue of ¥849.8B (+7.3%) and Segment Profit of ¥162.7B (+13.1%), with a segment profit margin of 19.1%, the highest among the three segments. While the Electrical Materials Business remains the core segment, accounting for 70% of revenue, the high margin of the Proprietary Products Business has made a substantial contribution to the company-wide margin improvement. The Industrial Equipment Business posted the highest profit growth rate, capturing expanding demand.
[Profitability] Operating Margin 7.1% (up +0.4pt from 6.7%), Net Margin 5.6% (up +0.7pt from 4.9%), ROE 11.9% (up +0.7pt from 11.2%)—profitability indicators broadly improved. Gross Margin 17.4% (up +0.5pt from 16.9%) reflects price pass-through and improved product mix; SG&A ratio 10.3% (prior year 10.3%, nearly flat) shows maintained cost discipline. [Cash Quality] Operating Cash Flow (OCF) was ¥269.1B, 1.15x Net Income ¥234.2B, indicating good cash backing of earnings. OCF/EBITDA ratio was 0.85x (EBITDA = Operating Income ¥297.1B + Depreciation ¥20.3B = ¥317.4B), slightly below the benchmark 0.9x, suggesting room to improve working capital efficiency. Days Sales Outstanding (DSO) was 69.6 days (Accounts receivable ¥794.3B ÷ Revenue ¥4,170.2B × 365 days), with an increase in receivables raising working capital. [Investment Efficiency] Total Asset Turnover was 1.33x (Revenue ¥4,170.2B ÷ Total Assets ¥3,133.2B), slightly down from 1.38x last year but still at a high level. Capital expenditures were ¥48.2B, 2.38x depreciation ¥20.3B, reflecting growth investments including the construction of the "Innovation Center" R&D facility. [Financial Soundness] Equity Ratio was 63.0% (up +1.0pt from 62.0%), Current Ratio 215.8% (prior year 215.3%), Quick Ratio 196.9% (prior year 193.0%), indicating very high financial safety. Cash and deposits were ¥713.0B versus short-term borrowings of ¥2.5B, yielding Net Cash of ¥710.5B and an effectively debt-free position.
Operating Cash Flow was ¥269.1B (YoY +15.6%), maintaining a healthy level above Net Income ¥234.2B. Operating cash flow subtotal (before working capital changes) was ¥342.7B, and after payment of corporate taxes and similar of ¥88.7B, the company still generated ample cash. In working capital, inventory decreased by ¥27.1B (inventory reduction) which contributed positively, while Accounts Receivable increased by ¥46.8B (slower collections) which was a negative, and Accounts Payable increased by ¥26.0B, contributing positively. Interest and dividend receipts of ¥15.2B bolstered OCF. Investing Cash Flow was -¥66.0B, with capital expenditures ¥48.2B (Innovation Center construction, etc.), intangible fixed assets ¥12.7B, and acquisition of investment securities ¥5.1B as main outflows; inflows included redemption of securities ¥50.0B and sale proceeds ¥18.2B. Free Cash Flow was ¥203.1B (OCF ¥269.1B + Investing CF -¥66.0B), ample enough to cover dividends and share buybacks. Financing Cash Flow was -¥102.7B, primarily for dividend payments ¥84.5B and share buybacks ¥36.6B, and repayment of short-term borrowings ¥2.3B. Cash and cash equivalents increased to ¥762.0B at year-end (from ¥660.6B at the beginning of the period, +¥101.4B), maintaining strong liquidity.
Core earnings are driven by Operating Income ¥297.1B, complemented by Non-operating Income ¥22.2B (dividends received ¥11.6B, foreign exchange gains ¥3.5B, interest received ¥3.7B, etc.). Dividends and interest received increased YoY as investment securities expanded, and the rise in non-operating income reflects the results of the investment strategy. A one-off factor, extraordinary gains of ¥11.5B (of which gains on sale of investment securities ¥11.4B), lifted Net Income but are non-recurring. OCF ¥269.1B is 1.15x Net Income ¥234.2B, indicating good cash backing of earnings. The accrual ratio is -1.1% ((OCF ¥269.1B - Net Income ¥234.2B) ÷ Total Assets ¥3,133.2B), indicating healthy alignment between accounting earnings and actual cash flows. The difference between Ordinary Income ¥317.6B and Net Income ¥234.2B (¥83.4B) is due to extraordinary items (net +¥11.3B) and corporate taxes and similar ¥94.7B, which is within an acceptable range. Earnings quality is high, driven mainly by sustainable operating profit growth, though the non-recurring gain on sale of investment securities has low repeatability into the next fiscal year.
Full Year guidance is Revenue ¥4,360.0B (YoY +4.6%), Operating Income ¥329.0B (YoY +10.7%), Ordinary Income ¥344.0B (YoY +8.3%), and Net Income ¥237.0B (YoY +1.2%). Progress against the H1 results is: Revenue 95.6% (¥4,170.2B ÷ ¥4,360.0B), Operating Income 90.3% (¥297.1B ÷ ¥329.0B), Ordinary Income 92.3% (¥317.6B ÷ ¥344.0B), Net Income 98.8% (¥234.2B ÷ ¥237.0B), indicating steady progress against initial plans. The high Net Income progress ratio reflects an H1 gain on sale of investment securities ¥11.4B; the full-year forecast is conservatively set, incorporating a reversal of this one-off gain. Expected Operating Margin is 7.5% (¥329.0B ÷ ¥4,360.0B), assuming further improvement from the H1 result of 7.1%. Full-year guidance continues to assume growth in both revenue and profit, driven by operating profit growth.
Annual dividend is planned at ¥120 (interim ¥70 at H1-end and year-end ¥50), however the company implemented a 2-for-1 stock split effective December 1, and without considering the split the year-end dividend would be ¥100 and the annual dividend would be ¥170 equivalent. The year-end dividend includes a special dividend of ¥15 (¥30 equivalent before the stock split). Payout Ratio is 58.2% (total dividends ¥134.5B ÷ Net Income ¥234.2B, on a pre-split basis), and coverage of Free Cash Flow ¥203.1B by total dividend payments is 1.49x, a sustainable level. Share buybacks of ¥36.6B were executed; together with dividends ¥84.5B, total shareholder returns were ¥121.1B, and the Total Return Ratio was 51.7% (¥121.1B ÷ Net Income ¥234.2B). Backed by Net Cash ¥710.5B and abundant Free Cash Flow, the company implements balanced shareholder returns combining a stable dividend and opportunistic buybacks.
Segment Concentration Risk: The Electrical Materials Business accounts for 70.9% of Revenue, creating exposure to demand trends and price competition in that market. A slowdown in construction investment or intensified competition could compress gross margins.
Working Capital Efficiency Risk: Days Sales Outstanding 69.6 days and increasing Accounts Receivable, together with OCF/EBITDA ratio 0.85x below the 0.9x benchmark, indicate risk that delayed collections or relaxed credit controls could inflate working capital and reduce cash generation capacity.
Price Volatility Risk of Investment Securities: Investment securities expanded significantly to ¥362.9B (YoY +¥81.7B), and unrealized valuation gains increased by ¥107.1B. Market price volatility or issuer credit risk could affect valuation gains and the P/L.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 7.1% | 3.4% (1.4%–5.0%) | +3.8pt |
| Net Margin | 5.6% | 2.3% (1.0%–4.6%) | +3.3pt |
Operating Margin 7.1% and Net Margin 5.6% both substantially exceed the industry median, positioning the company as a high-profitability player within the wholesale sector.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 8.6% | 5.9% (0.4%–10.7%) | +2.7pt |
Revenue Growth Rate 8.6% exceeds the industry median 5.9%, indicating above-average growth.
※Source: Company aggregation
Revenue and profit growth with improved profitability: Revenue up +8.6% along with gross margin +0.5pt and Operating Margin +0.4pt. The Proprietary Products Business’s segment margin of 19.1% is driving company-wide margin improvement; if the expansion of this high-margin mix continues, there is scope for further margin increases.
Strong financial base and cash generation: Net Cash ¥710.5B, Equity Ratio 63.0%, Current Ratio 215.8%—financial safety is very high—and OCF ¥269.1B and Free Cash Flow ¥203.1B generate abundant funds. Payout Ratio 58.2% and Total Return Ratio 51.7% show solid shareholder returns, reflecting a good balance between financial soundness and shareholder returns.
Room to improve working capital efficiency: Days Sales Outstanding 69.6 days and OCF/EBITDA ratio 0.85x indicate room to improve receivables collection timing. Strengthening working capital management could further enhance cash generation and capital efficiency.
This report was automatically generated by AI analyzing XBRL financial statement data and is a financial analysis document. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference data compiled by the company based on public financial statements. Investment decisions are your own responsibility; please consult a professional as needed before making investment decisions.