These are mechanically computed values based on a residual income model. They are not a forecast of market prices or a recommendation of any investment action, and do not predict or guarantee future share prices. Historical values are computed retrospectively using current guidance-achievement statistics.
| Metric | Current Period | Same Period Last Year | YoY |
|---|---|---|---|
| Revenue | ¥1131.1B | ¥875.0B | +29.3% |
| Operating Income | ¥108.1B | ¥56.8B | +90.4% |
| Equity-Method Investment Gains (Losses) | - | - | - |
| Ordinary Income | ¥117.5B | ¥66.2B | +77.5% |
| Net Income | ¥81.2B | ¥47.1B | +72.2% |
| ROE | 3.9% | 2.4% | - |
In Q1, the Company achieved earnings growth substantially exceeding its revenue growth, with results clearly demonstrating structural improvements in profitability driven by an improved gross margin and enhanced cost efficiency. Revenue was ¥1,131.1B (+29.3% YoY), Operating Income was ¥108.1B (+90.4%), Ordinary Income was ¥117.5B (+77.5%), and Net Income attributable to owners of the parent was ¥81.2B (+72.2%). The factors behind earnings growth substantially exceeding revenue growth were an improvement in the gross margin to 20.2% (+1.6pt from 18.6% in the same period last year), primarily due to an improved product mix centered on the Proprietary Products Business, and a decline in the SG&A ratio to 10.6% (-1.4pt from 12.1% in the same period last year).
【Revenue】Revenue was ¥1,131.1B, representing a +29.3% YoY increase, with all segments achieving double-digit revenue growth. The revenue composition was 62.3% for the Electrical Equipment Materials Business (¥704.5B, +24.9%), 28.6% for the Proprietary Products Business (¥323.1B, +33.5%), and 11.3% for the Industrial Equipment Business (¥127.6B, +39.0%). The growth rates of the Industrial Equipment Business and Proprietary Products Business exceeded the Company-wide growth rate.
【Profit and Loss】Operating Income was ¥108.1B (+90.4% YoY), and the Operating Income margin improved to 9.6%, up +3.1pt from 6.5% in the same period last year. The gross margin increased by +1.6pt to 20.2% from 18.6%, while the SG&A ratio declined to 10.6% from 12.1%, resulting in earnings growth exceeding revenue growth. Ordinary Income was ¥117.5B (+77.5%), with non-operating income primarily consisting of dividend income of ¥7.6B and interest income of ¥1.5B; no non-recurring factors were identified. No extraordinary gains or losses were recorded, and Net Income after deducting income taxes of ¥36.4B (effective tax rate: 31.0%) was ¥81.2B (+72.2%). Both revenue and earnings increased.
Segment profit (on a pre-tax basis; total before adjustments: ¥126.1B) was highest in the Proprietary Products Business at ¥77.5B (¥46.6B in the same period last year, +66.1%; segment profit margin: 24.0%), accounting for 61.4% of total segment profit. The Electrical Equipment Materials Business recorded ¥41.3B (¥23.9B in the same period last year, +72.7%; profit margin: 5.9%), while the Industrial Equipment Business recorded ¥7.3B (¥3.4B in the same period last year, +113.1%; profit margin: 5.7%). Both segments improved their profit margins in addition to recording revenue growth. The high profit margin of the Proprietary Products Business (24.0%) is the primary factor driving up the Company-wide Operating Income margin (9.6%), resulting in significant differences in profit contribution across the business portfolio.
【Profitability】The Operating Income margin was 9.6%, improving by +3.1pt from 6.5% in the same period last year, while the Net Income margin was 7.2%, improving by +1.8pt from 5.4%. Basic EPS was ¥72.28 (¥41.99 in the same period last year, +72.1%). 【Cash Flow Quality】Cash and deposits of ¥750.1B plus current securities of ¥179.9B resulted in liquidity on hand of ¥930.0B. Interest-bearing debt consisted solely of short-term borrowings of ¥2.43B, indicating a substantially debt-free financial position. 【Investment Efficiency】ROE was 3.9% (quarterly result, before annualization), while the total asset turnover ratio remained at 35.4% (quarterly basis). Investment securities were ¥433.4B (+19.4% YoY), representing 20.9% of equity, creating a structure in which fluctuations in valuation gains affect comprehensive income. 【Financial Soundness】The Equity Ratio was 65.0%, up +2.1pt from 62.9% in the same period last year. The Company maintained high liquidity, with a current ratio of 228.9% and a quick ratio of 204.6%.
As cash flow statement items are outside the scope of disclosure, fund movements are analyzed based on changes in the balance sheet. Cash and deposits increased by +5.2% YoY to ¥750.1B, and funds on hand including current securities reached ¥930.0B. Inventories increased by +20.1% YoY to ¥239.9B, while notes and accounts receivable of ¥676.5B and notes and accounts payable of ¥687.9B were both below the levels recorded in the same period last year, indicating mixed changes in the components of working capital. Investment securities increased to ¥433.4B (+19.4%), while retained earnings accumulated to ¥1,558.3B (+2.3%). Interest-bearing debt remained limited to short-term borrowings of ¥2.43B, and no funding concerns are evident given the level of funds on hand.
No extraordinary gains or losses were recorded in Q1, and earnings were generated from recurring business activities. Non-operating income of ¥9.8B primarily consisted of dividend income of ¥7.6B and interest income of ¥1.5B, while foreign exchange losses were limited to ¥0.04B, indicating a low degree of dependence on non-recurring income. Net Income after deducting income taxes of ¥36.4B (effective tax rate: 31.0%) from Ordinary Income of ¥117.5B was ¥81.2B, and the difference from pre-tax income was attributable solely to the tax burden. Meanwhile, comprehensive income was ¥146.8B, exceeding Net Income of ¥81.2B by ¥65.7B. The primary factors were a +¥58.5B change in valuation difference on available-for-sale securities and a +¥7.2B foreign currency translation adjustment. This divergence resulted from changes in the market value of held securities and must be distinguished from Net Income, which reflects the underlying earning power of the business.
Progress against the full-year Company forecast was 25.9% for Revenue, 32.9% for Operating Income, 34.2% for Ordinary Income, and 34.2% for Net Income, all exceeding the 25% benchmark based on simple linear progress. No revisions were made to the earnings forecast or dividend forecast during the quarter. The progress rates for Operating Income, Ordinary Income, and Net Income exceeding that for Revenue are believed to reflect the improved gross margin and the high profitability of the Proprietary Products Business.
The Company’s forecast annual dividend is ¥85.00, implying a Payout Ratio of approximately 40.3% based on forecast full-year EPS of ¥211.13. The year-end dividend for the fiscal year ending March 2026 includes a special dividend of ¥15. The Company conducted a 2-for-1 stock split of its common shares effective December 1, 2025. For the Q2-end dividend, the actual amount before the stock split is stated, while the annual dividend assuming that the split had occurred at the beginning of the previous fiscal year is ¥85.00. Treasury shares totaled 1,333 thousand shares against 113,660 thousand shares issued (a ratio of 1.2%), and no treasury share repurchases were confirmed during the quarter.
Profit concentration within the business portfolio: The Proprietary Products Business accounted for ¥77.5B, or 61.4%, of segment profit (total before adjustments: ¥126.1B), and its profit margin of 24.0% significantly lifts the Company-wide Operating Income margin of 9.6%. A deterioration in the profitability of this business would have a relatively significant impact on Company-wide earnings.
Cyclicality of the Electrical Equipment Materials Business: The Electrical Equipment Materials Business accounted for 62.3% of revenue (¥704.5B) and grew by +24.9% YoY; however, its segment profit margin of 5.9% is lower than that of the Proprietary Products Business (24.0%), and its business structure is more susceptible to fluctuations in construction investment trends and other factors.
Fluctuations in the market value of investment securities: Investment securities were ¥433.4B (20.9% of equity), an increase of +19.4% YoY. In Q1, the +¥58.5B change in valuation difference on available-for-sale securities contributed to the increase in comprehensive income of ¥146.8B. These valuation gains may fluctuate due to market conditions.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Income Margin | 9.6% | 4.3% (1.7%–6.9%) | +5.3pt |
| Net Income Margin | 7.2% | 3.8% (1.5%–5.1%) | +3.4pt |
Both the Operating Income margin and Net Income margin significantly exceeded the industry median, placing the Company among the top performers in the industry.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 29.3% | 3.1% (-0.6%–11.7%) | +26.2pt |
The Revenue growth rate significantly exceeded the industry median, representing an outstanding rate of revenue growth within the industry.
Source: Compiled by the Company
Operating Income growth of +90.4% significantly exceeded Revenue growth of +29.3%, confirming positive operating leverage driven by a +1.6pt improvement in the gross margin and a -1.4pt decline in the SG&A ratio.
Progress against the full-year plan was 32.9% for Operating Income, 34.2% for Ordinary Income, and 34.2% for Net Income, all exceeding the 25% benchmark based on equal quarterly progress.
The Proprietary Products Business accounted for 61.4% of segment profit, and its high profit margin of 24.0% is driving Company-wide profitability.
This is an indicative range mechanically calculated solely from publicly disclosed data using a residual income model (Ohlson-type model with an explicit 5-year fade). It is not a forecast of the market share price or a recommendation of any specific investment action.
| Scenario | Theoretical Share Price |
|---|---|
| bear | ¥1,970 |
| base | ¥1,992 |
| bull | ¥2,032 |
| Calculation Assumption | Value |
|---|---|
| Book Value Per Share (BPS) | ¥1,849 |
| Adjusted Forecast EPS | ¥218.9 |
| Cost of Equity r | 9.15% (10-year government bond 2.65% + equity risk premium 6.00% + size premium 0.50%) |
| Residual Income Persistence Coefficient ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 40.3% |
| Forecast EPS Confidence Adjustment | ×1.037 (based on the industry’s historical guidance achievement rate) |
| Implied PBR / PER |
Sensitivity: ¥1,937–¥2,050 at ±1% for the cost of equity, and ¥1,989–¥1,997 at ±0.1 for ω.
Notes:
(Calculation model: Residual Income Model / Interest Rate Reference Month: 2026-06 / This value does not predict or guarantee the future share price)
This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not recommend investment in any specific security. The 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 with a professional as necessary.
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| 1.08x / 9.1x |