Daidoh Ltd

Daidoh Ltd operates with a debt-to-equity ratio of 1.06, indicating a moderate reliance on debt financing. The company's liquidity position is characterized as medium risk, with a current ratio of 1.26, suggesting it has sufficient short-term assets to cover its short-term liabilities, but with limited buffer. The company's cash and equivalents amount to ¥5.38 billion, but this is offset by long-term debt of ¥14.78 billion, resulting in a net cash position that is negative after subtracting total debt.

Profitability metrics show mixed results. The company's return on equity (ROE) is 7.55%, which is relatively strong, but its return on assets (ROA) is only 2.58%, indicating that the company is not efficiently utilizing its assets to generate returns. Gross profit of ¥4.24 billion represents a healthy margin, but the operating loss of ¥179 million highlights inefficiencies in cost management or pricing. The net income of ¥1.06 billion suggests that the company is still profitable despite the operating loss, likely due to non-operating income or gains.

Geographically and segment-wise, the company's exposure is not explicitly detailed in the available data. However, the company's revenue concentration is not specified, and no major geographic or product segments are disclosed. This lack of segmentation data limits the ability to assess the company's diversification and potential vulnerabilities to regional or product-specific risks.

The company's growth trajectory appears to be under pressure. The operating cash flow is negative at ¥1.88 billion, and capital expenditures are substantial at ¥10.57 billion, indicating a significant investment in infrastructure or expansion. The recent actual revenue of ¥28.61 billion is significantly lower than the reported ¥7.78 billion, suggesting a possible discrepancy in reporting periods or a decline in performance. The net income of ¥1.06 billion is a positive sign, but the operating loss and negative cash flow raise concerns about the sustainability of this profitability.

Risk factors include the company's liquidity position, which is rated as medium risk, and the potential for dilution, which is currently assessed as low. The company's capital structure includes a high level of long-term debt, which could become a burden if interest rates rise or if the company's cash flow deteriorates further. The risk assessment also notes that the company's net cash is negative after subtracting total debt, which could limit its ability to invest in growth opportunities or withstand financial shocks.

Recent events and filings do not provide specific details on the company's strategic direction or operational changes. The company's last actual EPS was -91.65 JPY, indicating a loss per share, which is a concerning signal for investors. The discrepancy between the reported revenue and the analyst estimate of ¥28.61 billion suggests that the company may be in a period of transition or facing challenges in its core operations.

Revenue grew at a 13.4% CAGR over four years, demonstrating consistent top-line expansion despite recent volatility.

Free cash flow improved by 76% year-over-year in FY2025, suggesting a potential stabilization in cash generation.

Gross profit reached 15.5 billion JPY in FY2025, maintaining strong top-line profitability despite operating losses.

The company carries a high credit risk flag, indicating substantial concerns regarding its ability to meet debt obligations.

Debt-to-equity ratio of 1.06 places Daidoh in the bottom quartile, reflecting excessive leverage compared to peers.

Cash conversion of -1.78 ranks in the bottom quartile, showing poor ability to turn earnings into cash.

Revenue ¥8.89B, +28,5% YoY; Operating income +126,8% YoY.

• ▍Revenue ¥8.89B, +28,5% YoY
• ▍Operating income +126,8% YoY
• ▍Net income −172,8% YoY
• ▍Net margin -2.0%

Revenue ¥6.66B, −2,6% YoY; Operating income −503,2% YoY.

• ▍Revenue ¥6.66B, −2,6% YoY
• ▍Operating income −503,2% YoY
• ▍Net income +100,8% YoY
• ▍Net margin 0.0%

Revenue ¥6.64B, −3,5% YoY; Operating income +0,5% YoY.

• ▍Revenue ¥6.64B, −3,5% YoY
• ▍Operating income +0,5% YoY
• ▍Net income −176,5% YoY
• ▍Net margin -2.8%

Revenue ¥7.97B, +2,4% YoY; Operating income −1 818,4% YoY.

• ▍Revenue ¥7.97B, +2,4% YoY
• ▍Operating income −1 818,4% YoY
• ▍Net income −338,9% YoY
• ▍Net margin -31.6%

Revenue ¥6.92B; Operating income -¥142.0M.

• ▍Revenue ¥6.92B
• ▍Operating income -¥142.0M
• ▍Net margin 3.5%

Revenue ¥6.84B; Operating income -¥123.0M.

• ▍Revenue ¥6.84B
• ▍Operating income -¥123.0M
• ▍Net margin -2.0%

Revenue ¥6.88B; Operating income -¥196.0M.

• ▍Revenue ¥6.88B
• ▍Operating income -¥196.0M
• ▍Net margin -1.0%

Revenue ¥7.78B; Operating income -¥179.0M.

• ▍Revenue ¥7.78B
• ▍Operating income -¥179.0M
• ▍Net margin 13.6%

Revenue ¥28.61B, −0,3% YoY; Operating income −401,3% YoY.

• ▍Revenue ¥28.61B, −0,3% YoY
• ▍Operating income −401,3% YoY
• ▍Net income −950,3% YoY
• ▍Free cash flow +76,0% YoY
• ▍Net margin -8.7%

Revenue ¥28.70B, +1,7% YoY; Operating income −3,5% YoY.

• ▍Revenue ¥28.70B, +1,7% YoY
• ▍Operating income −3,5% YoY
• ▍Net income −95,7% YoY
• ▍Free cash flow −229,6% YoY
• ▍Net margin 1.0%

Revenue ¥28.22B, +14,7% YoY; Operating income +71,3% YoY.

• ▍Revenue ¥28.22B, +14,7% YoY
• ▍Operating income +71,3% YoY
• ▍Net income +290,6% YoY
• ▍Free cash flow +320,3% YoY
• ▍Net margin 23.9%

Revenue ¥24.61B, +42,3% YoY; Operating income +5,3% YoY.

• ▍Revenue ¥24.61B, +42,3% YoY
• ▍Operating income +5,3% YoY
• ▍Net income +21,4% YoY
• ▍Free cash flow +11,4% YoY
• ▍Net margin -14.4%