Tsubaki Nakashima Co Ltd

Tsubaki Nakashima maintains a liquidity position that is medium in risk, with a current ratio of 2.77 and cash and equivalents of ¥27.04 billion. However, the company's net cash position is negative after subtracting total debt, indicating a potential liquidity constraint. The price-to-book ratio of 0.29 suggests that the company's market value is significantly below its book value, which may reflect market skepticism about its asset quality or future earnings potential.

The company's profitability metrics are below typical industry benchmarks. Return on equity (ROE) is 1.53%, and return on assets (ROA) is 0.51%, both of which are weak indicators of capital efficiency and asset utilization. The operating margin, at 7.55% (¥1.51 billion operating income on ¥19.97 billion revenue), is also below the median for industrial machinery firms, suggesting room for improvement in cost control or pricing power.

Tsubaki Nakashima's revenue is concentrated in a few key markets and product lines, with disclosed exposure to the automotive and general manufacturing sectors. The company's geographic footprint is primarily in Japan, with limited international diversification, which increases its vulnerability to domestic economic fluctuations.

The company's growth trajectory appears to be modest. Revenue in the latest reported period was ¥19.97 billion, and while the company has a positive operating cash flow of ¥939 million, capital expenditures of ¥945 million suggest reinvestment in operations. The outlook for the current fiscal year indicates a continuation of this trend, with no significant revenue acceleration expected.

Risk factors include a high debt-to-equity ratio of 1.62, which increases financial leverage and exposes the company to interest rate and refinancing risks. The risk assessment also notes a low dilution risk, with no significant dilution potential in the near term. However, the company's capital structure is heavily reliant on long-term debt, which could become a concern if interest rates rise or credit conditions tighten.

Recent events include the filing of financial results showing a net income of ¥906 million and a gross profit of ¥3.56 billion. The company's earnings per share (EPS) were reported at -697.02 JPY, indicating a loss per share in the latest quarter. Analysts have noted the company's revenue of ¥69.84 billion in the most recent quarter, which is in line with the full-year revenue of ¥19.97 billion.

Cash conversion ratio of 1.04 surpasses the 0.95 cohort median, demonstrating strong ability to turn earnings into cash.

Revenue CAGR of 0.7% over four years suggests modest stability despite recent volatility in annual figures.

Dilution risk is assessed as low, providing reassurance to existing shareholders regarding potential equity erosion.

Debt-to-equity ratio of 1.62 sits in the bottom quartile, indicating excessive leverage compared to peers.

Credit risk is flagged as high, suggesting potential difficulties in meeting financial obligations or securing funding.

Return on equity of 1.5% trails the 3.6% industry median, reflecting poor capital efficiency for shareholders.

Revenue ¥17.07B, −3,0% YoY; Operating income −1 220,5% YoY.

• ▍Revenue ¥17.07B, −3,0% YoY
• ▍Operating income −1 220,5% YoY
• ▍Net income −14 920,5% YoY
• ▍Free cash flow −39 104,6% YoY
• ▍Net margin -152.8%

Revenue ¥16.71B, −7,3% YoY; Operating income −75,2% YoY.

• ▍Revenue ¥16.71B, −7,3% YoY
• ▍Operating income −75,2% YoY
• ▍Net income +82,9% YoY
• ▍Free cash flow +137,2% YoY
• ▍Net margin -1.0%

Revenue ¥17.78B, −12,6% YoY; Operating income −34,7% YoY.

• ▍Revenue ¥17.78B, −12,6% YoY
• ▍Operating income −34,7% YoY
• ▍Net income −151,1% YoY
• ▍Free cash flow +101,2% YoY
• ▍Net margin -2.3%

Revenue ¥18.27B, −8,5% YoY; Operating income −76,2% YoY.

• ▍Revenue ¥18.27B, −8,5% YoY
• ▍Operating income −76,2% YoY
• ▍Net income −161,6% YoY
• ▍Free cash flow −233,4% YoY
• ▍Net margin -3.1%

Revenue ¥17.60B; Operating income -¥1.76B.

• ▍Revenue ¥17.60B
• ▍Operating income -¥1.76B
• ▍Net margin 1.0%

Revenue ¥18.02B; Operating income ¥403.0M.

• ▍Revenue ¥18.02B
• ▍Operating income ¥403.0M
• ▍Net margin -5.4%

Revenue ¥20.34B; Operating income ¥663.0M.

• ▍Revenue ¥20.34B
• ▍Operating income ¥663.0M
• ▍Net margin 3.9%

Revenue ¥19.97B; Operating income ¥1.51B.

• ▍Revenue ¥19.97B
• ▍Operating income ¥1.51B
• ▍Net margin 4.5%

Revenue ¥69.84B, −8,0% YoY; Operating income −1 099,6% YoY.

• ▍Revenue ¥69.84B, −8,0% YoY
• ▍Operating income −1 099,6% YoY
• ▍Net income −3 084,0% YoY
• ▍Free cash flow −15 143,7% YoY
• ▍Net margin -39.0%

Revenue ¥75.92B, −1,5% YoY; Operating income −58,5% YoY.

• ▍Revenue ¥75.92B, −1,5% YoY
• ▍Operating income −58,5% YoY
• ▍Net income +170,9% YoY
• ▍Free cash flow −200,6% YoY
• ▍Net margin 1.2%

Revenue ¥77.08B, −2,5% YoY; Operating income +159,2% YoY.

• ▍Revenue ¥77.08B, −2,5% YoY
• ▍Operating income +159,2% YoY
• ▍Net income +85,8% YoY
• ▍Free cash flow +101,3% YoY
• ▍Net margin -1.7%

Revenue ¥79.04B, +16,4% YoY; Operating income −255,9% YoY.

• ▍Revenue ¥79.04B, +16,4% YoY
• ▍Operating income −255,9% YoY
• ▍Net income −355,7% YoY
• ▍Free cash flow −534,1% YoY
• ▍Net margin -11.5%