Daiwa Motor Transportation Co Ltd

Daiwa Motor Transportation has a liquidity position that is currently medium, with a current ratio of 1.15 and a debt-to-equity ratio of 1.51. The company holds JPY 5.87 billion in cash and equivalents, but this is offset by JPY 13.93 billion in long-term debt, resulting in a net cash position that is negative after subtracting total debt. The company's operating cash flow is positive at JPY 576 million, but capital expenditures of JPY 2.46 billion suggest ongoing investment in infrastructure or fleet maintenance.

Profitability is a concern, with a return on equity of -2.57% and a return on assets of -0.78%. These figures indicate that the company is not generating returns that exceed its cost of capital, and its operating income is negative at JPY -230 million. Gross profit stands at JPY 263 million, but this is insufficient to cover operating expenses, leading to a net loss of JPY 236 million.

The company's revenue is concentrated in a single business segment, as disclosed in its financial statements, with no geographic diversification provided in the available data. This lack of diversification may expose the company to regional economic fluctuations or regulatory changes that could impact its operations.

Looking ahead, the company's revenue outlook is uncertain, with no specific growth trajectory provided in the available data. However, the company's capital expenditures suggest a commitment to maintaining or expanding its operations, which could support future revenue growth if executed effectively.

Risk factors include the company's negative net cash position and the potential for dilution, although the risk of dilution is currently assessed as low. The company's liquidity risk is moderate, with a current ratio of 1.15, but its debt-to-equity ratio of 1.51 indicates a higher reliance on debt financing. Credit risk is not explicitly quantified, but the company's negative operating income and net loss suggest potential challenges in maintaining creditworthiness.

Recent events include the disclosure of a net loss in the latest financial report, with no significant new developments or strategic initiatives reported in the available data. Analyst estimates for revenue and EPS are lower than the company's actual performance, indicating a potential disconnect between market expectations and the company's operational results.

Revenue grew 13.4% annually over four years, reaching 19.0 billion JPY in fiscal 2025.

Net income surged 129.2% year-over-year to 132 million JPY in fiscal 2025.

Operating income improved 99.5% year-over-year, narrowing the loss to just 2 million JPY.

Free cash flow turned positive with a 107.6% increase to 157 million JPY in fiscal 2025.

Gross profit expanded to 1.74 billion JPY in fiscal 2025, indicating top-line strength.

Operating and net margins remain negative at -5.1% and -5.3%, lagging peer medians.

Debt-to-equity ratio stands at 1.51, significantly higher than the peer median of 0.68.

The company faces high credit risk and medium liquidity risk according to risk assessments.

Cash conversion is severely negative at -2.44, far below the peer median of 1.5.

Revenue ¥5.18B, +4,1% YoY; Operating income −9,8% YoY.

• ▍Revenue ¥5.18B, +4,1% YoY
• ▍Operating income −9,8% YoY
• ▍Net income −25,2% YoY
• ▍Net margin 3.1%

Revenue ¥4.92B, +4,4% YoY; Operating income +196,0% YoY.

• ▍Revenue ¥4.92B, +4,4% YoY
• ▍Operating income +196,0% YoY
• ▍Net income +279,5% YoY
• ▍Net margin 1.4%

Revenue ¥4.97B, +7,2% YoY; Operating income +107,4% YoY.

• ▍Revenue ¥4.97B, +7,2% YoY
• ▍Operating income +107,4% YoY
• ▍Net income +57,5% YoY
• ▍Net margin -0.9%

Revenue ¥4.72B, +5,5% YoY; Operating income +67,8% YoY.

• ▍Revenue ¥4.72B, +5,5% YoY
• ▍Operating income +67,8% YoY
• ▍Net income +125,0% YoY
• ▍Net margin 1.3%

Revenue ¥4.97B; Operating income ¥266.0M.

• ▍Revenue ¥4.97B
• ▍Operating income ¥266.0M
• ▍Net margin 4.4%

Revenue ¥4.71B; Operating income -¥99.0M.

• ▍Revenue ¥4.71B
• ▍Operating income -¥99.0M
• ▍Net margin -0.8%

Revenue ¥4.63B; Operating income -¥95.0M.

• ▍Revenue ¥4.63B
• ▍Operating income -¥95.0M
• ▍Net margin -2.3%

Revenue ¥4.47B; Operating income -¥230.0M.

• ▍Revenue ¥4.47B
• ▍Operating income -¥230.0M
• ▍Net margin -5.3%

Revenue ¥19.04B, +3,6% YoY; Operating income +99,5% YoY.

• ▍Revenue ¥19.04B, +3,6% YoY
• ▍Operating income +99,5% YoY
• ▍Net income +129,2% YoY
• ▍Free cash flow +107,6% YoY
• ▍Net margin 0.7%

Revenue ¥18.38B, +3,3% YoY; Operating income −422,2% YoY.

• ▍Revenue ¥18.38B, +3,3% YoY
• ▍Operating income −422,2% YoY
• ▍Net income −353,9% YoY
• ▍Free cash flow −789,3% YoY
• ▍Net margin -2.5%

Revenue ¥17.80B, +16,5% YoY; Operating income +94,8% YoY.

• ▍Revenue ¥17.80B, +16,5% YoY
• ▍Operating income +94,8% YoY
• ▍Net income −90,2% YoY
• ▍Free cash flow −86,3% YoY
• ▍Net margin 1.0%

Revenue ¥15.27B, +32,4% YoY; Operating income +56,9% YoY.

• ▍Revenue ¥15.27B, +32,4% YoY
• ▍Operating income +56,9% YoY
• ▍Net income +205,7% YoY
• ▍Free cash flow +255,8% YoY
• ▍Net margin 11.9%