Kitagawa Corp

Kitagawa Corp's capital structure shows a debt-to-equity ratio of 0.41, indicating a relatively conservative leverage position compared to typical industrial peers. The company holds JPY 10.65 billion in cash and equivalents, but this is offset by JPY 16.24 billion in long-term debt, resulting in a net cash position of negative JPY 5.59 billion. The liquidity risk is rated as medium, with a current ratio of 1.68, suggesting the company can cover its short-term liabilities but with limited buffer.

Profitability metrics are weak, with a return on equity (ROE) of -0.4% and a return on assets (ROA) of -0.2%, both significantly below the industry median for industrial machinery firms. The company reported an operating loss of JPY 49 million and a net loss of JPY 160 million in the latest period. Gross profit of JPY 2.39 billion represents a 15.1% margin, which is below the industry average for firms in this sector.

Geographically, Kitagawa Corp's revenue is concentrated in Japan, with no disclosed international segments. The company does not report revenue by business segment, but its primary activity is the production of industrial machinery and equipment. This concentration increases exposure to domestic economic conditions and regulatory changes in Japan.

The company's growth trajectory is uncertain, with no disclosed revenue growth in the latest period. Analyst estimates suggest a significant discrepancy between the reported revenue of JPY 15.78 billion and the analyst-estimated revenue of JPY 57.28 billion, indicating potential data inconsistencies or misreporting. The outlook for the current fiscal year is neutral, with no clear direction provided for the next fiscal year.

Risk factors include the company's negative net cash position and weak profitability. The dilution risk is rated as low, with no significant dilution expected in the near term. The company has not issued additional shares recently, and there is no indication of a pending equity offering. However, the operating loss and net loss raise concerns about the company's ability to sustain operations without external financing.

Recent events include the filing of the latest financial report, which disclosed the operating and net losses. No recent earnings call transcripts or press releases were available to provide additional context on the company's strategic direction or operational performance.

Operating income surged 76.9% year-over-year to JPY 1.77 billion in fiscal 2025, signaling strong operational recovery.

Gross profit reached JPY 9.11 billion in fiscal 2025, demonstrating improved top-line efficiency despite revenue declines.

The company returned to profitability with JPY 1.25 billion net income in fiscal 2025, ending recent loss streaks.

Long-term debt decreased to JPY 14.04 billion in fiscal 2025, reflecting a modest improvement in leverage management.

Revenue maintained a 4.1% compound annual growth rate over the last four years, indicating long-term stability.

Revenue declined 7.0% year-over-year to JPY 57.28 billion in fiscal 2025, highlighting weakening demand trends.

Operating and net margins remain in the bottom quartile of the industrial machinery cohort, indicating poor profitability.

The company faces high credit risk and medium liquidity risk, posing significant financial stability challenges.

Return on equity is negative at -0.4%, significantly underperforming the cohort median of 3.56%.

Revenue ¥12.71B, −4,7% YoY; Operating income −68,2% YoY.

• ▍Revenue ¥12.71B, −4,7% YoY
• ▍Operating income −68,2% YoY
• ▍Net income −68,0% YoY
• ▍Net margin 2.0%

Revenue ¥15.61B, +5,7% YoY; Operating income +146,1% YoY.

• ▍Revenue ¥15.61B, +5,7% YoY
• ▍Operating income +146,1% YoY
• ▍Net income +1 179,3% YoY
• ▍Net margin 2.4%

Revenue ¥13.48B, −1,4% YoY; Operating income +280,4% YoY.

• ▍Revenue ¥13.48B, −1,4% YoY
• ▍Operating income +280,4% YoY
• ▍Net income +482,4% YoY
• ▍Net margin 14.7%

Revenue ¥15.50B, −1,8% YoY; Operating income +875,5% YoY.

• ▍Revenue ¥15.50B, −1,8% YoY
• ▍Operating income +875,5% YoY
• ▍Net income +145,6% YoY
• ▍Net margin 0.5%

Revenue ¥13.34B; Operating income ¥983.0M.

• ▍Revenue ¥13.34B
• ▍Operating income ¥983.0M
• ▍Net margin 6.0%

Revenue ¥14.77B; Operating income ¥269.0M.

• ▍Revenue ¥14.77B
• ▍Operating income ¥269.0M
• ▍Net margin 0.2%

Revenue ¥13.67B; Operating income ¥133.0M.

• ▍Revenue ¥13.67B
• ▍Operating income ¥133.0M
• ▍Net margin 2.5%

Revenue ¥15.78B; Operating income -¥49.0M.

• ▍Revenue ¥15.78B
• ▍Operating income -¥49.0M
• ▍Net margin -1.0%

Revenue ¥57.28B, −7,0% YoY; Operating income +76,8% YoY.

• ▍Revenue ¥57.28B, −7,0% YoY
• ▍Operating income +76,8% YoY
• ▍Net income −1,6% YoY
• ▍Free cash flow −65,5% YoY
• ▍Net margin 2.2%

Revenue ¥61.57B, +3,1% YoY; Operating income +249,8% YoY.

• ▍Revenue ¥61.57B, +3,1% YoY
• ▍Operating income +249,8% YoY
• ▍Net income +402,1% YoY
• ▍Free cash flow +295,1% YoY
• ▍Net margin 2.1%

Revenue ¥59.70B, +1,8% YoY; Operating income +59,7% YoY.

• ▍Revenue ¥59.70B, +1,8% YoY
• ▍Operating income +59,7% YoY
• ▍Net income +55,9% YoY
• ▍Free cash flow +70,0% YoY
• ▍Net margin -0.7%

Revenue ¥58.68B, +20,4% YoY; Operating income −1 146,2% YoY.

• ▍Revenue ¥58.68B, +20,4% YoY
• ▍Operating income −1 146,2% YoY
• ▍Net income −489,8% YoY
• ▍Free cash flow −3 063,6% YoY
• ▍Net margin -1.6%