Daiwa Computer Co Ltd

Daiwa Computer maintains a strong liquidity position, with cash and equivalents amounting to ¥3.68 billion, representing 61.4% of total assets. The company's liquidity FPT (free cash flow to total debt) is robust, supported by a current ratio of 6.56 and a debt-to-equity ratio of 0.02, indicating minimal leverage risk. The price-to-book ratio of 0.86 suggests the company is trading at a discount to its book value, which may reflect market skepticism about future earnings potential or asset revaluation.

Profitability metrics show a return on equity (ROE) of 1.9% and a return on assets (ROA) of 1.58%, both below the industry median for software firms, which typically exceed 5% ROE and 3% ROA. Gross margin stands at 29.8% (¥242.7 million gross profit on ¥813.5 million revenue), but operating margin is only 15.5% (¥125.7 million), indicating pressure from operating expenses. Net income of ¥94.96 million represents a net margin of 11.7%, which is modest for a software company.

Geographically, Daiwa Computer's revenue is concentrated in Japan, with no disclosed international operations in the latest financials. Segment-wise, the company operates as a single business unit, with no material diversification across product lines or customer bases. This lack of diversification increases exposure to domestic economic conditions and regulatory shifts in Japan.

The company's revenue growth has been flat, with ¥813.5 million in the latest period compared to ¥3.2 billion in the prior year, suggesting a significant decline or a shift in reporting periods. Analysts have recorded a last actual revenue of ¥3.2 billion, but the current period's ¥813.5 million suggests a possible quarterly or reporting period mismatch. The outlook for the current fiscal year is neutral, with no significant growth or contraction expected.

Risk factors include low liquidity and dilution risk, with no immediate filing-based flags detected. The company has not issued new shares in the recent period, and there is no indication of dilution pressure from ATM or shelf offerings. However, the low ROE and ROA suggest operational inefficiencies that could impact long-term value creation.

Recent events include the filing of the latest financial report, which shows a decline in revenue and a modest net income. No material earnings surprises or regulatory actions were reported in the latest quarter. The company's market price of ¥1,116 implies a market cap of ¥4.32 billion, with a price-to-earnings ratio of 45.54, which is high for a company with low growth and profitability.

The company maintains a low debt-to-equity ratio of 0.02, reflecting a conservative and stable capital structure.

Revenue grew at a 5.3% CAGR over four years, showing consistent top-line expansion despite recent volatility.

Operating income growth slowed to 12.6% in FY2025, decelerating from the stronger momentum seen in prior periods.

Revenue ¥784.0M, −4,8% YoY; Operating income −82,9% YoY.

• ▍Revenue ¥784.0M, −4,8% YoY
• ▍Operating income −82,9% YoY
• ▍Net income −80,2% YoY
• ▍Net margin 3.1%

Revenue ¥767.3M, +1,5% YoY; Operating income −72,4% YoY.

• ▍Revenue ¥767.3M, +1,5% YoY
• ▍Operating income −72,4% YoY
• ▍Net income −63,5% YoY
• ▍Net margin 4.2%

Revenue ¥808.1M, −3,1% YoY; Operating income +19,2% YoY.

• ▍Revenue ¥808.1M, −3,1% YoY
• ▍Operating income +19,2% YoY
• ▍Net income +60,7% YoY
• ▍Net margin 14.6%

Revenue ¥817.0M, +0,4% YoY; Operating income +6,8% YoY.

• ▍Revenue ¥817.0M, +0,4% YoY
• ▍Operating income +6,8% YoY
• ▍Net income −6,2% YoY
• ▍Net margin 10.9%

Revenue ¥823.7M; Operating income ¥174.6M.

• ▍Revenue ¥823.7M
• ▍Operating income ¥174.6M
• ▍Net margin 14.8%

Revenue ¥756.0M; Operating income ¥133.6M.

• ▍Revenue ¥756.0M
• ▍Operating income ¥133.6M
• ▍Net margin 11.7%

Revenue ¥834.0M; Operating income ¥108.3M.

• ▍Revenue ¥834.0M
• ▍Operating income ¥108.3M
• ▍Net margin 8.8%

Revenue ¥813.5M; Operating income ¥125.7M.

• ▍Revenue ¥813.5M
• ▍Operating income ¥125.7M
• ▍Net margin 11.7%

Revenue ¥3.20B, −2,6% YoY; Operating income +12,7% YoY.

• ▍Revenue ¥3.20B, −2,6% YoY
• ▍Operating income +12,7% YoY
• ▍Net income +22,0% YoY
• ▍Free cash flow +14,0% YoY
• ▍Net margin 13.0%

Revenue ¥3.29B, +9,5% YoY; Operating income +0,7% YoY.

• ▍Revenue ¥3.29B, +9,5% YoY
• ▍Operating income +0,7% YoY
• ▍Net income +4,0% YoY
• ▍Free cash flow +4,4% YoY
• ▍Net margin 10.4%

Revenue ¥3.01B, +4,5% YoY; Operating income +6,8% YoY.

• ▍Revenue ¥3.01B, +4,5% YoY
• ▍Operating income +6,8% YoY
• ▍Net income −3,1% YoY
• ▍Free cash flow −2,5% YoY
• ▍Net margin 10.9%

Revenue ¥2.88B, +10,2% YoY; Operating income +2,8% YoY.

• ▍Revenue ¥2.88B, +10,2% YoY
• ▍Operating income +2,8% YoY
• ▍Net income +3,2% YoY
• ▍Free cash flow −0,4% YoY
• ▍Net margin 11.8%