Tensho Electric Industries Co Ltd

Tensho Electric Industries maintains a capital structure with a debt-to-equity ratio of 0.88, indicating a moderate reliance on debt financing. The company holds 5.19 billion JPY in cash and equivalents, but this is offset by 8.12 billion JPY in long-term debt, resulting in a net cash position of -2.93 billion JPY. The liquidity risk is assessed as medium, with a current ratio of 1.26, suggesting the company has sufficient short-term assets to cover its short-term liabilities, but with limited buffer.

Profitability metrics show a return on equity (ROE) of 1.64% and a return on assets (ROA) of 0.54%, both of which are below the typical thresholds for healthy performance in the commodity chemicals industry. The company's operating income of 170 million JPY and net income of 152 million JPY reflect a narrow margin, consistent with the competitive and cyclical nature of the industry.

The company's revenue is concentrated in a single business segment, with no disclosed geographic diversification. This lack of diversification increases exposure to regional economic fluctuations and industry-specific risks. The company's revenue of 6.63 billion JPY is derived from its core commodity chemicals business, with no material contributions from other product lines or geographic regions.

Looking ahead, the company's growth trajectory is constrained by its current financial position. The capital expenditure of -2.8 billion JPY indicates a significant outflow for investments, which may impact near-term profitability. Analyst estimates suggest a recent actual revenue of 27.89 billion JPY, which is higher than the reported 6.63 billion JPY, indicating potential discrepancies or seasonal variations in the data.

The risk assessment highlights a medium liquidity risk and a low dilution risk. The company's net cash position is negative after accounting for total debt, which could limit its ability to fund operations or respond to unexpected financial needs. The dilution risk is assessed as low, with no significant dilution potential from basic shares outstanding.

Recent events and filings do not indicate any major changes in the company's strategic direction or financial health. The company's financial statements and disclosures provide a transparent view of its operations, but there are no notable recent developments that would significantly alter the investment outlook.

Net income surged 33.3% year-over-year to JPY 1.27 billion in FY2025, demonstrating strong recent profitability growth.

Operating income expanded 31.9% year-over-year to JPY 1.52 billion in FY2025, indicating improving core operational efficiency.

Revenue grew at a robust 15.7% compound annual growth rate over the last four years, reaching JPY 27.9 billion.

Cash conversion of 19.74% ranks as best-in-class compared to the Commodity Chemicals cohort median of 1.1%.

Long-term debt decreased significantly to JPY 4.49 billion in FY2025 from JPY 8.12 billion in FY2024.

The company faces high credit risk according to internal risk flag assessments, posing potential financial stability concerns.

Debt-to-equity ratio of 0.88 places the company in the bottom quartile of the Commodity Chemicals cohort.

Revenue ¥5.78B, −20,5% YoY; Operating income −1,6% YoY.

• ▍Revenue ¥5.78B, −20,5% YoY
• ▍Operating income −1,6% YoY
• ▍Net income +2,2% YoY
• ▍Net margin 4.8%

Revenue ¥5.40B, −25,2% YoY; Operating income −269,5% YoY.

• ▍Revenue ¥5.40B, −25,2% YoY
• ▍Operating income −269,5% YoY
• ▍Net income −2 566,7% YoY
• ▍Net margin -5.5%

Revenue ¥4.99B, −22,6% YoY; Operating income +8,0% YoY.

• ▍Revenue ¥4.99B, −22,6% YoY
• ▍Operating income +8,0% YoY
• ▍Net income +35,6% YoY
• ▍Net margin 4.4%

Revenue ¥6.95B, +4,8% YoY; Operating income +445,3% YoY.

• ▍Revenue ¥6.95B, +4,8% YoY
• ▍Operating income +445,3% YoY
• ▍Net income +438,2% YoY
• ▍Net margin 11.8%

Revenue ¥7.27B; Operating income ¥306.0M.

• ▍Revenue ¥7.27B
• ▍Operating income ¥306.0M
• ▍Net margin 3.7%

Revenue ¥7.22B; Operating income ¥141.0M.

• ▍Revenue ¥7.22B
• ▍Operating income ¥141.0M
• ▍Net margin 0.2%

Revenue ¥6.44B; Operating income ¥150.0M.

• ▍Revenue ¥6.44B
• ▍Operating income ¥150.0M
• ▍Net margin 2.5%

Revenue ¥6.63B; Operating income ¥170.0M.

• ▍Revenue ¥6.63B
• ▍Operating income ¥170.0M
• ▍Net margin 2.3%

Revenue ¥27.89B, +3,6% YoY; Operating income +31,9% YoY.

• ▍Revenue ¥27.89B, +3,6% YoY
• ▍Operating income +31,9% YoY
• ▍Net income +33,3% YoY
• ▍Free cash flow −0,2% YoY
• ▍Net margin 4.5%

Revenue ¥26.91B, +12,6% YoY; Operating income +91,9% YoY.

• ▍Revenue ¥26.91B, +12,6% YoY
• ▍Operating income +91,9% YoY
• ▍Net income +55,1% YoY
• ▍Free cash flow +124,0% YoY
• ▍Net margin 3.5%

Revenue ¥23.90B, +22,9% YoY; Operating income +148,8% YoY.

• ▍Revenue ¥23.90B, +22,9% YoY
• ▍Operating income +148,8% YoY
• ▍Net income +148,8% YoY
• ▍Free cash flow −1 112,9% YoY
• ▍Net margin 2.6%

Revenue ¥19.45B, +25,0% YoY; Operating income −19,6% YoY.

• ▍Revenue ¥19.45B, +25,0% YoY
• ▍Operating income −19,6% YoY
• ▍Net income +55,7% YoY
• ▍Free cash flow +124,6% YoY
• ▍Net margin 1.3%