Breaking Down Japan Aviation Electronics Industry, Limited Financial Health: Key Insights for Investors

Dive into our deep-dive on Japan Aviation Electronics Industry, Limited (6807.T), where FY ending March 31, 2025 revenue stood at ¥221.64 billion (down 1.83% year‑over‑year) with TTM revenue of ¥218.63 billion (a 3.24% YoY decline) even as operating profit rose 8.3% for the year - setting up a complex picture against analyst 2026 revenue estimates of ¥231.7 billion (a projected 4.6% increase); short‑term pain is visible in the six months to Sept 30, 2025 where net profit margin fell to 4.3% (from 5.6%), operating profit plunged to ¥4.76 billion (‑48.4%), profit attributable to owners dropped 53%, and basic EPS slid to ¥46.23 from ¥98.45, yet the balance sheet shows resilience with cash and equivalents of ¥48.02 billion, total assets of ¥220.67 billion, net assets of ¥136.89 billion (equity ratio 62.0%), non‑current liabilities reduced to ¥34.50 billion, total equity rising to ¥142.29 billion, capital expenditures of ¥107 billion (depreciation ¥96 billion) and the associate carrying amount swelling to ¥61.22 billion - all against a market capitalization of ¥175.00 billion, a share price of ¥2,596, P/E of 21.67 (forward P/E 16.48), dividend per share ¥60 (yield 2.31%), and analyst targets ranging ¥2,307-¥3,156 (consensus ¥2,644) while estimated fair value sits at ¥3,363.81; with risks from margin compression, raw material cost pressure, production delays, sector demand softness, currency swings and aviation‑sector concentration, and opportunities tied to investments in automotive/telecom, operational efficiency and a sturdy equity base, read on to unpack what these figures mean for investors and potential upside scenarios

Japan Aviation Electronics Industry, Limited (6807.T) Revenue Analysis

• FY ending Mar 31, 2025 revenue: ¥221.64 billion (-1.83% YoY)
• TTM revenue as of Sep 30, 2025: ¥218.63 billion (-3.24% YoY)
• 6-month net sales change (to Sep 30, 2025): -2.7% YoY
• Operating profit change (FY Mar 31, 2025): +8.3% YoY

• Analyst consensus for 2026 implies a revenue rebound to ¥231.7 billion (+4.6% vs FY2025).
• Revenue per employee of ¥21.53 million provides a productivity benchmark for peer comparison.

Japan Aviation Electronics Industry, Limited (6807.T) - Profitability Metrics

• Net profit margin (6 months ended Sep 30, 2025): 4.3% (down from 5.6% YoY).
• Operating profit (6 months ended Sep 30, 2025): ¥4.76 billion (-48.4% YoY).
• Profit attributable to owners of the parent (6 months ended Sep 30, 2025): -53% YoY decline.
• Basic EPS (6 months ended Sep 30, 2025): ¥46.23 (down from ¥98.45 YoY).
• Dividend policy: announced dividend increase despite shorter‑term profit declines.
• Analyst consensus for FY2026 EPS: ¥152 (forecasted +27% vs current guidance/expected recovery).

• Drivers of the decline: compression of operating margins and one‑off or cyclical factors leading to nearly halving of operating profit and EPS.
• Why the dividend rise matters: management is signaling confidence in cash flow stability and medium‑term recovery despite weak interim profitability.
• What the analyst EPS forecast implies: market expects a notable rebound into FY2026 (EPS to ¥152), which would restore investor returns if realized.

Japan Aviation Electronics Industry, Limited (6807.T) - Debt vs. Equity Structure

Key balance-sheet shifts for the fiscal year ended March 31, 2025 show a marked move toward equity strength and lower financial leverage.

• Equity base: Total equity rose from ¥136.65B (2024) to ¥142.29B (2025), strengthening solvency metrics.
• Leverage reduction: Non-current liabilities fell from ¥58.88B to ¥34.50B, lowering long-term debt exposure.
• Balance-sheet composition: With total assets of ¥220.67B and net assets of ¥136.89B, the equity ratio stands at 62.0%, signaling a conservative capital structure.

Notable investment and asset movements:

• Capital spending was high at ¥107.0B in FY2025, largely offset by ¥96.0B of depreciation - indicating sustained reinvestment alongside significant consumption of fixed assets.
• The carrying amount of associates jumped to ¥61.22B (from ¥22.31B), a ¥38.91B increase that materially affects consolidated asset composition and may reflect either valuation gains or new/expanded equity-method investments.

Implications for financial risk and solvency: the combined drop in non-current liabilities and the uplift in total equity imply reduced financial risk, greater headroom for debt servicing, and improved resilience against volatility in operating cash flows.

For additional investor-focused context and shareholder activity, see: Exploring Japan Aviation Electronics Industry, Limited Investor Profile: Who's Buying and Why?

Japan Aviation Electronics Industry, Limited (6807.T) - Liquidity and Solvency

• Cash & cash equivalents (as of Sep 30, 2025): ¥48.02 billion - a solid short-term liquidity buffer.
• Current ratio (current assets / current liabilities): a primary measure of short-term coverage of obligations; management commentary and the balance sheet should be checked for the exact ratio at quarter-end.
• Non-current liabilities: decreased from ¥58.88 billion (2024) to ¥34.50 billion (2025), materially improving long-term solvency.
• Equity ratio (as of Mar 31, 2025): 62.0% - indicates a strong equity base relative to total assets.
• Net profit margin (six months ending Sep 30, 2025): 4.3% - reflects profitability on sales for the period.
• Profit attributable to owners of the parent: down 53% YoY for the six months ending Sep 30, 2025 - a substantial earnings decline that may pressure future liquidity if trends continue.

• Implication: large cash balance plus reduced long-term debt and a high equity ratio strengthen solvency; however, a 53% drop in attributable profit and a modest net margin (4.3%) warrant monitoring of operating performance and working capital trends.
• Investor action: combine this liquidity/solvency snapshot with operational metrics, cash flow statements, and the next quarterly update to assess sustainability of earnings and dividend capacity.

Japan Aviation Electronics Industry, Limited (6807.T) - Valuation Analysis

• Price (12‑Dec‑2025): ¥2,596
• Market cap: ¥175.00 billion
• P/E ratio: 21.67
• Forward P/E: 16.48
• Dividend per share: ¥60.00
• Dividend yield: 2.31%
• Analyst target range: ¥2,307 - ¥3,156; consensus target: ¥2,644
• Estimated fair value: ¥3,363.81 (stock trading below fair value)
• Employees: 10,154; revenue per employee: ¥21.53 million

• Implied upside to consensus analyst target: ≈1.9% (¥2,644 vs ¥2,596)
• Implied upside to estimated fair value: ≈29.6% (¥3,363.81 vs ¥2,596)
• Forward P/E below trailing P/E suggests expected EPS growth or improved profitability

Japan Aviation Electronics Industry, Limited (6807.T) - Risk Factors

• Margin compression: net profit margin fell from 5.6% to 4.3% (6 months ending 30-Sep-2025), reflecting narrower operating leverage.
• Input-cost pressure: elevated raw material and component prices (notably copper, specialty plastics and semiconductor components) have increased COGS and reduced gross margin.
• Production delays: postponements in mass production of new products have deferred revenue recognition and raised unit-level costs.
• Demand contraction: weakening end-market demand in automotive electronics, industrial equipment and certain consumer segments threatens top-line growth.
• Sector concentration: high revenue exposure to aviation and aerospace makes results vulnerable to airline CAPEX cycles, defense budgets and OEM program timing.
• FX volatility: a stronger yen against USD/EUR/ASEAN currencies can compress reported revenues and margins from overseas sales.
• Competitive intensity: aggressive pricing and technology advances by global electronics suppliers could erode market share and force margin-reducing responses.

• Concentration risk: a small number of large aerospace customers account for a significant portion of sales - any program cut or certification delay materially affects revenue timing.
• Liquidity & leverage: reduced operating cash flow and higher inventories have pushed net debt/EBITDA to ~1.9x, tightening financial flexibility if margins continue to compress.
• Execution risk: failure to ramp new product lines to planned yields will prolong margin pressure and increase per-unit costs.

• Monthly order intake and backlog by end-market (aviation vs. automotive vs. industrial).
• Raw material cost trends (copper, plastics, semiconductor pass-throughs) and any supplier price-variance clauses.
• Mass-production start dates, yield curves and product qualification milestones.
• Foreign-exchange sensitivity - realized FX rates vs. hedged positions and policy disclosures.
• Working-capital metrics: inventory days, DSO and supplier payment terms.

Japan Aviation Electronics Industry, Limited (6807.T) - Growth Opportunities

• Analyst revenue projection for FY 2026: ¥231.7 billion (implied +4.6% YoY)
• Operating profit improvement: +8.3% for FY ending March 31, 2025 - indicates rising operational efficiency
• CapEx commitment: ¥107.0 billion invested in FY ending March 31, 2025 - capacity and technology upgrade signal growth intent
• Balance-sheet strength: equity ratio of 62.0% as of March 31, 2025 - provides leverage headroom for strategic investments
• Shareholder returns: company announced a dividend increase, reinforcing management's confidence in cash flow sustainability

• Strategic investment focus: ¥107.0 billion in CapEx targeted at automation, advanced manufacturing, and R&D to support higher-volume, higher-margin product families.
• Market exposure benefits: automotive and telecom end-markets growing on EV adoption and network upgrades, respectively-supporting above-industry revenue tailwinds.
• Financial flexibility: 62.0% equity ratio enables inorganic growth (M&A) or further capacity spending without excessive leverage.