6526 · Socionext

Will it survive?

• Can it pay its interest? —
  No meaningful interest burden
  Little or no interest expense reported
  What this means

  Little or no interest expense reported, the business isn't leaning on lenders to operate.

• How heavy is the debt, net of cash? +¥49.5B
  Net cash, debt-free
  Cash ¥44.5B + ST investments ¥5.0B − debt ¥0
  What this means

  Cash and short-term investments exceed every dollar of debt by ¥49.5B, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.

• How long is cash tied up? —
  Not enough data
  What this means

  The filing data didn't include the inputs for this check.

Is it a good business?

• Return on invested capital —
  Not enough data
  Industry peers: median 7%
  What this means

  The filing data didn't include the inputs for this check.

• Owner-earnings margin 8%
  Solid through the cycle
  5-yr median margin, range -4%–19%; latest (¥7.2B) = operating cash ¥7.7B − maintenance capex ¥14.9B
  Industry peers: median 8%
  What this means

  What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's -4% of revenue this year, a 8% median across 5 years.

• Are earnings backed by cash? 0.88×
  Mostly cash-backed
  Cash from ops ¥7.7B ÷ net income ¥8.7B
  What this means

  How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

• Where do the earnings go? —
  No surplus to allocate
  What this means

  The business didn't generate positive Owner Earnings this year, so any distributions came from the balance sheet or borrowing, not from operations.

• Investing or harvesting? 0.88×
  Maintaining
  Capex ¥14.9B ÷ depreciation ¥16.9B
  What this means

  Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Durability & moat, 2022–2026

Whether the record’s returns held, and what the capital reinvested earned.

• Profitable years 5 of 5
  What this means

  Never lost money over the record, the earnings stability Graham insisted on.

• Return on capital ≥ 15% 3 of 3 yrs
  What this means

  A moat shows up as a high return on invested capital that holds year after year, not one good vintage.

• Operating margin 9% → 10% (2-yr avg ends)
  What this means

  Through the cycle the operating margin held roughly steady — about 9% early, 10% lately, median 11%.

• Reinvestment, incremental ROIC returns capital
  What this means

  The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.

• Owner earnings growth −4%/yr
  What this means

  Owner earnings shrank about 4% a year over the record.

• Worst year 2026 · 6.2% op. margin
  What this means

  Stayed profitable even in its hardest year, the resilience that survives recessions.

• Dividend record paid
  What this means

  Paid a dividend in 3 of the years on record.