3401 · Teijin

Will it survive?

• Can it pay its interest? -10.4×
  Does not cover its interest
  Operating income (¥70.7B) ÷ interest expense ¥6.8B
  What this means

  A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.

• How heavy is the debt, net of cash? ¥231.9B
  Net debt against an operating loss
  Cash ¥104.5B − debt ¥336.4B
  What this means

  Netting ¥104.5B of cash and short-term investments against ¥336.4B of debt leaves ¥231.9B owed, with no operating profit this year to measure it against — understand that combination before anything else about the company. 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 4%
  Below average through the cycle
  10-yr median, range -9%–9%; -9% latest = NOPAT (¥55.9B) ÷ invested capital ¥596.4B
  Industry peers: median 16%
  What this means

  The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran -9% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.

• Owner-earnings margin 3%
  Thin through the cycle
  10-yr median margin, range 0%–6%; latest ¥45.1B = operating cash ¥98.7B − maintenance capex ¥53.5B
  Industry peers: median 2%
  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 5% of revenue this year, a 3% median across 10 years.

• Are earnings backed by cash? ¥98.7B
  Loss, but cash-generative
  Net income (¥88.0B) · cash from operations ¥98.7B
  What this means

  The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did.

How is the cash used?

• Where do the earnings go? 21%
  Reinvests most of it
  Dividends + buybacks ¥9.6B ÷ Owner Earnings ¥45.1B
  What this means

  Of ¥45.1B Owner Earnings, ¥9.6B (21%) went back to shareholders, ¥9.6B dividends, ¥5M buybacks. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.

• Investing or harvesting? 0.89×
  Maintaining
  Capex ¥53.5B ÷ depreciation ¥60.3B
  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, 2017–2026

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

• Profitable years 6 of 10
  What this means

  Lost money in 4 year(s), look at what happened there before trusting the average.

• Return on capital ≥ 15% 0 of 10 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 8% → −5% (3-yr avg ends)
  What this means

  Through the cycle the operating margin slipped — about 8% early to −5% lately, median 5% — competition or costs are biting in.

• 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 −3%/yr
  What this means

  Owner earnings shrank about 3% a year over the record.

• Worst year 2026 · −8.1% op. margin
  What this means

  Operations went underwater in 2026, understand why before trusting the good years.

• Share count +0.1%/yr
  What this means

  Roughly flat share count, little dilution, little buyback.

• Dividend record rising
  What this means

  Paid and raised the dividend across the record, the continuity Graham prized.