CCI Group,Inc. FY2026 FY Earnings Report

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Executive Summary

For the fiscal year ended March 2026, the Company posted substantial increases in revenue and earnings, primarily due to the sharp expansion in securities investment business revenue in the banking business. Ordinary revenue was ¥1,671.0B (+86.5% YoY), Ordinary Income was ¥197.6B (+60.6% YoY), and Net Income attributable to owners of the parent was ¥126.3B (+55.5% YoY). Meanwhile, the Ordinary Income margin declined to 11.8% from 13.7% a year earlier, indicating that earnings growth was restrained relative to revenue growth—a defining feature of the current fiscal year.

Factors Behind Changes in Performance

【Revenue】The increase in Ordinary revenue to ¥1,671.0B (+86.5% YoY) was driven by securities investment business revenue of ¥928.8B (+191.8% from ¥318.3B in the previous year). Lending business revenue also expanded to ¥357.2B (+33.9% YoY), while underlying funds management revenue increased as well. By segment, the banking business generated Ordinary revenue of ¥1,517.5B (90.8% of total, +100.5% YoY), while the leasing business generated ¥153.5B (9.2% of total, +10.5% YoY), making banking the primary driver of revenue growth.

【Profit and Loss】Ordinary Income increased to ¥197.6B (+60.6% YoY). Segment income increased in both segments: ¥191.8B for the banking business (+61.5% YoY, 12.6% margin) and ¥5.6B for the leasing business (+26.7% YoY, 3.7% margin). However, funding costs increased to ¥180.9B (+83.6% from ¥98.5B in the previous year), outpacing the growth in funds management revenue (+45.5%) and compressing the Ordinary Income margin. Profit before tax after deducting extraordinary losses of ¥19.2B, including impairment losses of ¥7.2B, which increased from ¥3.5B in the previous year, was ¥178.5B. Consolidated Net Income of ¥129.3B (+53.3% YoY) and Net Income attributable to owners of the parent of ¥126.3B (+55.5% YoY) both increased; overall, the Company achieved higher revenue and earnings.

Segment Analysis

The banking business is the Group’s core business, with Ordinary revenue of ¥1,517.5B (90.8% of total, +100.5% YoY) and segment income of ¥191.8B (97.1% of total, +61.5% YoY, 12.6% margin). The leasing business recorded higher revenue and earnings, with Ordinary revenue of ¥153.5B (9.2% of total, +10.5% YoY) and segment income of ¥5.6B (2.9% of total, +26.7% YoY, 3.7% margin), but there is an approximately 9pt gap in profitability compared with the banking business. The majority of revenue and income is concentrated in the banking business, resulting in a relatively high sensitivity to changes in financial market conditions.

Key Financial Metrics

【Profitability】The Ordinary Income margin was 11.8%, down approximately 1.9pt from 13.7% in the previous year, while the Net Income margin was 7.7%, down approximately 1.5pt from 9.1% in the previous year, indicating a period of margin contraction despite revenue growth. 【Cash Flow Quality】Operating Cash Flow (OCF) was △¥2,558.0B, a substantial deterioration from +¥4,903.7B in the previous year, resulting in a negative OCF multiple relative to Net Income of ¥129.3B. Free Cash Flow was also △¥2,464.4B, indicating that cash generation during the current fiscal year diverged substantially from the level of earnings. 【Investment Efficiency】ROE was 5.1%, while BPS was ¥1,095.51 (+17.3% from ¥933.85 in the previous year). Basic EPS was ¥55.98 (+57.7% YoY from ¥35.50 in the previous year), expanding at a faster pace than Net Income, with share repurchases also making a certain contribution. 【Financial Soundness】The Equity Ratio was 3.9%, total assets were ¥65,367.9B, and net assets were ¥2,537.7B (+14.9% YoY from ¥2,208.9B in the previous year). The low level of equity relative to total assets reflects the structural characteristics of the banking business, but the level remains one that warrants continued monitoring as a capital buffer.

Cash Flow Analysis

Operating Cash Flow (OCF) was △¥2,558.0B, shifting to a substantial net outflow from +¥4,903.7B in the previous year. Although Investing Cash Flow was positive at ¥93.6B, capital expenditures, including the acquisition of tangible and intangible fixed assets, amounted to △¥105.1B. Financing Cash Flow was △¥278.5B, including share repurchases of △¥40.0B and dividend payments. As a result, Free Cash Flow (OCF + Investing Cash Flow) was △¥2,464.4B. Cash and cash equivalents decreased by ¥2,742.8B during the period, leaving a balance of ¥13,679.6B at the end of the period. In the banking business, changes in deposits, loans, and securities have a significant impact on OCF as a structural characteristic of the business. However, the substantial OCF outflow relative to Net Income of ¥129.3B is the most important item to verify in assessing the cash conversion of earnings during the current fiscal year.

Quality of Earnings

The increase in earnings during the current fiscal year depended heavily on the sharp increase in securities investment business revenue, a factor susceptible to market conditions, and should be evaluated separately from an improvement in recurring earnings power. Among non-operating and extraordinary items, extraordinary losses of ¥19.2B, including impairment losses of ¥7.2B, which increased from ¥3.5B in the previous year, contributed to the decline from Ordinary Income to profit before tax of ¥178.5B. Comprehensive income was ¥398.1B, including ¥394.8B attributable to owners of the parent, substantially exceeding Net Income of ¥129.3B. This difference resulted from changes in other comprehensive income, including valuation differences on securities of ¥162.1B and deferred hedge gains or losses of ¥95.4B. The substantial divergence between Net Income and OCF—Net Income of ¥129.3B versus OCF of △¥2,558.0B—indicates that accounting profit on the income statement was not converted into cash flow. The quality of earnings therefore requires verification in light of changes in the structure of funds management and funding.

Earnings Forecasts and Guidance

The full-year Company forecast is Ordinary Income of ¥265.0B (+34.1% YoY), forecast EPS of ¥76.15, and forecast dividends of ¥30.00 (after accounting for the stock split). Current-period Ordinary Income of ¥197.6B represents progress of 74.6% against the forecast, while actual EPS of ¥55.98 represents equivalent progress of 73.5% against forecast EPS. Both are broadly in line with the elapsed portion of the fiscal year. Given the substantial contribution from securities investment business revenue to the actual results, attention should be paid to the possibility that progress during the remaining period may be affected by changes in market conditions.

Shareholder Returns

The Payout Ratio was 41.0%, based on Net Income attributable to owners of the parent, using a single value as the reported Payout Ratio. On October 1, 2025, the Company conducted a 1-for-10 stock split. On a post-split basis, the interim dividend was ¥11 and the year-end dividend was ¥12, for total annual dividends of ¥23 (equivalent to interim dividends of ¥110, year-end dividends of ¥120, and annual dividends of ¥230 before accounting for the split). The Company’s forecast annual dividend of ¥30.00 exceeds the post-split equivalent of the actual annual dividend of ¥23. Share repurchases amounted to ¥4.0B. Together with total dividends of ¥5.18B, total shareholder returns were ¥9.18B, resulting in a Total Return Ratio of approximately 72.7% relative to Net Income attributable to owners of the parent of ¥12.63B. The Payout Ratio of 41.0% and Total Return Ratio of 72.7% are based on different calculation methodologies and should therefore be considered separately. Given Free Cash Flow of △¥2,464.4B, shareholder returns were not funded solely by cash generated during the current fiscal year; a comprehensive assessment including retained earnings of ¥209.78B and other internal reserves is required.

Risk Factors

1. Dependence on securities investment revenue: Securities investment business revenue was ¥928.8B, accounting for 55.6% of Ordinary revenue, resulting in an earnings structure susceptible to the effects of rising interest rates, declining bond prices, and market volatility.

2. Margin pressure from rising funding costs: Funding costs were ¥180.9B, up +83.6% YoY and exceeding the +45.5% growth in funds management revenue. Continued increases in funding costs during the normalization of interest rates could place pressure on interest margins.

3. Substantial OCF outflow: OCF was △¥2,558.0B, diverging substantially from Net Income of ¥129.3B. Trends in fund flows, including deposits, loans, and securities transactions, will be subject to monitoring going forward.

Industry Benchmark (For Reference; Company Research)

Profitability and Returns

The Net Income margin is below the industry median, indicating a relatively low level within the industry in terms of profitability.

Growth and Capital Efficiency

The Revenue growth rate substantially exceeds the industry median, reflecting exceptional growth resulting from the sharp expansion in securities investment business revenue.

※Source: Company research

Key Highlights from the Financial Results

1. Despite substantial increases in revenue and earnings—Ordinary revenue +86.5%, Ordinary Income +60.6%, and Net Income attributable to owners of the parent +55.5%—the Ordinary Income margin declined by approximately 1.9pt. The divergence between the direction of revenue growth and that of the profit margin is a defining feature of the financial results.

2. Securities investment business revenue of ¥928.8B explains the majority of the increase in Ordinary revenue, clearly demonstrating from the data that earnings growth during the current fiscal year was concentrated in a specific revenue source.

3. OCF was △¥2,558.0B against Net Income of ¥129.3B. The substantial divergence between income statement earnings and cash flow is an important fact observable from the financial results data.

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This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly available earnings data. Investment decisions should be made at your own responsibility, and you should consult a professional as necessary.

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