| Metric | Current Period | Same Period of Previous Year | YoY |
|---|---|---|---|
| Revenue | - | - | - |
| Operating Income | ¥17.5B | ¥4.0B | +342.6% |
| Ordinary Income | ¥20.7B | ¥6.7B | +208.1% |
| Net Income | ¥14.1B | ¥13.8B | +2.1% |
| ROE | 2.6% | 2.7% | - |
In Q1, the Company recorded a substantial increase in profit from the operating level, driven by the recovery in commissions received and trading revenue, its core businesses. A key feature was the improvement in its earnings structure, shifting from reliance on extraordinary income in the same period of the previous year to operating-business-led profit growth. Operating Income increased substantially to ¥17.5B (¥4.0B in the previous year, YoY +342.6%), while Ordinary Income rose to ¥20.7B (¥6.7B in the previous year, YoY +208.1%). Net Income, however, increased only modestly to ¥14.1B (¥13.8B in the previous year, YoY +2.1%), owing to the反動 from the recognition of ¥10.3B in extraordinary income in the same period of the previous year. Profit Before Tax nevertheless increased steadily to ¥20.6B (¥17.0B in the previous year, YoY +21.1%).
【Revenue】Although Revenue (operating revenue) itself is not disclosed, the Company’s earnings are centered on commissions received, trading gains and losses, and financial revenue, which are derived from fluctuations in the equity and bond markets. The background to the substantial year-on-year increase of +342.6% in Operating Income is believed to be the recovery in commission and trading revenue resulting from improved market conditions. SG&A expenses were ¥44.9B, up +13.5% from ¥39.6B in the previous year; however, the expansion in revenue significantly exceeded this increase, resulting in strong operating leverage.
【Profit and Loss】Ordinary Income was boosted by non-operating income of ¥3.2B (¥2.8B in the previous year), while non-operating expenses remained virtually zero. Corporate income taxes of ¥6.5B were recognized against Profit Before Tax of ¥20.6B, resulting in an effective tax rate of 31.5% (18.7% in the previous year). In the same period of the previous year, the one-time factor of ¥10.3B in extraordinary income boosted Net Income, whereas extraordinary losses in the current period were ¥0.04B and therefore largely neutral. The limited growth in Net Income was primarily attributable to the反動 from the previous year. In conclusion, the Company is in a phase of substantial profit growth driven by the recovery of its core business, and the quality of earnings has improved from the previous year.
【Profitability】Operating Income of ¥17.5B and Ordinary Income of ¥20.7B increased substantially from the previous year by +342.6% and +208.1%, respectively. The effective tax rate rose to 31.5% from 18.7% in the previous year, reflecting the normalization of the apparently low tax rate associated with the recognition of extraordinary income in the previous year.【Cash Quality】Although a statement of cash flows is not disclosed, Cash and Deposits increased to ¥463.4B (¥355.9B in the previous year, +30.3%), indicating continued accumulation of internally generated funds.【Investment Efficiency】ROE was 2.6%, BPS was ¥802.12 (¥773.66 in the previous year, +3.7%), and EPS was ¥21.31 (¥20.92 in the previous year, +1.9%), indicating that the pace of growth in net assets was broadly in line with earnings growth.【Financial Soundness】The Equity Ratio was 51.9%, down from 58.2% in the previous year. This was because Total Assets expanded by +16.3% due to increases in cash and investment securities, while the growth in net assets (+3.7%) failed to keep pace. The Current Ratio was 177.6%, calculated as Current Assets of ¥746.5B divided by Current Liabilities of ¥420.2B, indicating a high level of short-term payment capacity.
As the statement of cash flows is not disclosed, cash trends are analyzed based on changes in the balance sheet. Cash and Deposits increased by ¥107.5B (+30.2%) to ¥463.4B from ¥355.9B in the previous year, indicating continued accumulation of funds. At the same time, investment securities increased by ¥43.7B (+25.2%) to ¥217.4B from ¥173.7B in the previous year, showing expansion in both on-hand liquidity and investment assets. Property, plant and equipment was ¥31.8B, largely unchanged from ¥32.4B in the previous year, and no major capital investment was observed. Current Liabilities increased by +34.5% to ¥420.2B from ¥312.4B in the previous year; however, the cash balance was substantially higher than this amount, limiting concerns regarding liquidity management. Given the asset-light nature of the business, the accumulation of internally generated funds can be evaluated as being at a healthy level.
The Company’s earnings for the current period were less dependent on one-time factors than in the previous year, indicating an improvement in the quality of earnings. Whereas ¥10.3B in extraordinary income was recognized in the same period of the previous year, extraordinary losses in the current period were limited to ¥0.04B. Profit Before Tax of ¥20.6B therefore largely reflected the underlying performance at the ordinary income level. Non-operating income was ¥3.2B (¥2.8B in the previous year), while non-operating expenses were virtually zero, with little change in the structure whereby financial revenue boosts Ordinary Income. Corporate income taxes were ¥6.5B, resulting in an effective tax rate of 31.5%, returning to a normalized level from 18.7% in the previous year (an apparently low tax rate associated with the recognition of extraordinary income). Depreciation and amortization was ¥1.3B within SG&A expenses, a relatively small amount, and no factor that would materially distort the quality of earnings from an accrual perspective was identified.
The Company has adopted a policy of not disclosing earnings forecasts, citing the high volatility of the securities markets and the possibility that discrepancies between forecasts and actual results could adversely affect investment decisions. Instead, it continues to disclose preliminary figures once its earnings figures are substantially finalized. Accordingly, no analysis of the progress rate against the Full-Year plan has been conducted.
For the previous fiscal year (fiscal year ended March 2026), dividends consisted of an interim dividend of ¥32 (regular ¥17, special ¥15) and a year-end dividend of ¥38 (regular ¥23, special ¥15). For the current fiscal year (fiscal year ending March 2027), the continuation of the ¥15 special dividend has been indicated for both the interim and year-end dividends, while the regular dividend remains undecided for both periods. As the amount of the regular dividend has not been finalized, the Payout Ratio has not been calculated. Given the financial foundation of an Equity Ratio of 51.9% and Cash and Deposits of ¥463.4B, the Company is believed to have room to continue shareholder returns, including special dividends.
Market-Linked Risk: Commissions received, trading gains and losses, and financial revenue, which form the pillars of operating revenue, are strongly linked to fluctuations in the equity and bond markets. The substantial increase of +342.6% in Operating Income for the current period was supported by improved market conditions, and a decline in trading value or volatility could result in a反動 decline.
Investment Securities Price Fluctuation Risk: Investment securities increased to ¥217.4B (¥173.7B in the previous year, +25.2%). In conjunction with this increase, valuation differences on available-for-sale securities expanded to ¥134.1B (¥104.2B in the previous year), while deferred tax liabilities increased to ¥64.2B (¥47.4B in the previous year). A decline in market prices could reduce other comprehensive income and equity.
Cost Rigidity Risk: SG&A expenses increased by +13.5% year on year to ¥44.9B. Although revenue growth exceeded this increase and operating leverage was effective in the current period, the limited flexibility of SG&A expenses during deteriorating market conditions could put pressure on profit margins.
Although the ¥10.3B in extraordinary income recognized in the same period of the previous year was no longer present, Operating Income and Ordinary Income increased substantially due to the recovery of the core business, indicating that the quality of profit growth has improved from the previous year.
The increase in investment securities and valuation differences has heightened the sensitivity of equity to market fluctuations, which will be an important monitoring point in assessing financial soundness.
Regarding dividends, the Company has indicated a policy of continuing the ¥15 special dividend, while the regular dividend remains undecided. The full-year level of shareholder returns will therefore need to await the finalization of future earnings.
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release 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, after consulting with professionals as necessary.
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