| Metric | Current Period | Prior-Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | - | - | - |
| Operating Income | ¥61.6B | ¥22.9B | +169.5% |
| Ordinary Income | ¥62.4B | ¥24.1B | +159.1% |
| Net Income | ¥43.4B | ¥10.8B | +300.6% |
| ROE | 14.0% | 3.9% | - |
For the cumulative Q2 results for the fiscal year ending March 2026, Revenue (Operating Revenue) was ¥246.1B (not explicitly disclosed in detailed data, estimated from XBRL), Operating Income was ¥61.6B (YoY +¥38.7B, +169.5%), Ordinary Income was ¥62.4B (YoY +¥38.3B, +159.1%), and Net Income attributable to owners of the parent was ¥43.4B (YoY +¥32.6B, +300.6%). Significant profit growth from operating activities was achieved, and an improvement in the effective tax rate (29.2%, down 5.2pt from 34.4% a year earlier) boosted Net Income. Total assets expanded to ¥551.1B (YoY +¥132.1B, +31.5%), and shareholders’ equity rose to ¥310.0B (YoY +¥35.4B, +12.9%), strengthening the financial base through retained earnings accumulation. Operating Cash Flow was ¥40.3B (YoY +¥36.8B, +1064.2%), returning to positive, and Free Cash Flow was ¥17.9B. Basic EPS was 137.32円 (from 47.11円 in the prior period, +191.5%), and ROE rose to 14.0% (improved 8.5pt from 5.5% in the prior period), indicating a substantial recovery in profitability.
[Revenue] Although operating revenue was not explicitly disclosed, the increase in Operating Income to ¥61.6B from ¥22.9B in the prior period (+169.5%) is presumed to reflect expanded commission income and trading revenue alongside an improved securities market environment. SG&A increased to ¥183.5B (from ¥164.8B in the prior period, +11.3%), but growth in gross operating profit far outpaced expense increases, yielding positive operating leverage. As a single-segment company (Investment & Financial Services), regional and product breakdowns are undisclosed, but the structure remains unchanged with domestic sales accounting for over 90%.
[Profit & Loss] The movement from Operating Income of ¥61.6B to Ordinary Income of ¥62.4B was driven by nearly neutral non-operating items (Non-operating income ¥1.0B, Non-operating expenses ¥0.2B), with Investment Partnership gains of ¥0.3B contributing. Relative to Ordinary Income of ¥62.4B, Extraordinary items were a net -¥0.3B (Extraordinary income ¥0.3B from gains on sales of investment securities; Extraordinary losses ¥0.6B including impairment losses), producing Profit before Income Taxes of ¥62.1B. Corporate taxes and other amounts of ¥18.1B (effective tax rate 29.2%) decreased 5.2pt from 34.4% in the prior period; an increase in deferred tax assets (+¥2.9B) helped reduce tax burden. Comprehensive income was ¥48.1B, reflecting Net Income of ¥43.4B plus a ¥4.2B gain related to retirement benefit adjustments. In conclusion, estimated revenue growth and increased profitability at the operating level are evident, and tax rate improvement and stable non-operating items supported profit expansion.
[Profitability] ROE was 14.0% (improved 8.5pt from 5.5% in the prior period), reflecting significant profit growth and accumulation of equity. Operating Income was ¥61.6B, and EBITDA is estimated at ¥66.0B (Operating Income + Depreciation ¥4.4B), implying an EBITDA yield on total assets of approximately 12.0% against Total Assets of ¥551.1B. The tax rate declined to 29.2%, marking an improvement from previously high levels. [Cash Quality] Operating Cash Flow of ¥40.3B versus Net Income of ¥43.4B yields a cash conversion rate of 92.8%, generally favorable; however, OCF/EBITDA is limited to 61.1%, pressured by increases in Accounts Receivable (¥36.4B, up from ¥22.4B, +62.7%) and an increase in bonus reserves (+¥5.7B), which tightened working capital. [Investment Efficiency] Capital expenditures were ¥0.3B, producing a CapEx/Depreciation ratio of 6.8% (Depreciation ¥4.4B), very low, with investment focused on intangible assets (¥4.7B). Asset turnover (Operating Revenue/Total Assets) is estimated at around 0.9x annualized, indicating continued restraint on investments and utilization of existing infrastructure. [Financial Soundness] Equity Ratio was 56.3% (down 9.1pt from 65.4% a year earlier) due to relative change with asset expansion; however, absolute shareholders’ equity increased. Interest-bearing debt is minimal at ¥2.8B (Short-term borrowings ¥2.3B + Long-term borrowings ¥0.5B), Debt/EBITDA is 0.04x, and cash and deposits of ¥178.2B provide ample liquidity, effectively near net cash. The current ratio is 203.8%, indicating strong liquidity, and interest coverage is extremely high at over 205x (EBIT ¥61.6B / Interest expense ¥0.3B).
Operating Cash Flow increased substantially to ¥40.3B (from ¥3.5B, +1064.2%), starting from Profit before Income Taxes of ¥62.1B, with Depreciation of ¥4.4B and increases in provisions of ¥5.9B (Allowance for doubtful accounts ¥0.2B + Bonus reserves ¥5.7B) as positive adjustments. Conversely, increases in retirement benefit assets (-¥6.9B) and expansion of working capital such as Accounts Receivable constrained cash realization. After deducting corporate tax payments of ¥8.0B, the subtotal for Operating CF was ¥47.7B. Investing CF was -¥22.4B, consisting mainly of time deposit placements -¥20.0B, intangible asset acquisitions -¥4.7B (primarily software), and purchases of investment securities -¥1.2B, partially offset by proceeds from sales of securities ¥3.7B and loan recoveries ¥0.1B. Free Cash Flow was ¥17.9B (Operating CF ¥40.3B + Investing CF -¥22.4B). Financing CF was -¥13.2B, driven by dividend payments of ¥14.0B (including interim dividend) and long-term debt repayments -¥0.2B, partially offset by ¥2.3B proceeds from disposal of treasury shares. Cash and cash equivalents rose ¥4.7B from the opening ¥145.0B to ¥149.7B at period-end, maintaining liquidity on hand. The increase in Accounts Receivable (+¥14.0B) lowered the Operating CF/Net Income ratio, and the timing of collections recorded at period-end will be key to cash conversion improvement in the next period.
Against Ordinary Income of ¥62.4B, Net Income was ¥43.4B, yielding an after-tax profit margin of 69.7%, with tax burden reduction contributing to profit growth. Non-operating income was limited to ¥1.0B, comprising Investment Partnership gains ¥0.3B and interest and dividend income ¥0.8B (before Operating CF adjustments), indicating that recurring financial income is the main component. Extraordinary items were a net -¥0.3B, with gains on sales of investment securities ¥0.3B (temporary) and impairment losses ¥0.3B largely offsetting, having little impact on recurring earnings structure. The difference between Comprehensive Income ¥48.1B and Net Income ¥43.4B (¥4.7B) was primarily a ¥4.2B positive adjustment related to retirement benefits, with valuation differences on securities of -¥0.04B as a small negative. Operating CF of ¥40.3B versus Net Income of ¥43.4B gives a cash conversion rate of 92.8%, generally healthy, though increases in Accounts Receivable (+¥14.0B) have raised accruals and created some divergence between reported profits and cash. The bridge from Operating Income to Ordinary Income was nearly neutral on non-operating items, indicating that recovery in core earnings power was the main driver of profit expansion and that earnings quality has improved on a recurring basis.
Annual dividend is ¥89 (interim ¥30, year-end planned ¥59), consisting of a regular dividend of ¥69 and a commemorative dividend of ¥20 for the 75th anniversary. The payout ratio is 72.2% (¥89 dividend against EPS 137.32円), a high level; on a regular dividend basis excluding the commemorative payment, the payout ratio is approximately 50.2%. Total dividends are estimated at approximately ¥28.3B (average shares outstanding during the period 31,987 thousand shares × ¥89), and coverage against Free Cash Flow of ¥17.9B is about 0.63x, indicating dividends are somewhat heavy relative to cash generation. However, with cash on hand of ¥178.2B and a strong financial base, payment capacity concerns are limited. No share buybacks were conducted (acquisition amount ¥0), so total shareholder returns are comprised solely of dividends. The next-period dividend forecast is undecided; because earnings guidance is not disclosed, flexibility remains to adjust returns based on market conditions and realized performance. A return to a normal dividend policy (payout ratio ~50% excluding commemorative dividend) and normalization of working capital leading to FCF improvement are prerequisites for sustainable shareholder returns.
Market Environment Dependence Risk: As a single-segment securities business, the sharp expansion in Operating Income (+169.5%) depends on recovery in commission and trading revenues linked to trading volume and price trends in the equity market. Reductions in retail investor flows, declines in the pipeline of IPO/PO deals, or sudden changes in interest rates could increase revenue volatility and materially affect profit levels in future periods.
Working Capital Management Risk: Accounts Receivable expanded to ¥36.4B (from ¥22.4B, +62.7%), and OCF/EBITDA declined to 61.1%. If collections for period-end receivables are delayed, cash conversion could deteriorate and liquidity could be strained. While ample cash of ¥178.2B supports short-term payment capacity, efficient management of working capital is key to medium-term financial soundness.
Competitive Risk from Investment Restraint: With CapEx of ¥0.3B versus Depreciation of ¥4.4B, the CapEx/Depreciation ratio is very low at 6.8%, indicating restrained investment in IT/digital infrastructure. Although intangible asset acquisitions of ¥4.7B have been made, the scale is small compared with online brokers and major securities firms, posing a risk of competitive disadvantage in customer convenience and operational efficiency over the medium to long term.
No industry benchmark data available
Source: Company aggregation
Sharp recovery in Operating Income (+169.5%) and an improvement in the effective tax rate (29.2%, down 5.2pt from 34.4%) pushed ROE up to 14.0%, significantly improving profitability. The single-segment structure (Investment & Financial Services) remains exposed to market conditions, but operating leverage was positive, and growth in gross operating profit substantially exceeded cost increases. Key items to watch next period are the sustainability of market momentum and progress on collections of Accounts Receivable (+¥14.0B), which will affect cash conversion.
Financial soundness is extremely high with Interest-bearing Debt ¥2.8B, Debt/EBITDA 0.04x, and cash and deposits ¥178.2B, effectively near net cash. The current ratio is 203.8% and Equity Ratio is 56.3%, providing strong downside resilience, but dividends of approximately ¥28B against Free Cash Flow ¥17.9B (payout ratio 72.2%) represent a heavy return burden. Returning to a regular dividend level (payout ratio ~50% excluding commemorative dividend) and normalization of working capital are prerequisites for rebuilding retained earnings and securing investment capacity. With continued restrained CapEx (CapEx/Depreciation 6.8%), accelerating IT and digital investment is a challenge to maintain competitiveness.
This report was automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in specific securities. Industry benchmarks are reference information compiled by our firm based on publicly available financial statements. Investment decisions are your responsibility; consult a professional advisor if necessary.