MATSUI SECURITIES (8628) FY2026 Q3 Earnings Report

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Executive Summary

For the nine months ended Q3 of the fiscal year ending March 2026, Operating Income, Ordinary Income, and Net Income all increased by more than 30%, driven by active equity market conditions. Operating Income was ¥16.51B (¥12.48B in the same period of the previous year, YoY +32.3%), Ordinary Income was ¥16.91B (¥12.43B in the previous year, YoY +36.0%), and Net Income was ¥11.07B (¥8.48B in the previous year, YoY +30.5%). The primary factors behind the earnings growth were an increase in commissions received accompanying the expansion in equity trading value and growth in trading gains and losses. The earnings growth rate exceeded the 16.6% increase in SG&A expenses, indicating an improvement in operating leverage.

Factors Driving Earnings Changes

【Revenue】Commissions received increased to ¥18.1B (up +19% YoY), trading gains and losses increased to ¥4.4B (up +45% YoY), and financial income and expenses increased to ¥12.5B (up +24% YoY). The primary driver was increased trading activity among individual investors against the backdrop of equity trading value of ¥51.1T (up +26% YoY). Only futures and options declined, decreasing to ¥0.76B (down -9% YoY).

【Profitability】Operating Income increased 32.3% and Ordinary Income increased 36.0%, as expense growth did not keep pace with revenue growth, resulting in improved profit margins. Ordinary Income included ¥0.62B in gains from investment business partnership funds, incorporating market-linked revenue. Extraordinary losses of ¥1.18B exceeded extraordinary gains of ¥0.21B, causing Profit Before Tax to be ¥0.97B below Ordinary Income. This difference in extraordinary gains and losses is considered to be largely attributable to temporary factors, and the divergence between Ordinary Income and Net Income was caused by extraordinary losses. Overall, the company delivered revenue and profit growth.

Segment Analysis

Although segment information has not been disclosed, commissions received of ¥18.1B represented the largest component by revenue category and corresponded to the “core business.” Trading gains and losses of ¥4.4B (up +45% YoY) and financial income and expenses of ¥12.5B (up +24% YoY) made increasing contributions to earnings growth, with the expansion of returns from investing customer deposits in a rising interest-rate environment being a particularly important driver. Although the futures and options business maintained a 20% market share, its revenue declined year on year, highlighting the gap in growth rates relative to other revenue categories.

Key Financial Indicators

Profitability: ROE (annualized) was 19.0%, and the Equity Ratio was 6.0%.
Cash flow quality: Not subject to evaluation because Operating Cash Flow data has not been disclosed.
Financial soundness: The current ratio was 105.0%, the D/E ratio was 15.53x, and the short-term liabilities ratio was 100.0%, reflecting the highly leveraged structure characteristic of the securities industry.
Per-share indicators: EPS was ¥42.98 (¥32.94 in the previous year, YoY +30.5%), and BPS was ¥300.23.

Cash Flow Analysis

Detailed figures from the statement of cash flows were not included in the disclosed data. Cash and deposits increased slightly to ¥68.47B (¥67.37B in the previous year).

Earnings Quality

Profit Before Tax was ¥15.93B versus Ordinary Income of ¥16.91B, a difference of ¥0.97B below Ordinary Income (5.7% of Ordinary Income). The primary reason for the difference was the temporary factor of extraordinary losses of ¥1.18B exceeding extraordinary gains of ¥0.21B. Of ¥0.65B in non-operating income, ¥0.62B consisted of gains from investment business partnership funds, which are market-linked revenues; this should be taken into consideration. Net Income of ¥11.07B represents the level remaining after deducting income taxes and other taxes of ¥4.86B from Profit Before Tax of ¥15.93B, resulting in an effective tax rate of approximately 30.5%, close to the normal level.

Earnings Forecast and Guidance

The full-year earnings forecast has not been disclosed (has_forecast: false), and therefore the progress rate cannot be calculated. According to the PDF materials, the year-end dividend is scheduled to be announced in late February.

Shareholder Returns

The Q2 dividend was ¥25 per share. Based on 259.26 million shares issued, the equivalent dividend amount was approximately ¥6.48B, resulting in a Payout Ratio of 58.6% against cumulative Q3 Net Income of ¥11.07B. According to the PDF materials, the basic dividend policy is a Payout Ratio of at least 60% and DOE of at least 8%. As of Q3, DOE was 16.5% and ROE was 16.8%, both exceeding the targets. As no share repurchase program was identified in the disclosed data, the Payout Ratio is used to indicate the status of shareholder returns.

Catalysts

【Short term】The year-end dividend scheduled to be announced in late February and the impact of changes in the policy interest rate on returns from investing customer deposits (the PDF materials state that a +25bp change in the policy interest rate is expected to increase annual revenue by ¥0.65B). 【Long term】Entry into the insurance agency business and development of face-to-face channels targeting non-investor segments through the capital and business alliance with Agent IGH (investment of approximately ¥0.95B and voting rights ratio of 27.4%).

Industry Benchmark (For Reference; Compiled by the Company)

No industry benchmark data available
Source: Compiled by the company

Risk Factors

1. Market volatility risk: Because commissions received and trading gains and losses, the company’s core revenue sources, are linked to equity trading value (¥51.1T, up +26% YoY), a decline in commission and trading revenue is expected when market volatility decreases.

2. Financial leverage risk: The funding structure is biased toward short-term financing, with a D/E ratio of 15.53x and a short-term liabilities ratio of 100.0%, while the cash/short-term liabilities ratio remains at only 0.26x. The impact on liquidity during periods of market stress must be monitored.

3. Temporary gains and losses risk: Extraordinary losses of ¥1.18B exceeded extraordinary gains of ¥0.21B, reducing Profit Before Tax by ¥0.97B. If similar non-recurring items recur, they could become a source of fluctuations in Net Income.

Key Takeaways from the Earnings Results

1. The 32.3% increase in Operating Income exceeded the 16.6% increase in SG&A expenses, confirming an improvement in operating leverage. As long as the expansion in equity trading value continues, this structure should contribute to earnings growth.

2. Ordinary Income includes ¥0.62B in market-linked revenue from gains on investment business partnership funds. Accordingly, the increase in Ordinary Income does not necessarily indicate a corresponding improvement in sustainable earnings power.

3. The Payout Ratio of 58.6% was slightly below the 60% guideline. Together with DOE of 16.5% and ROE of 16.8% disclosed in the PDF materials, this provides confirmation of the implementation of the shareholder return policy against the backdrop of earnings growth.

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This report is an earnings analysis document automatically generated by AI through the integrated analysis of XBRL earnings summary data and PDF earnings presentation materials. It does not recommend investment in any specific security. Industry benchmarks are reference information compiled by the company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, and you should consult a professional as necessary.

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