Monex Group,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥40.40B
• Net Income: ¥4.43B
• EPS: ¥18.09

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Monex Group (8698) reported FY2026 Q2 consolidated IFRS results with revenue of 403.97 and net income of 45.49 (both in 100M JPY). Pre-tax profit was 76.58, implying a pre-tax margin of roughly 18.9% against revenue, and an effective tax rate of 11.5%. Net profit margin was 11.3%, while DuPont decomposition indicates ROE of 3.8%, driven by modest profitability, very low asset turnover (0.053x), and high financial leverage (6.36x). Equity stood at 1,193.84, with an equity ratio of 15.5% and a balance sheet structure typical of a financial services group. Debt-to-equity was 4.89x, reflecting the leverage inherent in the business model, though detailed interest-bearing debt and maturity profiles were not disclosed in the dataset. SG&A expenses were 279.62, equating to 69.2% of revenue, suggesting meaningful operating cost intensity and limited operating leverage buffer in weaker volume environments. EPS (basic) was 18.09 yen, with diluted EPS of 15.72 yen, and BVPS was calculated at 474.94 yen, underscoring a modest earnings yield on book. Equity-method income contributed 12.85, providing a supportive non-operating uplift. Cash and equivalents were 534.67, though operating, investing, and financing cash flow statements were not disclosed, constraining assessment of earnings-to-cash conversion. Net income grew 12.3% YoY, indicating improved bottom-line momentum despite incomplete disclosure of operating line items. The reported payout ratio (calculated) of 224.7% appears elevated relative to earnings for the period, raising questions on dividend sustainability absent stronger free cash flow data. The low effective tax rate suggests geographic and business mix benefits or tax-effect items; however, the large gap between pre-tax profit and net income beyond tax points to non-controlling interests or other below-the-line effects. With asset turnover at 0.053x, capital efficiency remains a key constraint on ROE despite leverage. Overall, profitability is positive and improving YoY, but quality-of-earnings and dividend sustainability cannot be fully validated without cash flow disclosure. Key monitoring items include trading volumes, net financial income, crypto-related spreads/volumes, cost discipline, and capital adequacy. Data limitations are significant for cost structure details, liquidity metrics, and cash flow quality.

Profitability Analysis

roe_decomposition: ROE 3.8% = Net margin 11.3% × Asset turnover 0.053 × Financial leverage 6.36x. The modest margin and very low turnover largely cap ROE, with leverage providing most of the lift. margin_quality: Net margin of 11.3% and pre-tax margin of ~18.9% (76.58/403.97). Effective tax rate is low at 11.5%, aiding bottom line. Equity-method income (12.85) supports profitability. Operating and gross margins are unreported, limiting granularity; however, SG&A is 69.2% of revenue, indicating a high cost-to-income base. operating_leverage: With SG&A at 279.62 versus revenue of 403.97, incremental margins are sensitive to revenue swings. Given the cost intensity, positive volume/fee leverage could expand margins, while revenue softness would compress profitability quickly. Lack of D&A prevents EBITDA analysis.

Growth Assessment

revenue_sustainability: Revenue printed at 403.97; without YoY disclosure, sustainability cannot be precisely gauged. As a brokerage/financial platform group, revenue is sensitive to market volumes, asset prices, FX/interest rate environment, and crypto activity. profit_quality: Net income rose 12.3% YoY to 45.49, helped by low tax rate and equity-method gains (12.85). The sizable delta between PBT (76.58) and NI (45.49) beyond taxes points to NCI/other adjustments, warranting scrutiny of recurring after-tax earnings power. outlook: Assuming stable market activity and continued contribution from equity-method investments, near-term earnings can hold; however, volatility in trading/crypto volumes and interest rate shifts could drive meaningful quarter-to-quarter swings.

Financial Health

liquidity: Cash and equivalents of 534.67 provide a cushion, but absence of current asset/liability data precludes current or quick ratio analysis. As a financial group, liquidity also depends on undislosed client funds and market funding lines. solvency: Total assets 7,589.18, liabilities 5,833.87 (liability ratio ~76.9%), equity 1,193.84 (equity ratio 15.5%). Debt-to-equity is 4.89x, consistent with leveraged financial models; detailed debt composition/maturity is not disclosed. capital_structure: High leverage (financial leverage 6.36x) underpins ROE but increases sensitivity to earnings volatility and market shocks. Equity base equates to BVPS ~474.94 yen with 251.47 million average shares.

Cash Flow Quality

earnings_quality: Operating CF, investing CF, and free cash flow were unreported, preventing OCF/NI and FCF analyses. The low effective tax rate and reliance on equity-method income suggest some non-core support to earnings. fcf_analysis: Not determinable due to missing OCF and capex data. Capital expenditures and working capital movements are unreported. working_capital: Line-item data (AR, AP, inventories) are unreported, so working capital trends and cash conversion cannot be assessed.

Dividend Sustainability

payout_ratio_assessment: Calculated payout ratio is 224.7%, which is high relative to reported H1 earnings and not typically sustainable absent special factors. DPS data are unreported. fcf_coverage: FCF coverage cannot be assessed due to missing OCF and capex data. Without cash flow evidence, ability to fund dividends internally is unclear. policy_outlook: Given elevated payout and earnings volatility inherent in the business, dividend policy likely remains flexible and sensitive to full-year results, capital needs, and regulatory considerations.

Risk Assessment

Business Risks:

• Revenue dependence on market volumes and volatility across equities, FX, and crypto
• Fee compression and competitive pressure in online brokerage and asset management
• Regulatory changes across jurisdictions impacting leverage, client asset segregation, and crypto operations
• Technology and cybersecurity risks affecting trading platforms
• Reputational risk from operational incidents or compliance failures

Financial Risks:

• High leverage (debt-to-equity 4.89x; financial leverage 6.36x) amplifies earnings swings
• Liquidity and funding risk typical of financial institutions, with limited disclosure on funding mix
• Earnings volatility given low asset turnover (0.053x) and high SG&A intensity (69.2% of revenue)
• Exposure to low effective tax rate normalization, which could pressure net margins
• Potential NCI or below-the-line items causing divergence between PBT and net income

Key Concerns:

• Sustainability of dividend with a calculated payout ratio of 224.7%
• Absence of operating cash flow disclosure to validate earnings quality
• Sensitivity to market and crypto activity for revenue generation

Investment Implications

Key Takeaways:

• Net income up 12.3% YoY to 45.49 with supportive low tax rate and equity-method gains
• ROE at 3.8% constrained by very low asset turnover; leverage provides most of the lift
• SG&A at 69.2% of revenue indicates tight operating leverage; execution on costs is critical
• Equity ratio of 15.5% and D/E 4.89x align with a leveraged financial model
• Dividend sustainability is questionable given a calculated payout ratio of 224.7% without FCF data

Metrics to Watch:

• Client assets and trading volumes across securities and crypto
• Net financial income/commissions and cost-to-income ratio
• Operating cash flow and free cash flow once disclosed
• Capital adequacy/equity ratio trajectory and liquidity buffers
• Effective tax rate and contributions from equity-method investments

Relative Positioning: Within online brokerage/crypto-exposed financial groups, Monex exhibits moderate profitability aided by leverage and non-core income, but capital efficiency is limited and cash flow disclosure gaps constrain assessment versus peers who provide clearer cost and cash metrics.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis