YUTAKA TRUSTY SECURITIES CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Operating Income: ¥1.93B
• Net Income: ¥1.16B
• EPS: ¥259.11

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Disclaimer

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

AI Financial Analysis

Executive Summary

Toyotrusty Securities (8747) reported solid profitability for FY2026 Q2 (cumulative) under JGAAP on a consolidated basis, with operating income of ¥1,928m (+20.2% YoY) and net income of ¥1,469m (+26.2% YoY). Despite many line items showing as zero due to disclosure taxonomy (not actual zeros), the available figures indicate improved earnings momentum in the first half. Ordinary income reached ¥1,981m, implying stable non-operating contributions relative to operating profit. Depreciation was modest at ¥75.8m, consistent with a relatively light asset base for a securities broker. Using period-end equity of ¥14,916m, simple H1 ROE is approximately 9.9% (unannualized), signaling efficient equity use given the industry’s high leverage model. Period-end leverage (assets/equity) is 11.3x (¥168,154m / ¥14,916m), normal for the sector but indicative of sensitivity to market and funding conditions. Liquidity appears adequate with a current ratio of 108.5% and positive working capital of ¥9,391m, important given large current assets and liabilities typical of brokers. Operating cash flow was negative at -¥1,789m despite positive earnings, pointing to working capital absorption (e.g., settlement receivables/payables or margin-related items), a common dynamic in this industry. The OCF/Net income ratio of -1.22 underscores timing impacts rather than necessarily poor earnings quality, but it warrants monitoring if persistent. Income tax expense of ¥616m implies an effective tax rate of roughly 29–30% on a pre-tax basis consistent with Japanese statutory levels. Equity ratio is mechanically about 8.9% (equity/assets), despite the reported 0.0% field being unreported data. Dividend data are not disclosed (DPS and payout appear as zero placeholders), so payout policy remains unclear from this release. No interest expense was disclosed, which likely reflects classification differences rather than an absence of funding costs in a broker-dealer context. Overall, profitability improved meaningfully YoY, balance sheet leverage is high but typical, and liquidity looks sufficient. The key watchpoint is the negative operating cash flow driven by working capital swings amid market conditions. Outlook will hinge on trading volumes, commission income, and market-related revenues in H2.

Profitability Analysis

ROE_decomposition: Using available data, Net profit (¥1,469m) / period-end equity (¥14,916m) ≈ 9.9% for the first half (unannualized). Asset turnover and net margin cannot be reliably computed from the reported zeros for revenue; securities firms often report operating revenues under commissions/trading gains rather than the generic "revenue" header. Financial leverage = assets/equity ≈ 11.3x (¥168,154m / ¥14,916m). ROA (NI/assets) ≈ 0.87% for H1 (unannualized), implying annualized ROA around 1.7% if conditions persist. margin_quality: Operating income margin cannot be calculated without operating revenue. However, the 20.2% YoY increase in operating income and 26.2% YoY increase in net income suggest better operating efficiency and/or stronger top-line drivers (commissions, trading, or fees). Effective tax rate estimated at ~29.5% (¥616m tax / ~¥2,085m pre-tax). operating_leverage: The stronger growth in net income versus operating income indicates some operating leverage and/or improved non-operating balance. Low D&A (¥76m) suggests cost structure is predominantly variable/fixed personnel and systems; incremental volumes can translate efficiently into profits. Absent revenue disclosure, precise elasticity cannot be quantified.

Growth Assessment

revenue_sustainability: Revenue line is unreported in this dataset; sector context implies reliance on brokerage commissions, underwriting/IB fees, and trading-related income. Sustainability depends on market volumes, client activity, and spreads. The YoY profit growth indicates favorable H1 market conditions and/or share gains. profit_quality: Net income growth (+26.2% YoY) outpaced operating income growth (+20.2%), implying either improved cost discipline, better product mix, or supportive non-operating items. The estimated tax rate near statutory norms supports earnings quality. However, negative OCF indicates working capital absorption; need to confirm that cash outflow is timing-related rather than structural. outlook: If market activity remains solid in H2, earnings momentum could continue, but results are inherently sensitive to volatility, equity market turnover, and client risk appetite. Monitoring trading volumes, commission income, and client assets under custody will be key for assessing continuation of growth.

Financial Health

liquidity: Current assets ¥119,790m vs current liabilities ¥110,399m yields a current ratio of 108.5% and working capital of ¥9,391m. This is acceptable for a broker with significant settlement balances. Cash and equivalents are not disclosed in this dataset. solvency: Total liabilities ¥112,061m vs equity ¥14,916m implies a debt-to-equity ratio of ~7.51x and equity ratio ~8.9%. Leverage is high but typical for securities firms. No interest expense disclosed in this extract; funding costs may be embedded under different line items. capital_structure: Assets ¥168,154m funded predominantly by short-term liabilities and equity. Equity base appears stable enough to support current activity, but capital buffers should be monitored against regulatory requirements and market risk exposures.

Cash Flow Quality

earnings_quality: Positive earnings with negative operating cash flow (-¥1,789m) produces an OCF/NI ratio of -1.22. For a broker, this often reflects shifts in receivables/payables related to client trading and margin balances rather than accrual-based earnings issues. FCF_analysis: Investing CF is unreported and Capex is embedded in the data; with OCF negative and investing CF not disclosed, a precise Free Cash Flow figure cannot be assessed. The provided FCF = 0 is a placeholder; actual FCF is likely negative for the half due to negative OCF. working_capital: The negative OCF likely stems from working capital expansion (settlement receivables, trading assets, or collateral movements). Given working capital is positive (¥9,391m), liquidity headroom exists, but sustained outflows would pressure financing needs.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout ratio are shown as zero due to non-disclosure. Without DPS or declared interim dividend, payout capacity cannot be quantified. Based on earnings, capacity exists, but policy and regulatory capital needs are determinative. FCF_coverage: With OCF negative and investing CF undisclosed, FCF coverage of dividends cannot be evaluated for this period. The provided FCF coverage of 0.00x is not meaningful as it reflects unreported items. policy_outlook: Dividend policy is unspecified in this dataset. For securities firms, payouts typically balance earnings cyclicality and capital adequacy; any resumption or change would likely depend on full-year results and capital position.

Risk Assessment

Business Risks:

• Market volume dependency: revenues tied to client trading activity and equity market turnover
• Market risk and volatility affecting trading and inventory positions
• Fee compression and competitive pressure across brokerage and IB services
• Regulatory and capital requirement changes impacting business model and payouts
• IT/cybersecurity risks given digital trading platforms and client data
• Client concentration or exposure to specific investor segments

Financial Risks:

• High balance sheet leverage inherent to the brokerage model (assets/equity ~11.3x)
• Working capital volatility driving swings in operating cash flow
• Funding/liquidity risk tied to short-term liabilities and settlement cycles
• Valuation risk on trading assets and potential fair value losses
• Counterparty credit risk in margin lending or derivative exposures

Key Concerns:

• Negative operating cash flow in H1 despite strong earnings
• Limited disclosure on revenue mix and cash balances in this dataset
• Sensitivity of H2 earnings to market conditions and client activity

Investment Implications

Key Takeaways:

• Earnings momentum strong: operating income +20.2% YoY, net income +26.2% YoY
• Leverage high but typical; equity ratio ~8.9%, debt-to-equity ~7.5x
• Liquidity satisfactory with current ratio 108.5% and working capital ¥9.4bn
• Operating cash flow negative (-¥1.79bn), likely driven by working capital
• Tax rate near statutory (~29–30%), supporting earnings quality

Metrics to Watch:

• Client trading volumes and commission income trajectory
• Operating cash flow and working capital movements (settlement balances, margin)
• Capital adequacy ratios and equity base vs. risk-weighted exposures
• Non-operating gains/losses and trading results contribution
• Expense discipline (personnel and systems) and operating leverage in H2

Relative Positioning: Within Japanese securities brokers, the company shows healthy H1 profitability with sector-typical leverage and liquidity. The main differentiator will be stability of cash generation and resilience of fee/trading income versus peers amid market volatility.

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
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