Ichiyoshi Securities : EARNINGS REPORT FOR FIRST QUARTER OF FISCAL 2021

Released on July 29, 2021

(English translation for reference purposes only)

EARNINGS REPORT FOR FIRST QUARTER OF FISCAL 2021

（April 1 to June 30, 2021）

(Consolidated under Japanese GAAP)

Name of Company: Ichiyoshi Securities Co., Ltd.

Listed on: Tokyo Stock Exchange (1st Section) (Stock code: 8624)

Corporate representative: Mr. Hirofumi Tamada, President & Representative Executive Officer

Inquiry to: Mr. Shoichi Yamazaki, Managing Executive Officer & Chief Supervisor for Finance and

ManagementTel: [phone] (URL http://www.ichiyoshi.co.jp/)

Date of filing First Quarter Report: August 12, 2021 (scheduled)

Supplementary documents for quarterly earnings: Provided.

Quarterly earnings-reporting meeting: None.

(Figures less than one million yen are discarded)

1. Outline of Consolidated Business Result for First Quarter of Fiscal 2021 (from April 1 to June 30, 2021)

1. Highlights of consolidated business result (in millions of yen except for per-share figures)

(% shows year-on-year change)

		Operating			Net operating	Operating		Current
		Revenue	(%)		Revenue	(%)	Income	(%)	Income	(%)
First quarter of fiscal 2021	5,164	(+35.5)		5,151		(+35.8)	882	---	937	---
First quarter of fiscal 2020	3,811	---		3,792		(-10.1)	-381	---	-365	---
		Net income attributable to		Earnings per share	Earnings per share
		owners of parent	(%)				fully diluted
First quarter of fiscal 2021		785		---		21.75yen			21.69yen
First quarter of fiscal 2020		-401		---		-11.15yen			---
Notes: (i) Comprehensive	income: For the first	quarter of fiscal 2021: 730	million yen ( -- )
			For the first quarter of fiscal 2020: -296 million yen ( -- )

(ii)Effective as from the beginning of the first quarter of fiscal 2021, "Accounting Standards Concerning Revenue Recognition" (Corporate Accounting Standards No. 29, dated March 31, 2020) have been applied. Figures relating to operating revenue for the first quarter of fiscal 2020 in the table above are retroactively adjusted in accordance with the said accounting standards. Hence, year-on-year changes for the first quarter of fiscal 2020 are not inserted.

(2) Consolidated financial condition		(in millions of yen)
	Total assets	Net assets	Equity ratio
As of June. 30, 2021	49,919	29,090	58.2%
As of Mar. 31, 2021	49,211	29,108	59.0%

Note: Shareholders' equity: As of June 30, 2021: 29,074 million yen

As of March 31, 2021: 29,030 million yen

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2 Dividends

	First quarter-end	Second	Third quarter-end	Fiscal year-end	Total
		quarter-end
Fiscal 2020 ended	---	15.00yen	---	19.00yen	34.00yen
March 31, 2021
Fiscal 2021 ended	---	****	---	****	****
March 31, 2022

Notes: (i) Ichiyoshi Securities Co., Ltd. (the "Company") declares dividends payable to shareholders of record as of September 30 (semiannual dividends) and March 31 (final dividends) of each fiscal year, but not to shareholders as of June 30 and December 31 of each fiscal year.

1. It is not the Company's practice to give an earnings or dividend forecast. Hence, ****.

3. Outlook for Business Result for Fiscal 2021 (from April 1, 2021 to March 31, 2022)

Since the forecast of earnings in financial-instruments trading, the main-line business of the Company and its group companies, is hard to make due to volatile factors in the market, the Company does not provide such forecast prior to the end of each quarter. Instead, the Company intends to release preliminary earnings figures after the end of each quarter as and when such figures become available.

Points to note:

1. Changes in material subsidiaries (including changes in special subsidiaries leading to a change in scope of consolidation): None.
2. Application of an accounting treatment unique to the preparation of quarterly financial statements: None.
3. Changes in accounting policies and estimates and restatement of revisions:
4. 1. Changes in accounting policies resulting from revisions to accounting standards: Yes.
   2. Changes other than those in (i): None.
   3. Changes in accounting estimates: None.
   4. Restatement of revisions: None.
5. Number of shares issued (common stock):
6. 1. Number of shares issued as of June 30, 2021: 42,431,386 shares (including treasury shares)

   Number of shares issued as of March 31, 2021: 42,431,386 shares (including treasury shares)

   1. Number of treasury shares as of June 30, 2021: 6,327,577 shares.

   Number of treasury shares as of March 31, 2021: 6,327,577 shares.

   1. Average number of shares outstanding during the first quarter of fiscal 2021: 36,103,809 shares.

Average number of shares outstanding during the first quarter of fiscal 2020: 35,997,344 shares.

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Additional points to note:

1. Quarterly earnings figures included in this report are released without being reviewed by certified public accountants.
2. Explanation for proper use of earnings forecast and other special points to note:

For the same reason that the Company does not provide an earnings forecast prior to the end of each quarter as stated in 3. Outlook for Business Result for Fiscal 2021 (from April 1, 2021 to March 31, 2022 on page 2, the Company does not provide a dividend forecast.

I. Outline of Business Result

1. Outline of Business Result for First Quarter of Fiscal 2021

During the first quarter of fiscal 2021, the Japanese economy continued to show signs of pick-up against the rising infection of the novel coronavirus. While consumer expenditures lacked momentum, there was seen some brightness in manufacturers' production activities boosted by recovery of equipment investments and gradual increases in exports. As vaccination rates against the novel coronavirus progressed in the U.S. and European countries, economic activities in those countries continued to normalize, sustaining a further recovery of the global economy.

In the meantime, the Nikkei Stock Average on the Tokyo Stock Exchange (the TSE) exceeded the 30,000yen level in early April, thereafter moving under downward pressure. While the U.S. infrastructure investment plan helped to boost stock prices in the U.S. the Nikkei Stock Average registered 28,419yen on April 21, the lowest in about one month, due to the 3rd declaration of the emergency status amid the rising spread of the novel coronavirus and the awareness of delay in coronavirus vaccination rate. After a long run of holidays in early May in Japan, the Nikkei Stock Average rose to 29,685yen on May 10 on the outlook of long-sustaining possibility of the U.S. easy monetary policy. Soon thereafter, however, the Nikkei Stock Average dropped to 27,385yen on May 13, on the rise of interest rates in the U.S. Towards the end of May, the rising trend of U.S. interest rates ceased, helping the Nikkei Stock Average to recover to the 29,000yen level. In mid-June, the Nikkei Stock Average temporarily went below the 28,000yen level in anticipation of near-term reduction of monetary easing in the U.S. Thereafter, as investors readjusted their overreaction to the near-term increase in the U.S. interest rates and bought economically-sensitive stocks in expectation of economic recovery at home and abroad, the Nikkei Stock Average ended the first quarter at 28,791yen.

On the foreign currency market, the yen continued its strength against the U.S. dollar, recording 107.47yen per 1 U.S. dollar on April 23. Thereafter, however, the U.S. dollar strengthened in anticipation of recovery of the U.S. economy, causing the yen to end the first quarter at the lower side of the 111yen per 1 U.S. dollar level.

In the Japanese emerging-stock markets, the Nikkei JASDAQ Stock Average continued its rising trend after hitting the bottom on May 18, and the TSE Mothers Index continued its rising trend after recording its low on May 17. The Nikkei JASDAQ Stock Average ended the first quarter at 3,997yen, the highest in about 3 years since May 2018, and the TSE Mothers Index closed the first quarter at 1,207.

The average daily turnover on the TSE for the first quarter of fiscal 2021 was 2,896.9 billion yen, up 6.2% from the comparable period of fiscal 2020, and that on the TSE Mothers market was

150.0 billion yen, down 20.8%, and that on the JASDAQ market was 67.6 billion yen, up 1.6%. In the light of these circumstances, as regards activities on stocks in the quarter, the Company

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proposed to customers asset-backed stocks with stress on stability and dividends under low interest-rate environments and small- and medium-cap growth stocks selected based on the Company's strength in research. The Company thus continued to take various measures to meet with customers' needs.

With regard to "Dream Collection," a fund wrap account vehicle, it showed a favorable performance as a core asset in customers' medium- to long-term asset management. Its outstanding balance as of June 30, 2021 registered 166.3 billion yen, up 36.1% from June 30, 2020.

With respect to investment trust funds, the Company placed its priority on the promotion of "Ichiyoshi Small- and Medium-Cap Growth Stock Fund," which marked its 5th anniversary in June 2021, and also promoted investment trust funds investing in small- and medium-cap stocks with high medium- to long-term attractions, those investing in U.S. stocks with long-term high growth potential and those relating to high-visibility SDG stocks. Those funds are all created to match customer's needs, contributing to an increase in customers' assets under custody.

With respect to Ichiyoshi Asset Management Co., Ltd. the amount of assets under its management recorded 403.8 billion yen as of June 30, 2021, up 34.6%, as net asset values of funds under management got on a recovery trend.

As a result of these activities, net operating revenue for the first quarter of fiscal 2021 amounted to 5,151 million, up 35.8% from the first quarter of fiscal 2020. Operating cost and expenses amounted to 4,268 million yen, up 2.3%. Hence, operating income registered 882 million yen, an increase of 1,264 million over the year-earlier quarter.

Customers' assets in custody as of June 30, 2021 amounted to 2,010.1 billion yen, up 1.0% from March 31, 2021.

Set forth below are revenue sources, cost and expenses and financial condition.

i. Commissions

Total commissions for the first quarter of fiscal 2021 amounted to 5,004 million yen, up

35.7 % from the year-earlier period.

1. Brokerage commissions

Total brokerage commissions on stocks rose 11.9% to 1,410 million yen. Brokerage commissions on small- and medium-sized stocks (stocks listed on Second Section of the TSE, JASDAQ and TSE Mothers) registered 288 million yen, down 10.5%, and accounted for 20.5% of total brokerage commissions on stocks.

(b) Commissions from underwriting and solicitation to specified investors

In the primary market, the Company participated in 10 initial public offerings (of which the Company lead-managed 2) on a management and underwriting basis as against 3 participations in the year-earlier period. In the secondary market (for follow-on financing), the Company did not participate in any deal. As a result, commissions from underwriting and solicitation to specified investors amounted to 212 million yen, an increase of 206 million yen from the comparable period of fiscal 2020.

The cumulative number of companies whose offerings were lead- or co-managed by the Company stood at 1,161 (of which 62 were lead-managed by the Company) as of June 30, 2021.

(c) Commissions from distribution and solicitation to specified investors

As commissions from distribution of investment trust funds recorded 1,064 million yen, up

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62.7% from the year-earlier period, total commissions from distribution and solicitation to specified investors registered 1,080 million yen, up 44.2%.

(d)Commissions from other sources

The trailer fees related to the outstanding balance of investment trust funds under custody registered 1,008 million yen, up 19.7% from the year-earlier period. Investment trust management fees at Ichiyoshi Asset Management Co., Ltd. recorded 417 million yen, up 42.7%. With the addition of fees of 711 million yen from fund wrap accounts (up 114.2%), total commissions from other sources amounted to 2,269 million yen, up 42.1%.

ii. Gains or loss on trading

Trading in stocks, etc. recorded net gains of 25 million yen, up 49.2%. Trading in bonds and foreign exchange, etc. registered net gains of 2 million yen, down 79.3%. As a result, total net gains on trading amounted to 28 million yen, down 1.1%.

iii. Net financial revenue

Financial revenue increased 16.2% to 57 million yen as loans on margin transactions rose. Financial expenses declined 30.0% to 12 million yen. As a result, net financial revenue registered 44 million yen, up 43.1%.

Resultantly, net operating revenue for the first quarter of fiscal 2021 amounted to 5,151 million yen, up 35.8%.

iv. Operating cost and expenses

Operating cost and expenses recorded 4,268 million yen, up 2.3%, as real estate-related expenses relating to relocations of existing branches and openings of new branches.

v. Non-operating income and expenses

The Company recorded non-operating income of 55 million yen, mainly consisting of 35 million yen in the form of investment income on investment partnerships. As a result, net non-operating income amounted to 54 million yen, up 241.4%.

Resultantly, current income for the first quarter of fiscal 2021 amounted to 937 million yen, an increase of 1,302 million yen from the year-earlier period.

vi Extraordinary income and loss

The Company registered an extraordinary income of 154 million yen, mainly consisting of gains on sales of investment securities, and an extraordinary loss of 18 million yen mainly in the form of valuation loss on investment securities. As a result, net extraordinary income amounted to 136 million yen, up 31.9% from the year-earlier period.

Resultantly, income before taxes and tax adjustments for the first quarter of fiscal 2021 registered 1,073 million yen, and net income attributable to owners of parent (after deduction of corporate income taxes, resident's taxes and enterprise taxes in the aggregate amount of 99 million yen and corporate tax adjustments in the amount of 189 million yen) amounted to 785 million yen, an increase of 1,186 million yen from the year-earlier period.

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