Ichiyoshi Securities : EARNINGS REPORT FOR FIRST THREE QUARTERS OF FISCAL 2021

Released on January 28, 2022

(English translation for reference purposes only)

EARNINGS REPORT FOR FIRST THREE QUARTERS OF FISCAL 2021

（April 1 to December 31, 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 Management

Tel: [phone](URLhttps://www.ichiyoshi.co.jp)

Date of filing First Three Quarters Report: February 10, 2022 (scheduled)

Preparation of supplementary documents for quarterly earnings: Provided.

Quarterly earnings-reporting meeting: None.

(Figures less than one million yen are rounded down)

1. Outline of Consolidated Business Result for First Three Quarters of Fiscal 2021 (from April 1 to December 31, 2021)

(1) Highlights of consolidated business result	(in millions of yen, except per-share figures)
					(% indicates a change over the year-earlier period)
		Operating		Net operating		Operating			Current
		Revenue	(%)	Revenue	(%)		Income	(%)		Income	(%)
	Nine months ended
	Dec. 31, 2021	15,344	+19.1	15,315	+19.4		2,970	( --- )		3,073	( --- )
	Nine months ended
	Dec. 31, 2020	12,879	( --- )	12,825	(+0.4)		155	( --- )		188	( --- )
	Notes: Comprehensive income for the first three quarters of fiscal 2021: 2,210 million yen (+939.4%)
	Comprehensive income for the first three quarters of fiscal 2020: 212 million yen (---%)
			Net income attributable to	Net income per share		Net income per share-
			owners of parent	(%)					fully diluted
	Nine months ended
	Dec. 31, 2021		2,283		( --- )		63.24yen			63.03yen
	Nine months ended
	Dec. 31, 2020		111		( --- )		3.11yen		---

Note: 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) has been applied. Figures relating to operating revenue for the first three quarters 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 three quarters of fiscal 2020 are not provided.

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(2) Consolidated financial condition			(in millions of yen)
	Total assets	Net assets	Equity ratio	Net assets per share
As of Dec, 31, 2021	53,168	29,889	56.2%	827.31yen
As of Mar. 31, 2021	49,211	29,108	59.0%	804.07yen

Note: Shareholders' equity as of December 31, 2021: 29,868 million yen.

Shareholders' equity as of March 31, 2021: 29,030 million yen.

2. Dividends

	First quarter-end	Second	Third quarter-end	Fiscal year-end	Annual total
		quarter-end
Fiscal 2020 ended
Mar. 31, 2021	―	15.00yen	―	19.00yen	34.00yen
Fiscal 2021 ending
Mar. 31, 2022	―	19.00yen	―	****	****

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.

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 of 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 figures after the end of each quarter as and when such figures become available.

※Points to note:

1. Changes in material subsidiaries (including a change in scope of consolidation resulting from a change in special subsidiaries) during the quarterly consolidating period: None.
2. Application of an accounting treatment unique to the preparation of quarterly financial statements: None.
3. Changes in accounting policies and estimates and restatements of modifications:
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. Restatements of revisions: None.
5. Number of shares issued (common stock):
6. 1. Number of shares issued as of December 31, 2021: 42,431,386 shares (including treasury shares)
      Number of shares issued as of March 31, 2020: 42,431,386 shares (including treasury shares)
   2. Number of treasury shares as of December 31, 2021: 6,327,697 shares.

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

(iii) Average number of shares outstanding during the first three quarters of fiscal 2021:

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36,103,761 shares.

Average number of shares outstanding during the first three quarters of fiscal 2020: 36,015,173 shares.

Additional points to note:

1. Quarterly earnings figures included in this report are not subject to reviewing by certified public accountants or an auditing firm.
2. 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.

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I. Outline on Business Result

(1)Outline on business result for the first three quarters of fiscal 2021

During the first three quarters of fiscal 2021, the Japanese economy showed signs of gradual recovery as the effects of the novel coronavirus infections abated. Personal consumption started to pick up towards the end of the period in tandem with the normalization of economic activities while corporate earnings, excepting those in a few sectors of the industry still in the doldrums, continued to stay in a generally good condition. In the U.S. and European countries, the resumption of economic activities further progressed, sustaining the recovery of the global economy.

In the meantime, the Japanese stock market started off the period relatively strongly with the Nikkei Stock Average on the Tokyo Stock Exchange (the TSE ) exceeding the 30,000yen mark in early April. Thereafter, however, the Nikkei Stock Average floundered with its upward movement limited as the infections of the novel coronavirus surged, the delay in general vaccinations against the novel coronavirus became evident and rises in U.S. interest rates weighed on the stock market. In July, as the Tokyo Olympics was held and the 4th State of Emergency Declaration was issued in Tokyo, the Nikkei Stock Average quickened its corrections, recording 26,954yen, a year low, on August 20. Thereafter, however, the Nikkei Stock Average changed its direction upward, recording 30,795yen on September 14, a year high and the highest in 31 years, as expectations for a better political climate swelled. In early October, however, the Nikkei Stock Average fell down below the 28,000yen level on rises in U.S. interest rates and on concerns over the potential default of a leading Chinese real estate company. The Nikkei Stock Average came up close to the 30,000yen level towards the middle of November on the news of favorable corporate business results. Towards the end of November, however, investors' risk-off attitudes increased as the omicron variant raged overseas. In December, the FOMC, whose meeting was closely watched, indicated its policy of finishing its asset purchases in March 2023 and raising its policy interest rates 3 times by the end of 2023. These policies being as expected in the market, the Nikkei Stock Average stayed almost unaffected, ending the period at 28,791yen.

On the foreign currency market, the yen strengthened to 107.47yen per 1 U.S. dollar on April 23. As expectation for the recovery of the U.S. economy rose, however, the yen weakened to 111.65yen on July 2. The yen further weakened against the rising U.S. interest rates, ending the period at the lower side of the 115yen per 1 U.S. dollar level.

As regards the Japanese emerging stock markets, the Nikkei JASDAQ Stock Average recorded a year-high of 4,113yen on September 14, and thereafter sustained continuous corrections, ending the period at 3,878yen. The TSE Mothers suffered wide fluctuations and ended the period at 987.

The average daily turnover on the First Section of the TSE for the first three quarters of fiscal 2021 was 3,053.1 billion yen, up 15.8% from the comparable period of fiscal 2020, that on the TSE Mothers Market was 160.6 billion yen, down 24.5%, and that on the JASDAQ Stock Market was 62.1 billion yen, down 3.3%.

Under these circumstances, the Company further advanced its "Decisive Action on Reform"

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initiated since 2019 as the first reformative action in 20 years to further promote its customer-focused business operations. Accordingly, being a major target for reform, the transfer of the business model to "Stock-based Type" (asset-accumulation type) mainly based on trailer and trustee fees on investment trust funds and wrap-account fees has steadily bore fruit as indicated by an improvement on the cost-coverage ratio (the ratio at which operating cost and expenses are covered by stable income from trailer and trustee fees on investment trust funds and wrap-account fees).

In time with the "Decisive Action on Reform," the Company added one more business principle of "Belief in provision of custom-made products for each customer," in addition to its principle of "We do not sell products simply because they are popular" based on its 20-year-old "Ichiyoshi's 7 Standards" which stresses the Company's belief in "Not dealing in products unsuitable to customers." Thus, the Company is engaged in proposing custom-made products matching needs of each individual customer.

As regards activities on stocks during the period, the Company proposed to customers asset-backed stocks with stress on stability and dividends and small- and medium-cap growth stocks selected based on the Company's strength in research.

With regard to "Dream Collection," a fund wrap account vehicle, it enjoyed an increase in continuous need for conservative investment vehicles for customers' medium- to long-term asset management. Its outstanding balance as of December 2021, registered 183.7 billion yen, up 26.7% from December 31, 2020.

With respect to investment trust funds other than Dream Collection, funds investing in U.S. growth stocks, funds investing in small-andmedium-cap stocks (both domestic and foreign) and funds investing in SDG-related stocks, all based on Ichiyoshi's proposals matching customers' needs, contributed to increases in customers' assets in custody. Their total outstanding balance as of December 31, 2021, was 798.7 billion yen, up 9.5% from December 31, 2020.

With respect to Ichiyoshi Asset Management Co., Ltd. the net asset values of funds under its management recorded its continuous increase and their outstanding balances at the end of the period registered 437.6 billion yen, up 29.1% from December 31, 2020.

Under such environment, net operating revenue for the first three quarters of fiscal 2021 amounted to 15,315 million yen, up 19.4% from the first three quarters of fiscal 2020. Operating cost and expenses amounted to 12,345 million yen, down 2.6%. Hence, operating income registered 2,970 million yen, an increase of 2,814 million yen from the year-earlier period.

The amount of customers' assets in custody as at December 31, 2021 amounted to 1,996.8 billion yen, up 0.4% from the end of previous fiscal year.

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

i. Commissions

Total commissions for the first three quarters of fiscal 2021 amounted to 14,849 million yen, up

19.1 % from the year-earlier period.

(a) Brokerage commissions

Total brokerage commissions on stocks decreased 2.9% to 4,167 million yen. Brokerage commissions on small- and medium-cap stocks (stocks listed on Second Section of the TSE, JASDAQ and TSE Mothers) registered 736 million yen, down 33.8%, accounting for 17.7% of total brokerage commissions on stocks.

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