Ichiyoshi Securities : IR Presentation for First quarter, year ending March 2021

Stock Code：8624

IR Presentation

for First quarter, year ending March 2021

Ichiyoshi Securities Co., Ltd.

July, 2020

Ⅰ : Business Result (Consolidated)

1. Profit and Loss

• Operating revenue amounted to 4,182 million yen, a decrease of 436 million yen (down 9.5%) from the year-earlier period.

• Current income: loss of 365 million yen.
• Net income attributable to owners of parent: loss of 401 million yen.

				(JPY mil.)
	FY 2019	FY 2020	Year-on-	Year-on-
	1Q	1Q	year (%)	year
Operating revenue	4,618	4,182	-9.5%	-436
Net operating revenue	4,220	3,792	-10.1％	-427
Operating cost	4,459	4,174	-6.4％	-285
& expenses
Operating income	-239	-381	－	-142
Current income	-218	-365	－	-146
Extraordinary income	-0	103	－	103
& loss
Income taxes	-29	139	－	169
Net income attributable	-194	-401	－	-207
to owners of parent

					(JPY mil.)
	FY 2019			FY 2020
1Q	2Q		3Q	4Q	1Q
4,618	4,820		4,511	4,894	4,182
4,220	4,396		4,160	4,463	3,792
4,459	4,541		4,364	4,420	4,174
-239	-145		-204	42	-381
-218	-183		-158	90	-365
-0	2		66	-48	103
-29	99		119	75	139
-194	-285		-211	-32	-401

1

2. Breakdown of Net Operating Revenue

• Commissions amounted to 3,689 million yen, a decrease of 435 million yen (down 10.6%) from the year-earlier period, mainly decreased in commissions from distribution of investment trusts and other sources(mainly trailer fees on investment trusts).

			(JPY mil.)
	FY 2019	FY 2020	Year-on-	Year-on-
	1Q	1Q	year (%)	year
Commissions	4,124	3,689	-10.6%	-435
Gains on trading	9	28	206.8%	19
Other operating	33	43	32.6%	10
balance
Interest & dividend	53	31	-41.2%	-21
income
Total	4,220	3,792	-10.1%	-427

					(JPY mil.)
	FY 2019			FY 2020
1Q	2Q		3Q	4Q	1Q
4,124	4,293		4,074	4,352	3,689
9	16		30	33	28
33	49		19	39	43
53	36		36	37	31
4,220	4,396		4,160	4,463	3,792

2

3. Breakdown of Commission Revenue

• Brokerage commissions on stocks amounted to 1,260 million yen, a decrease of 21 million yen (down 1.6%) from the year-earlier period. Commissions from distribution of investment trusts amounted to 654 million yen, a decrease of 267 million yen (down 29.0%) from the year-earlier period. Commissions from other sources (mainly trailer fees on investment trusts) amounted to 1,467 million yen, a decrease of 211 million yen (down 12.6%) from the year-earlier period.
• Commissions from underwriting amounted to 5 million yen, an decrease of 5 million yen (down 50.0%) from the year-earlier period, as the Company participated in the management and underwriting of 3 initial public offerings.

				(JPY mil.)
	FY 2019 1Q	FY 2020 1Q	Year-on-year	Year-on-year
	(%)
Commissions	4,124	3,689	-10.6%	-435
Brokerage (Major item)
Stocks	1,281	1,260	-1.6%	-21
Distribution (Major item)
Investment trusts	921	654	-29.0%	-267
Underwriting (Major items)
IPO	7	4	-46.1%	-3
PO	3	1	-57.3%	-2
Total	11	5	-50.0%	-5
Commissions from other sources (Major items)
Investment trusts	1,679	1,467	-12.6%	-211
(trailer fees, etc.)
Other than	168	129	-23.4%	-39
investment trusts
Total	1,847	1,596	-13.6%	-251
＜Reference＞				(JPY 100 mil.)
Fund distribution	478	496	3.9%	18

* Including wrap-account fund sales

					(JPY mil.)
	FY 2019			FY 2020
1Q	2Q		3Q	4Q	1Q
4,124	4,293		4,074	4,352	3,689
1,281	1,116		1,163	1,183	1,260
921	1,137		874	943	654
7	116		22	349	4
3	7		40	10	1
11	123		62	359	5
1,679	1,692		1,749	1,611	1,467
168	170		157	164	129
1,847	1,862		1,907	1,776	1,596

3

4. Breakdown of Gains or loss on Trading

• Net gains on trading amounted to 28 million yen, a increase of 19 million yen (up 206.8%) from the year-earlier period, chiefly as net trading income on stocks increased.

				(JPY mil.)
	FY 2019	FY 2020	Year-on-	Year-on-
	1Q	1Q	year (%)	year
Stocks, etc.	-5	17	－	23
Bonds・Forex, etc.	15	11	-26.3%	-3
(Bonds, etc.)	(7)	(7)	2.4%	0
(Forex, etc.)	(7)	(3)	-53.0%	-4
Total	9	28	206.8%	19

					(JPY mil.)
	FY 2019			FY 2020
1Q	2Q		3Q	4Q	1Q
-5	0		16	26	17
15	15		14	7	11
(7)	(7)		(7)	(5)	(7)
(7)	(8)		(6)	(2)	(3)
9	16		30	33	28

4

5. Operating Cost and Expenses

• Operating cost and expenses amounted to 4,174 million yen, a decrease of 285 million yen (down 6.4%) from the year- earlier period, mainly as personnel expenses declined.

				(JPY mil.)	(JPY mil.)
					5,000
FY 2019	FY 2020	Year-on-	Year-on-	4,459
	1Q	1Q	year (%)	year
		4,174
					190
Transaction related	466	431	-7.4%	-34	62 146	184
expenses	4,000	62
				551	130
Personnel expenses	2,427	2,231	-8.1%	-195		547
					615
Property related	615	586	-4.6%	-28	3,000	586
expenses
Clerical expense	551	547	-0.8%	-4
					2,000
Depreciation	146	130	-10.7%	-15	2,427
					2,231
Public charges	62	62	-0.8%	-0
					1,000
Others	190	184	-3.5%	-6
Total	4,459	4,174	-6.4%	-285	466	431
					0
＜Reference＞ FY 2020 1Q	fixed cost and variable cost (non-consolidated basis)	FY 2019 1Q	FY 2020 1Q
Fixed cost	3,173				Transaction related expenses	Personnel expenses
					Property related expenses	Clerical expenses
Variable cost	826				Depreciation	Public charges
	(JPY mil.)				Others
							5

6. Balance Sheets/Financial Result

									Balance Sheets
(JPY mil.)								Total Assets
50,000						Fixed assets		Current assets
							46,470
	43,530
40,000
30,000															Increase in cash and
									39,972			deposits and cash
							36,862					segregated as deposits,
20,000															margin transaction
														assets
10,000
															Decrease in
						6,668			6,497					Investments and other
0															assets
						FY 2019			FY 2020 1Q
(JPY mil.)					Sum of Liabilities and Net Worth
				Net worth		Liabilities
50,000
							46,470
			43,530
40,000															Increase in cash
														payable to customers
							14,757			18,575
														and margin transaction
30,000															liabilities
20,000
							28,772			27,894
											Decrease due to
10,000
														dividend payments
0
					FY 2019			FY 2020 1Q

Financial Result

	FY 2020 1Q	Change from
	FY 2019 end.
Equity ratio	59.9	-6.0
(%)
Net worth per share (JPY)	772.87	-24.25
Capital adequacy ratio
(non-consolidated basis)	442.3	-4.5
(%)
	FY 2020 1Q	Year-on-year
EPS (JPY)	-11.15	-6.49

6

Ⅱ：Business Circumstances

1. Commission Revenue

(JPY mil.)

7,000
	Investment trusts (trailer fees, etc.)	Distribution	Brokerage	Underwriting and others
6,000
	5,389	5,202
	325	315	4,843
5,000
			486				4,293		4,352
					4,124
						4,074
							346
4,000	2,167	1,901		3,769		242	286	615
			3,689
			1,704	292						306
						1,116
					1,281	1,163
						1,183
3,000
			1,247
									1,260
	1,136	1,194					1,137
		928			921	874
					943
2,000
			621
									654
1,000	1,759	1,791	1,724		1,679	1,692	1,749
	1,608	1,611	1,467
0
	1Q	2Q	3Q	4Q		1Q	2Q	3Q	4Q	1Q
	FY 2018				FY 2019				FY 2020
										7

2. Customer Assets in Custody

			Investment trusts	Stocks	Others
(JPY 100 mil.)					19,740 19,665				19,171
20,000											19,400
							897	998
												433		538	17,929
														17,750
18,000																17,305
												16,504	450 17,479	588
										15,902				565		809
												508				15,360
16,000
								14,306		1,076		14,777					601
												642
14,000									9,574	13,697	13,467
							1,069			9,947		10,175
											12,744
								11,303	1,142	996	9,252
													9,013
12,000										11,775		863			8,974	8,455
							11,192			8,397
								6,567 1,065							7,382
								966
10,000												7,132
				8,178			7,761		5,720	5,814
									4,666		5,734
8,000
				808 6,862		6,975	5,911
						6,711
6,000					570	559	581
			5,271
					3,019		9,093
		4,194 1,231 4,829						7,599		8,048	8,685
4,000		3,410	7,540	8,259				8,327 7,377 8,040
				3,813			5,476		6,044	6,657	7,003	8,791	7,939
	1,390
							6,834		6,147
				2,701				4,315
						3,375
2,000			1,833
			2,541	2,742
				1,339	2,479
0		971
	FY '97	FY '98 FY '99 FY '00	FY '01 FY '02	FY '03 FY '04 FY '05	FY '06	FY '07 FY '08 FY '09	FY '10 FY '11	FY '12 FY '13	FY '14	FY '15	FY '16 FY '17	FY '18	FY '19 FY '20
																		1Q

8

3. Quarterly Customer Assets in Custody

(JPY 100 mil.)

22,000

20,000

Investment trusts

18,897

18,150 634

Stocks	Others
20,329
556	19,400	19,395	19,627
		18,823
	538	539	564
	17,929	17,963	569

18,000

16,000

14,000

12,000

10,000

8,000

6,000

533

9,470

9,773

		16,971		17,535	552	17,305
		588
		558
		575			809
					15,360
						601
10,748		10,116
10,175	10,195				9,391
					8,905
			9,013	8,728	8,455
		8,478
						7,382

4,000

2,000

0

8,146 8,488

9,024	8,685	8,660	8,946	8,327	8,248	8,504	8,863		8,040
			7,917		7,377

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

FY 2017

FY 2018

FY 2019

FY 2020

9

4. Trend of Investment Trust Trailer Fees and Its Cost Coverage (Month-end Average)

	Investment trust trailer fees ＋ wrap-account fees		Parent company	Consolidated
Note: Cost coverage ratio ＝	× 100 (%)	basis	basis
Cost (operating cost & expenses)

(JPY mil.)

1,600			Cost (left axis)						1,4971,529																45%
			Investment trust trailer fees + wrap-account fees (left											1,494 1,476 1,482
			axis)							1,403			1,360						1,388			38.9%	1,391	40%
																	1,362
1,400			Cost coverage ratio (right axis)
									1,285										1,295			37.2%
																						37.9%
					1,213							34.1%	1,212				1,244							35%
						1,171															35.2%
1,200				1,122	1,105						1,1511,1161,119			32.6%
									29.9%				30.5%
							1,054								31.8%		31.7%				30%
1,000	957	955										29.6%	29.5%	28.7%		29.1%
905
									24.8%								27.6%
																											25%
800
																													20%
600										19.1%														555	573	561
												521
																											489	15%
									15.7%		447									452
																		432
												403							412
																			362
400								11.9%		348				357	351	321	308									10%
							8.6%		245
200	4.4%		4.0%		7.8%		184
	6.4%		125																					5%
			3.1%	71	94	95
	42		29	35
0	FY '96		FY '97	FY '98	FY '99	FY '00	FY '01	FY '02	FY '03	FY '04	FY '05	FY '06	FY '07	FY '08	FY '09	FY '10		FY '11	FY '12	FY '13	FY '14	FY '15	FY '16	FY '17	FY '18	FY '19	FY '20	0%
																												1Q
																													10

5. Quarterly Trend of Investment Trust Trailer Fees and Its Cost Coverage

Investment trust trailer fees ＋ wrap-account fees

Note:	Cost coverage ratio ＝	Cost (operating cost & expenses)	× 100	(%)
(JPY mil.)	Cost (left axis)	Investment trust trailer fees + wrap-account fees (left axis)		Cost coverage ratio (right axis)

5,000			4,746											42%
4,500	4,347	4,361		4,473	4,568	4,481	4,504		4,459	4,541	4,364	4,420
										40%
								4,158					4,174
						40.0%
				40.0%						40.1%
4,000
					38.5%		38.3%	38.7%						38%
3,500
	37.6% 37.6%						37.7%
							37.3%
3,000												36.5%		36%
													35.2%
2,500														34%
2,000	33.5%
		1,785	1,788	1,759	1,791	1,724				1,749			32%
		1,641		1,679	1,692
						1,608	1,611
										1,467
1,500
	1,455													30%
1,000
500														28%
0														26%
	1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q
	FY 2017				FY 2018				FY 2019				FY 2020
														11

6. Top 5 Best Selling Investment Trust Funds (Total Amounts of 3 Months)

(JPY 100 mil.)

			FY 2018				FY 2019			FY 2020
		1Q	2Q		3Q	4Q	1Q	2Q		3Q	4Q	1Q
	Pictet Global Income Equity Fund (Monthly Dividend)	17	35		39	38	78	116		93	80	43
	Shinko J-REIT Open	79	133		84	61	77	71		37		32
	US NASDAQ Open (A/B)											26
	GS US Growth Equity Concentrate Investment Fund （Monthly Settlement/										36	23
	Quarterly Settlement/Semi-Annual Settlement）
	Fidelity US REIT Fund (A/B/C/D)							34		29		20
	Tokio Marine JPY Asset Balance Fund (Monthly Settlement/Yearly Settlement)							95		125	80
	LM Australia High Yield Equity Fund (Monthly Dividend)						25	42		28	32
	Ichiyoshi Japan Venture Fund										31
	US Micro Cap Equity Fund						40
	Ichiyoshi Mid-Small Cap Growth Equity Fund	181	121		43	40	20
	JREIT Asia Mix Open (Monthly Settlement/Asset Growth Type)					16
	Japan Recover Growth Equity Fund	21	27		65	13
	100-Year-Life World Allocation Fund (3% Target Receivable Type/		45		37
	6% Target Receivable Type/Asset Growth Type)
	Nomura PIMCO World Income Strategy Fund (A/B/C/D)	17

12

7. Number of Customer Accounts 【Retail】

(Accounts)									(Accounts)
	Total No. of accounts of assets in custody (left-hand scale)
200,000	No. of accounts with more than JPY 10 mil. (right-hand scale)				50,000
180,000
159,172	157,679	157,897	156,513	156,200	156,201	156,044	156,608	156,863	40,000
160,000
140,000
33,846	33,858
120,000			31,171	30,463	30,945	31,979			30,000
		29,895
						29,120
100,000							26,797
80,000									20,000
60,000
40,000									10,000
20,000
0									0
1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q
FY 2018				FY 2019				FY 2020
									13

8. Number of New Customer Accounts and Ratio of Referrals【Retail】

(Accounts)	New customer accounts	Through referral		Ratio of referrals

2,000
1,800				1,741						1,729	1,683
1,600
1,400												1,273
1,200
			1,049
1,000
	878
800					738	706	694		713					678
		634				639
600			37.8%		36.7%	45.0%					36.5%	39.2%			513
	35.1%		35.3%								470
	31.9%						40.5%	31.2%				34.5%
										30.2%
400						35.9%						27.9%
			397	615				32.9%		539	615	499
						249
200
308					318
				271		210	289
		202								142	189	177
0
	Apr.	May	Jun.	Jul.	Aug.	Sep.	Oct.	Nov.	Dec.	Jan.	Feb.	Mar.	Apr.	May	Jun.
	2019									2020
															14

9. Accumulated Companies Lead- and Co-managed

(Companies)												(Companies)
1,200		Accumulated companies lead-andco-managed(left-hand scale)						70
		Of which, number of accumlated companies lead-managed(right-hand scale)			1,117 1,120
				1,082
													1,044
												980	1,013	60
1,000												56	56
											940
											905
												52
								828	832	846	869		50
						812	821				50
					783							45
800
				743
											42
					710
					663									40
					620
											35
					580
600										32
				511			27	27	27	29	29			30
						26
			443		25
		386			23
400				20
346
												20
	299
				15
200					10
				8									10
				7
		2	3
0														0
	FY '96 FY '97 FY' 98 FY '99 FY '00 FY '01 FY '02 FY '03 FY '04 FY '05 FY '06 FY '07 FY '08 FY '09 FY '10 FY '11 FY '12 FY '13 FY '14 FY '15 FY '16 FY '17 FY '18 FY '19 FY '20
														1Q
														15

10. Quarterly Accumulated Companies Lead- and Co-managed

(Companies)

1,200

1,000

800

600

400

200

0

																													(Companies)
						Accumulated companies lead-andco-managed(left-hand scale)
						Of which, number of accumlated companies lead-managed(right-hand scale)	1,106	1,117	1,120
												1,082	1,087	1,094								60
									1,071
1,053	1,060
																								56	56
																		54	54
															53								50
									52	52
51		51

40

30

20

10

0

1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q
FY 2018				FY 2019				FY 2020

16

Disclaimer

・This document is produced by Ichiyoshi Securities Co., Ltd. (the "Company"), and nothing in this document shall be considered as an offer to sell or solicit an offer to buy any security, or other instrument, including securities issued by the Company.

・This document is based on Japanese accounting standards.

・No part of this document shall be reproduced, stored in a retrieval system or transmitted in any form or by any means, without the prior written permission of the Company.

・This document is based on the data as of June 30, 2020. (Figures less than one million yen are rounded down)

Ichiyoshi Securities Co., Ltd.

Financial instruments business operator registered with the Kanto Local Finance Bureau (registration No. 24)

Member association: Japan Securities Dealers Association

Japan Investment Advisers Association