Matsui Securities Co., Ltd.

Transcription

1 Matsui Securities Co., Ltd. (First Section of TSE: 8628) Annual Results for FY217 January 218

2 Table of Contents Section 1 Financial Summary 6 Section 2 Results of Operation 16 Section 3 Recent Developments 23 1

3 Results of Operation Equity trading value / Market share Equity commission rate (JPY tn) Margin Trading Service for Day-trades % 12.8% 12.3% 11.6% % 15% 12% (bp) 12 9 Excluding Margin Trading Service for Day-trades % 6% % 3 4Q 1Q 2Q Margin balance / Market share (JPY bn) 5 9.1% 9.% 8.9% 8.9% 9.2% % 1% 4Q 1Q 2Q Net financial income ratio 5.% 4 8% 4.% 3.7% 3.5% 3.7% 3.6% 3.5% 3 6% 3.% % 2.% 1 2% 1.% 4Q 1Q 2Q %.% 4Q 1Q 2Q 2

4 Financial Results Operating revenue (JPY mn) 1, 8,741 Ordinary income (JPY mn) 8, 8, 6, 4, 6,981 6,998 7,215 7,371 6, 4, 3,86 3,85 4,16 4,34 5,15 2, 2, 4Q 1Q 2Q 4Q 1Q 2Q Net income / ROE 1 Ordinary income ratio (JPY mn) 8, 6, 11.6% 12.5% 11.8% 11.8% 15.% 15% 1% 8% 6% 55% 54% 56% 55% 59% 4, 3,566 4% 2, 2,673 2,919 2,78 2,79 5% 2% 4Q 1Q 2Q % % 4Q 1Q 2Q Note 1: Annualized on each quarter 3

5 Financial Highlights Operating revenues up JPY 1,37 million QoQ Commissions were up JPY 1,5 million due to increase of equity trading value Interest & dividend income was up JPY 3 million due to increase of average margin balance SG&A up JPY 14 million QoQ Trading related expenses were up JPY 12 million due to increase of equity trading value and increase of advertisement expenses on mutual fund service Other SG&A were up JPY 3 million 4

6 Overview of Retail Equity Trading Market Equity trading value of individuals 1 (FLOW) Equity holdings by individuals 1 (STOCK) (JPY tn) % % 86% 83% 84% 85% % 77%81%82%82% % 7% 64% 35 59% 57% % 49% 23 37% % FY1 FY5 FY9 FY13 (Annualize) Equity trading value of individuals Equity trading value of 7 on-line brokers Proportion of trading value of 7 on-line brokers 4% 2% % 15 1 Super active traders 2 JPY 18 tn (Estimate) (JPY tn) % 2%21% 22% 22% 16% 17%18% % 14% % 91 1% 1% % % 3% 4% FY1 FY5 FY9 FY13 2Q Equity holdings by individuals Equity holdings by 5 on-line brokers Proportion of equity holdings by 5 on-line brokers 25% 2% 15% 1% 5% % Source: TSE, Company data, Company Website, BOJ Note 1: 5 on-line brokers are Matsui, SBI, Rakuten, Monex and Kabu.com Note 1: 7 on-line brokers include the 5 brokers and GMO Click and Okasan Online Note 2: Super active traders : number of trades per month is over 1 times 5

7 Financial Summary Section 1

8 Summary of Financial Results ( ) (Apr.-Dec.) FY217 (Apr.-Dec.) FY216 YoY (JPY mn) Operating Revenues 23,327 2,728 13% Commissions 13,751 12,883 7% Interest & dividend income 8,832 7,84 13% Interest expenses 1, % Net operating revenues 22,23 19,837 11% SG&A Operating income Ordinary income Net income Ordinary income ratio Matsui's trading value (JPY tn) Daily average trading value on TSE (JPY tn) 8,923 8,74 3% 13,99 11,133 18% 13,2 11,239 17% 9,136 7,778 17% 57% 54% % % Source: TSE 7

9 Breakdown of Net Operating Revenues ( ) (Apr.-Dec.) FY217 (Apr.-Dec.) FY216 YoY (JPY mn) Commissions 13,751 12,883 7% Brokerage 13,232 12,14 9% Equity & ETF 12,477 11,38 1% Futures & Options % Others % Net trading income Interest & dividend income (1) 8,832 7,84 13% Total operating revenues 23,327 2,728 13% Interest expenses (2) 1, % Net operating revenues 22,23 19,837 11% Net interest income (1) - (2) 7,528 6,948 8% Average margin balance (JPY bn) % 8

10 Breakdown of SG&A ( ) (Apr.-Dec.) FY217 (Apr.-Dec.) FY216 YoY (JPY mn) Trading related expenses 3,375 3,191 6% Stock exchanges and securities associations fees 1,121 1,48 7% Communications expenses 1,256 1,235 2% Advertisement % Personnel expenses 1,77 1,677 6% Occupancy & rental % Data processing & office supplies 1,563 1,348 16% Depreciation 1, % Taxes and dues Provision of allowance for doubtful accounts % % Others % Total SG&A 8,923 8,74 3% 9

11 Summary of Financial Results (Quarterly) (JPY mn) 2Q QoQ 1Q 4Q YoY TOTAL Operating Revenues 8,741 7,371 19% 7,215 6,998 6,981 25% 27,727 Commissions 5,234 4,183 25% 4,334 4,37 4,448 18% 17,253 Interest & dividend income 3,196 2,893 1% 2,743 2,627 2,532 26% 1,467 Interest expenses % % 1,228 Net operating revenues 8,17 6,957 17% 6,896 6,662 6,596 24% 26,499 SG & A 3,67 2,925 5% 2,931 2,857 2,783 1% 11,56 Operating income 5,13 4,32 27% 3,964 3,85 3,813 34% 14,939 Ordinary income 5,15 4,34 28% 4,16 3,85 3,86 33% 15,44 Net income 3,566 2,79 28% 2,78 2,919 2,673 33% 1,697 Ordinary income ratio 59% 55% - 56% 54% 55% - 54% Matsui's trading value (JPY tn) Daily average trading value on TSE (JPY tn) % % % % 3. Source: TSE 1

12 Breakdown of Net Operating Revenues (Quarterly) (JPY mn) 2Q QoQ 1Q 4Q YoY TOTAL Commissions 5,234 4,183 25% 4,334 4,37 4,448 18% 17,253 Brokerage 5,82 3,997 27% 4,152 4,12 4,228 2% 16,26 Equity & ETF 4,791 3,773 27% 3,913 3,869 3,986 2% 15,249 Futures & Options % % 1,11 Others % % 979 Net trading income % Interest & dividend income (1) 3,196 2,893 1% 2,743 2,627 2,532 26% 1,467 Total operating revenues 8,741 7,371 19% 7,215 6,998 6,981 25% 27,727 Interest expenses (2) % % 1,228 Net operating revenues 8,17 6,957 17% 6,896 6,662 6,596 24% 26,499 Net interest income (1) - (2) 2,625 2,479 6% 2,423 2,291 2,146 22% 9,239 Average margin balance (JPY bn) % %

13 Breakdown of SG&A (Quarterly) (JPY mn) QoQ 2Q 1Q 4Q YoY TOTAL Trading related expenses 1,198 1,83 11% 1,93 1,154 1,98 9% 4,345 Stock exchanges and securities associations fees % % 1,49 Communications expenses % % 1,672 Advertisement % % 531 Personnel expenses % % 2,227 Occupancy & rental % % 891 Data processing & office supplies % % 1,841 Depreciation % % 1,267 Taxes and dues % % 362 Provision of allowance for doubtful accounts % Others % % 317 Total SG & A 3,67 2,925 5% 2,931 2,857 2,783 1% 11,56 12

14 Regulatory Capital Capital adequacy ratio (As of 31 December 217) Margin trading balance and capital adequacy ratio (JPY mn) Tier 1 (A) 85,557 Tier 2 Net unrealized gain on investment 2,463 Statutory reserves 3,12 Allowance for doubtful accounts 143 Sub total (B) 5,618 Assets to be deducted from equity capital (C) 6,551 Net Capital (A) + (B) - (C) (D) 84,624 Total risk Market risk 544 Counterparty risk 6,21 Basic risk 2,733 Total (E) 9,488 Capital Adequacy ratio (D)/(E) 891% (JPY bn) % % 188 1,211% 1,143% % 843% 771% ,35% 1,35% % FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 Margin trading balance Capital adequacy ratio 323 1,2% 1,% 8% 6% 4% 2% % 13

15 Shareholders Return I Plan to pay year-end dividend of 27 yen per share for Dividends for Matsui s dividend per share and payout ratio 2 Interim : Paid 17 yen per share (Yen) 5 9% 1% Year-end Dividend policy : Plan to pay 27 yen per share % 42% 38% 71% 8% 79% 3 66% 2 78% 79% % 6% 4% Dividends Payout Ratio: Between 6% and 1% inclusive and Dividends on Equity(DOE) : 8% and above FY7 FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 (plan) Year-end dividend Interim dividend Commemorative dividend Payout ratio 2% % Note 1 : DOE target has been revised on July 217 (formerly, 7% and above) Note 2 : Payout ratio for the ordinary dividend 14

16 Dividend Payment for the past fiscal years Dividend Payout Ratio (DPR) 1% 9% 8% 7% FY11 FY12 FY1 DOE 2 8% ROE FY15 FY13 FY14 1% 9% 8% 7% 6% 5% 4% 3% DPR 6% FY9 FY8 FY7 FY6 FY5 6% 6% 5% 5% 4% 4% 3% 3% 2% 2% 2% 1% ROE Target (above 8%) % % 5% 1% 15% 2% 25% 3% 35% ROE 1 1% 1% % % Note1: ROE Note2: DOE = = Net income for fiscal year (Total net assets at the beginning of fiscal year + Total net assets at the end of fiscal year) / 2 Dividends per share (annual) (Stockholders' equity per share at the beginning of fiscal year + Stockholders' equity per share at the end of fiscal Year) / 2 15

17 Results of Operation Section 2

18 Equity Trading Value Matsui s equity trading value and its market share 1 Retail equity trading value 1 and proportion to total equity trading value (JPY tn) 16 15% (JPY tn) 15 25% 12 13% 14%14% 11%11%11% 12%12% 12% 13% 12% 12% 11% 12% 23% 22%22% 21% 2%18% 19% 19% 18% 19%18% 19%2% 2% % 6% 3% % 1% 5% % 4Q 1Q 2Q 4Q 1Q 2Q 4Q 1Q 2Q 4Q 1Q 2Q 4Q 1Q 2Q 4Q 1Q 2Q FY14 FY15 FY14 FY15 Matsui's trading value Matsui's margin trading value Matsui's share of retail trading value Retail equity trading value Retail margin trading value Proportion to total equity trading value % Source: TSE Note 1: Sum of the retail equity trading value on 2 major stock exchanges 17

19 Margin Trading Balance Matsui s shares bought on margin 1 and its market share 2 Total shares bought on margin 1 and share of 6 on-line brokers 3 (JPY bn) 4 12% (JPY tn) 4. 54%54% 55% 57% 56% 56%58% 56% 58%58% 53% 51% 6% 3 9% 9% 9% 9% 9% 8% 9% 9% 9% 9% 9% 9% 9% 9% % 2 6% 2. 2% 1 3% 1. %. 4Q 1Q 2Q 4Q 1Q 2Q 4Q 1Q 2Q 4Q 1Q 2Q 4Q 1Q 2Q 4Q 1Q 2Q FY14 FY15 FY14 FY15 Shares bought on margin Unlimited Matsui's share Total shares bought on margin trading Share of 6 on-line brokers % Source: TSE, Company Websites Note1 : Balance as of the end of each quarter Note2 : Total market share in 2 major stock exchanges Note3: 6 on-line brokers are Matsui, SBI, Rakuten, Monex, Kabu.com and GMO Click 18

20 Unrealized Losses on Matsui s Margin Balance 4% 3% 2% 1% % -1% -2% -3% -4% -5% As of 23 January 218 Average 1.1% Normal margin balance 2.3% Unlimited margin balance -2.1% Margin balance of shares listed on the emerging markets.7% (JPY tn) %. Jan-5 Jan-6 Jan-7 Jan-8 Jan-9 Jan-1 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Matsui's shares bought on margin (right axis) Normal (left axis) Shares listed on the emerging markets (left axis) Average (left axis) Unlimited (left axis) Note 1: Monthly data 19

21 ,125 2,216 2,311 2,176 2,222 2,64 1,976 2,37 2,258 2,275 2,48 2,45 2,582 Assets under Customers Accounts / Trading Turnover Assets under Matsui s customers accounts Equity trading turnover 1 of Matsui s customers (JPY bn) 3, Nikkei 225 closed at 22,764 on Dec. 218 (JPY yen) 24, (X) 2.5 2,5 2, 2, 16, ,5 12, 1, 8, ,.5. 4Q 1Q 2Q 4Q 1Q 2Q 4Q 1Q 2Q 4Q 1Q 2Q 4Q 1Q 2Q 4Q 1Q 2Q FY14 FY15 FY14 FY15 Assets under Matsui's customers' accounts Net inflow in cash and stocks Nikkei 225 Note 1: Equity trading turnover = (monthly average trading value) / (quarterly average assets under customers accounts*) * assets under customers accounts of Matsui s related persons are excluded Note 2: Nikkei 225 is the closed price at the end of each quarter 2

22 Number of Accounts / Breakdown of Trading Value Number of accounts at Matsui 1 Breakdown of trading value by customers opening the accounts in each fiscal year 1,15, # of accounts 1,122,225 # of margin accounts 182,51 (as of Dec. 217) 8% 1% 1,1, 1,5, 6% 8% 1,, Dec % 4% 6% 95, 4% 9, 85, 2% 2% 8, Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 % % FY12 FY13 FY14 FY15 # of accounts # of new accounts Proportion of beginner Before FY5 FY6 FY7 FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 Note 1: Number of accounts as of the end of each month. 21

23 Futures Trading Value / FX Margin Trading Value Matsui s OSE Nikkei 225 Futures trading value and its market share 1 Matsui s OTC FX trading value and commission (JPY tn) 3 Feb. 215 Add OSE Nikkei 225 Futures trading service for day-trades 25% (JPY tn) 1. May. 217 Restructure of the FX margin trading business (JPY mn) % 21% 21% 2%2% 19% 2% 21% 22% 21% 21% 18% 17% % 15% 1% % Q 1Q 2Q 4Q 1Q 2Q 4Q 1Q 2Q FY14 FY15 Futures trading value Trading value of Futures trading service for day-trades Matsui's share %. 4Q 1Q 2Q 4Q 1Q 2Q 4Q 1Q 2Q FY14 FY15 NetFx trading value NetFx commission Note1 : Source : OSE Note2 : We changed the definition of FX trading value from 1Q and correct the past value data due to transform brokerage business model into trading business model. 22

24 Recent Developments Section 3

25 Corporate Strategy Business Principle We are to provide superior quality of trading platform for retail investors based upon "customer-centric approach" Stimulate demand for customers and offer services in advance of other firms Business Strategy Develop unique and innovative services regardless of industry practice or tradition Focus on profitable online based brokerage business Basic Policy for Service Development Continue to focus on expansion of services for active customers e.g. Margin trading services for day-trades, Premium short-selling services, PTS, Intraday-trading service for Nikkei 225 Futures, FX Margin Trading Develop & Introduce suitable services for inactive but affluent customers and customers who are building assets for the future e.g. Portfolio Management Platform based on Robo-advisor, Saving type of NISA, ideco, crowd-funding 24

26 Mutual Fund Business I Implement continuous improvements of mutual fund services and differentiate our sales strategy based on our basic policy Basic Policy on Mutual Fund Sales policy1: Not Charging sales commision 1 policy2: Not Dealing with the mutual funds which include covered-call or currency option due to its complicated structure for retail investors ~Support long-term diversified investment for asset building generation~ Improve the usability of portfolio management platform Introduce Automatic rebalance function (December 23) ~As a portfolio advisory service which is free of charge, Matsui is the first to provide the service in Japan 2 Response to tax-efficient scheme for individual s asset building Saving type of NISA ~Started offering the service in January 218 ideco 3 ~Plan to offer the service from March 218 ~Response to the needs of investment in variety of mutual funds~ Expand the line-up of mutual funds Add 3 mutual funds every month, mainly actively managed mutual funds with no-load & lower custodian fee Introduce Core & Satellite investing function ~Combine portfolio management and investment of individual mutual funds (October 28) Note1: Excluding bull/ bear funds Note2: As of 2 October 217 Note3: The individual-type defined contribution pension plan 25

27 Mutual Fund Business II Main customers of the portfolio management platform are 3s and 4s AUM of mutual fund is JPY 7 billion 1 Customers by age 1 19% 12% 1% 28% 25% 1's and under 2's 3's 4's 5's 6's 7's and over Top 5 in sales (from October to December 217) Name Asset Management 1 Hifumi Plus Company Rheos 2 SMT Global Bond Index Open Hedged SMT AM 3 JASDAQ Open MUFJ Kokusai Tawara No Load Developed 4 Countries Equity Nissay TOPIX Index Fund 5 no charge AMOne Nissay AM Asset class Domestic Equity Developed Bond Domestic Equity Developed Equity Domestic Equity Usage of saving type of investment function 1 Proportion of users Users by frequency of purchase Trading Value by frequency of purchase 24% 27% 53% 44% 36% 76% User of saving type of investment function Others 2% monthly weekly daily 2% monthly weekly daily Note1: As of December

28 NISA Active account ratio for NISA 1 is 52%, the highest level among 5 online securities brokers 2 Number of NISA accounts and customers assets (as of December 217) 6% 5% 4% 3% NISA Account (Average investment value per account: 85,yen) Junior NISA Account (ditto: 53,yen) NISA 54% Junior NISA Total number of accounts 127,3 3,869 Number of active accounts 3 66,615 1,968 Active account ratio 52% 51% Total investment value(jpy mn) 4 56,792 1,41 Customers' assets(jpy mn) 5 99,17 1,487 Distribution of the invested amount (as of December 217) 55% Top 5 in trading value (from January to December 217) Rank NISA Account Junior NISA Account 1 Mizuho Financial Group, Inc. (8411) 2 Skylark Co., Ltd. (3197) Skylark Co., Ltd. (3197) Mizuho Financial Group, Inc. (8411) 3 Nissan Motor Co., Ltd. (721) Nissan Motor Co., Ltd. (721) 4 Toshiba Corp. (652) Japan Tobacco Inc. (2914) 5 Toyota Motor Corporation (723) Attribution of NISA accounts Accounts by age 15% 6% 17% Create Restaurants Holdings Inc. (3387) Accounts by gender 33% 2% 1% % 21% 11% 13% 12% 9% 8% 7% 1% under 2 2 ~ 4 4 ~ 6 6 ~ 8 8 ~ (JPY td) 1, 1, ~ 1,2 22% 18% 2's 4's 6's 22% 3's 5's Over 7's Male 67% Female Note 1 : Japanese version of Individual Savings Account. Note 4 : Total purchased amount that has delivered since Jan Note 2 : Source: QUICK corp. and KINZAI institute Note 5 : Total amount that has purchased since Note 3 : NISA account which has at least one transaction since Jan. 217.

29 Future initiatives for expansion of customer service Implement continuous enhancement of brokerage business and asset business Brokerage business ~Service for actively traded customers~ Asset Business ~Service for asset building customers~ Utilize PTS facilities Plan to connect to J-Market managed by SBI Japannext in order for customers to place orders on the PTS (March 218) ~ Expect to increase customers trading opportunity by meeting the needs of off-hours trading Improve the FX margin trading service Improve the profitability by transformation of brokerage business model into trading business model Plan to improve customer service during FY218 Cooperate with crowd-funding platform Plan to cooperate with crowd-funding platform OwnersBook which is specialized for investment in individual property (February 218) ~Initially introduce Matsui s customer to OwnersBook ~Arrangement of products which is exclusive use for Matsui s customer, seamless transfer of money and seamless account opening process are under consideration Start offering ideco As a part of service which contribute to long-term asset building of retail investors, plan to offer ideco (March 218) 28

30 The material is intended to provide the financial results for the quarter ended 31 December 217 and the company s business strategy, and does not constitute a solicitation of an offer to buy the securities issued by the company. The material is created based upon information as of 29 January 218. The information herein identifies our views at the time of creation of the material, and the company does not make any representation or warranty as to its accuracy or completeness, therefore, the information may be changed without any notices. The company does not assume responsibility for any omissions or errors of any data and descriptions in the material. This presentation may contain forward looking information. Please keep in mind that they are based on projections of the company and subject to changes depending on the situation. We will under no circumstances assume the obligation to revise this presentation in case such situation occurs. Contact information Matsui Securities Co., Ltd. URL: Tel: Fax: Mail: ir@matsui.co.jp Akira WARITA, Managing Director : a-warita@matsui.co.jp Masatoshi Yoshizawa : m-yoshizawa@matsui.co.jp