ENVALITH
東洋証券株式会社 logo

TOYO SECURITIES CO.,LTD.

8614・Prime Market・Securities & Commodity Futures

Official website
東洋証券株式会社 logo
TOYO SECURITIES CO.,LTD.8614

Business

TOYO SECURITIES CO., LTD. is a comprehensive securities company founded in 1934 and listed on the Prime Market of the Tokyo Stock Exchange. Its principal businesses are the intermediation of domestic and foreign equity trading, the offering and sale of investment trusts, and underwriting operations, with face-to-face sales targeting individual investors as its core business. The company holds a pioneering position within the industry with respect to China & Hong Kong equities, providing China equity trading services through its Hong Kong subsidiary (TOYO SECURITIES ASIA LIMITED). In addition to operating multiple domestic sales branches, the company had access to the Chinese market through its Shanghai representative office (closed in December 2024). The group consists of the Company and two subsidiaries.

Business Model

The core of revenue is net operating revenue (FY2026 (ending March 2026): ¥11,391 million), composed of three main pillars: domestic and overseas equity brokerage commissions (¥5,104 million), investment trust sales fees (¥2,963 million), and investment trust agency fees (¥3,290 million). Agency fees represent stable revenue linked to the balance of assets under custody, and the expansion of average assets under custody in equities and investment trusts (¥386.8 billion) supports this stable revenue base. In addition, the company has a composite revenue structure incorporating trading gains/losses (¥1,309 million), net financial income (¥524 million), and revenue related to the solutions business.

Company Strengths

Established a Hong Kong local subsidiary (TOYO SECURITIES ASIA LIMITED) in 1987 and obtained Hong Kong Stock Exchange participant status in 2005. The company has established a pioneering position within the industry in China & Hong Kong Equity Trading, and achieved an increase in China equity commissions during a phase when the Hang Seng Index reached its highest level in approximately four and a half years amid Chinese government economic stimulus measures. This expertise is a unique strength that is difficult for competitors to replicate in a short period.

Average balance of equity investment trust assets under custody expanded to ¥386.8 billion (up 13.9% year on year), and agency fees reached ¥3,290 million (up 19.9% year on year). Assets under custody of ¥1,574.0 billion have already achieved the medium-term plan target of ¥1,500.0 billion or more, forming a stable revenue base that is less susceptible to market fluctuations. The NISA account balance also expanded to ¥98.7 billion, with progress being made in building up long-term asset balances.

Through Project EST, which promotes top-down and bottom-up kaizen (improvement) initiatives, the increase in selling, general and administrative expenses for FY2026 (ending March 2026) was contained to 0.8% year on year (¥10,392 million). While reducing transaction-related expenses (down 7.5% year on year) and office expenses (down 4.1% year on year), the company absorbed the increase in personnel expenses accompanying the business recovery. Maintaining cost discipline during the revenue expansion phase contributed to a substantial improvement in operating income (¥2,820 million, up ¥21,260 million year on year).

ENVALITH's Perspective

Operating income for FY2026 (ending March 2026) reached ¥2,820 million (up 306.2% year on year), marking a substantial improvement on a core business basis. Meanwhile, extraordinary gains (gains on sale of investment securities) declined 36.4% to ¥1,411 million from ¥2,247 million in the prior period, and the structure in which the growth rate of net income (up 48.3%) substantially trails that of ordinary income (up 214.3%) continues. Going forward, the level of net income will be affected by the timing of sales of investment securities, and sustainable growth on an ordinary income basis from the core business will be the focal point for evaluation.

Trading gains/losses decreased 33.4% year on year to ¥1,309 million, primarily due to a decline in over-the-counter trading value of US equities. External factors such as volatility in the US equity market and heightened geopolitical risk had an impact, but the company's trading income is inherently variable income that is highly dependent on market conditions, and this has been offset by expansion in commissions received. With commissions received accounting for 83.9% of the total, recovery in trading gains/losses will be key to the next phase of revenue expansion.

Total dividends for FY2026 (ending March 2026) amounted to ¥3,509 million (¥50 per share), with a consolidated dividend payout ratio of 86.2%, a high level. Although this improved from 145.1% in the prior period, the company continues to allocate the majority of its profits to dividends. It has announced a policy to maintain a dividend of ¥50 per share for FY2027 (ending March 2027) as well; while the stability of shareholder returns is commendable, questions remain regarding the ability to sustain dividends should performance deteriorate. Retained earnings stood at ¥6,038 million, an increase of only ¥428 million year on year, indicating a modest pace of internal reserve accumulation.

Growth Strategy

Assets under custody have already exceeded ¥1,500.0 billion, and the ROE target of 8% has been achieved ahead of schedule; the next focus areas are maintaining ROE and expanding the equity investment trust balance

As of the end of March 2026, assets under custody reached ¥1,574.0 billion, achieving the medium-term plan target ahead of schedule. The company will strengthen the stable earnings base derived from agency fees by acquiring long-term holding customers through NISA and building up investment trust balances.

As of the end of March 2026, the equity investment trust balance stood at ¥401.8 billion, representing approximately 80% progress toward the ¥500.0 billion target. Equity investment trust sales amount expanded to ¥115.4 billion (up 32.5% year on year), and the company will accelerate balance accumulation by strengthening sales of Asia-related investment trusts and enhancing consulting services.

ROE for FY2026 (ending March 2026) reached 12.9%, achieving the medium-term plan target (ROE of 8% or more by FY2028 (ending March 2028)) two fiscal years ahead of schedule. The recovery of core business profitability and the maintenance of a high dividend payout ratio have been achieved simultaneously, and the company will continue to maintain and improve ROE through the parallel promotion of earnings expansion and cost structure reform (Project EST).

Leveraging its unique brand in China & Hong Kong Equity Trading, the company aims to strengthen sales of Asia-related investment trusts and expand China equity commissions. Taking advantage of the recovery phase of the Hang Seng Index, the company will improve customer satisfaction by enhancing customer seminars and strengthening after-sales follow-up.

Through top-down and bottom-up improvement initiatives, the growth rate of selling, general and administrative expenses for FY2026 (ending March 2026) was contained to 0.8%. While continuing to reduce transaction-related expenses (down 7.5% year on year) and office expenses (down 4.1% year on year), the company will balance investment in growth areas with appropriate management of personnel costs.

Last updated: July 19, 2026