Summary
In 1Q FY03/2027, operating revenue reached JPY 17.299B (+52% YoY) and recurring profit came in at JPY 8.856B (+95% YoY), both at record-high levels. Against the backdrop of equity trading value of JPY 32.2T (all-time high, +112% YoY), brokerage commissions and net financial income expanded simultaneously, driving the recurring profit margin to 51%. Management candidly addressed the structural concentration of trading in select names and large-lot clients, while articulating new revenue frontiers including a capital and business alliance with Five Star Asset Management—anchored by a YouTube channel with ~1 million subscribers—and support for 23-hour US equity trading.
Key Points (Earnings Highlights and Growth Initiatives)
- Business Strategy and Market Assessment
- In a market driven by AI semiconductor names, management acknowledges a high concentration in select stocks and large-lot clients, noting that market share composition could shift with market volatility
- Retail investors' realized gains already reached JPY 108B in 1Q, equivalent to 50% of the prior full-year figure, suggesting ample remaining capacity
- Capital adequacy ratio stands at 304%—within the safety zone but trending lower, prompting a revision to the dividend payout policy
- Current Business Progress and Drivers
- 62% of in-house equity trading value concentrated in the top 5 TSE names (up sharply from 33% in March), with Kioxia alone accounting for 43%
- The number of large-lot traders (trades ≥JPY 100M) roughly doubled vs. January; increased application of commission caps pushed the effective commission rate down from 3.1bp to 2.5bp
- FX trading value declined 18% QoQ due to lower USD/JPY volatility from May onward, but revenue held broadly flat thanks to accumulated open interest balances and account growth
- Interest rate tailwinds fully contributed in 1Q, with segregated fund investment income at JPY 2.06B (+JPY 350M QoQ)
- Strategic Initiatives and Inflection Points
- Acquired 20.95% voting rights in Five Star Asset Management, becoming the largest shareholder; aims to leverage YouTube as a springboard for expanding active fund awareness and AUM
- Announced support for 23-hour US equity trading from the first day of launch on December 6
- Made permanent the narrowed spreads on 27 FX currency pairs; sustained ~5,000 new account openings per month through tie-ups with prominent traders
- Deployment of a conversational AI agent roughly doubled the self-resolution rate
Outlook and Strategy
- Full-year guidance is not disclosed. 1Q recurring profit of JPY 8.856B represents 37% of the prior full-year figure of JPY 23.812B, indicating strong progress
- Each +25bp policy rate hike is estimated to generate ~JPY 750M in incremental annual revenue (assuming JPY 700B in segregated funds and JPY 400B in borrowings); further rate increases from the current 1.00% would provide additional upside
- CFD service rollout and 23-hour US equity trading are positioned as priority initiatives for FY2026
- The Five Star Asset Management alliance aims to build a new distribution channel targeting YouTube viewers (~70% of whom are not existing account holders)
- The absence of fractional share purchasing remains a challenge, constraining the broadening of the investor base for high-priced stocks. Management recognizes the need but also explores alternatives such as single-stock ETFs and 23-hour trading
Positive Factors
- Equity trading value of JPY 32.2T (quarterly all-time high) and average margin balance of JPY 494.4B (+51% YoY), demonstrating a broadening transaction base
- High profitability with a recurring profit margin of 51% and annualized ROE of 27.5%
- New revenue model leveraging 190M cumulative YouTube views (No.1 in the industry) is materializing through premium IR videos and asset manager partnerships
- Ranked No.1 in customer satisfaction in the securities category of the JCSI (Japanese Customer Satisfaction Index); brand awareness at 60.6% (No.3 in the industry)
- MATSUI Bank deposit balance surpassed JPY 80B and 200K accounts, with a top-tier rate of 0.75% p.a. linked to securities balance strengthening AUM retention
- Retail investors' realized gains were a healthy JPY 108B in 1Q, and margin trading unrealized P&L for Nikkei 225 names remained in positive territory as of end-June
Concerns and Risks
- 62% of trading value concentrated in the top 5 names, indicating high dependence on a specific theme (AI semiconductors); risk of a sharp reversal in a market rotation
- Effective commission rate declined from 3.1bp to 2.5bp; rising proportion of large-lot trades and intraday margin trades caps upside for commission income
- Capital adequacy ratio at 304% on a downward trend (vs. 308% at prior FY-end); ~JPY 45B of margin balance concentrated in the top 20 names out of JPY 575.8B total, elevating the importance of single-name risk management
- As of July 24, margin buying unrealized loss ratio stood at -7.5% for Nikkei 225 names and -22.2% for non-225 Prime names, showing a deteriorating trend
- Lack of fractional share purchasing could put the company at a competitive disadvantage in expanding access to high-priced stocks
- While PTS-routed trading value is rising industry-wide, Matsui does not utilize PTS, meaning its 8% TSE share is diluted on a PTS-inclusive basis
Performance Highlights
In 1Q FY03/2027, operating revenue was JPY 17.299B (+52% YoY), recurring profit JPY 8.856B (+95% YoY), and net income JPY 5.609B (+95% YoY). Equity trading value of JPY 32.2T (all-time high) and average margin balance of JPY 494.4B drove results, lifting the recurring profit margin to a record 51%. SG&A of JPY 7.123B (+18% YoY) grew at a pace well below revenue growth, resulting in margin expansion.
Key Revenue Items
| Item | 1Q FY03/2027 | YoY | QoQ |
|---|---|---|---|
| Operating Revenue | JPY 17.299B | +52% | +13% |
| Net Operating Revenue | JPY 15.885B | +48% | +12% |
| Recurring Profit | JPY 8.856B | +95% | +28% |
| Net Income | JPY 5.609B | +95% | +27% |
| Commissions Received | JPY 8.765B | +67% | +11% |
| Net Financial Income | JPY 5.748B | +55% | +18% |
| Trading Gains/Losses | JPY 1.366B | -22% | -2% |
| SG&A | JPY 7.123B | +18% | -1% |
- Equity Trading Value: JPY 32.2T (YoY +112%, all-time high)
- Average Margin Balance: JPY 494.4B (YoY +51%)
- Equity Trading Value Market Share: 8.4% (vs. 8.3% in prior-year period)
- Margin Buy Balance Share: 7.8% (vs. 7.9% in prior-year period)
- Effective Commission Rate: 2.5bp (vs. 3.1bp in prior-year period)
- Net Financial Income / Average Margin Balance: 4.6% (vs. 4.5% in prior-year period)
- Recurring Profit Margin: 51% (vs. 40% in prior-year period)
- ROE (Annualized): 27.5% (vs. 15.2% in prior-year period)
- Total Accounts: 1,804,490 (as of end-June 2026)
- New Account Openings: ~11,810/month average
- AUM: JPY 5.9T
- Investment Trust Balance: JPY 707.1B
- FX Trading Value: JPY 129.9T
- FX Open Interest Balance: JPY 307.1B
- FX Accounts: 276,654
- Capital Adequacy Ratio: 304% (post-shareholder distributions)
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