Key Positives From The 2Q Results
MATSUI SECURITIES CO.,LTD. captured the growth in retail trading by gaining market share. 1H operating income rose sharply to JPY 16,484M (+60.6% YoY). All three pillars (commissions, net interest income and FX) grew, and net operating revenue (+38.2%) outpaced SG&A (+19.2%). This operating leverage lifted OPM to 48.4% (our estimate).
- Trading Value: Equity trading value doubled to JPY 63.3T (+99.7%), outpacing the +88% rise in trading value across the two main exchanges (company disclosure). The company's share of equity trading value rose to 8.8% in 2Q (Jul–Sep), up from 7.9% a year earlier.
- Margins: OPM reached 48.4% (+5.3pt, our estimate). The company-disclosed recurring profit margin on operating revenue also improved to 49% (43% a year earlier).
- Net Interest Income: Net interest income rose to JPY 11,735M (+48.1%). Average margin loan balances grew to JPY 5,145B (+54.2%), and higher distributions from segregated customer trust assets added to the gain.
- Deposit Investment Income: Quarterly investment income on segregated deposits reached JPY 24.0B, up from JPY 13.0B a year earlier. The company estimates each +25bp policy rate hike adds JPY 7.5B to annual revenue.
- FX Recovery: 2Q FX revenue was JPY 1,615M (+19.8% QoQ). Tighter spreads and higher position limits drove FX trading value up to JPY 163.8T.
Key Concerns From The 2Q Results
2Q standalone recurring profit was JPY 7,672M, down -13.4% QoQ and the first decline in two quarters. Trading value slipped only -3%, but the equity brokerage commission rate fell to 2.1bp. As a result, equity/ETF brokerage commissions dropped sharply by -17.4%. If commission-free day-trading margin keeps gaining share, commissions will increasingly lag trading value growth.
- Commission Rate Erosion: The equity brokerage commission rate fell from 3.3bp (prior-year 2Q) to 2.1bp (current 2Q). 2Q equity/ETF brokerage commissions were JPY 6,766M (-17.4% QoQ).
- Rising Funding Costs: Interest expense doubled to JPY 3,190M (+110.4%). Net interest income as a share of average margin balances fell from 5.0% (prior-year 2Q) to 4.4%, as rate hikes also lifted funding costs.
- Margin Account Losses: Unrealized losses on margin long positions stood at -13.3% (as of 10/22), and -18.5% on the Growth Market. A market correction could reduce trading activity and shrink margin balances.
- Rising SG&A: SG&A rose to JPY 14,374M (+19.2%). Advertising expenses climbed to JPY 2,056M (+30.5%), and a new TV campaign featuring Hideki Matsui began airing in October.
- Higher Extraordinary Losses: The provision for the reserve for financial instruments transaction liabilities rose to JPY 1,261M (JPY 359M a year earlier), lifting extraordinary losses. Because the provision scales with trading value, higher volumes weigh more heavily on net income.
Focus Areas / Items To Monitor Going Forward
- Day-Trading Margin Payoff: Can growth in day-trading margin lift margin balances and net interest income enough to offset falling commission rates? Monthly commission rates and average margin balances are the key data points.
- Interest Spread Under a 1.25% Policy Rate: The gap between JPY 7,409B in segregated deposits and JPY 4,458B in borrowings supports earnings growth. Whether the company revises its margin lending rates will also be key.
- 3Q Activity Levels: With unrealized losses on margin longs widening, can 3Q trading value and margin balances stay elevated? We also want to assess new-account acquisition efficiency after the new ad campaign.
- Quantification of the share of day-trading margin customers who migrate to standard margin trading and generate net interest income
- Policy on revising margin lending rates as policy rates rise, and competitors' moves
- Advertising spend levels after the new campaign launch, and target customer acquisition costs
- Why the interim payout ratio was 69% against a policy of 70% or higher, and how the year-end dividend will be determined
- Timing and scale of monetization for new revenue sources such as CFDs, 23-hour US equity trading and corporate IR support videos
Key Financial Highlights
| Item | Value | YoY |
|---|---|---|
| Operating Revenue | JPY 34,048M | +42.8% |
| Net Operating Revenue | JPY 30,858M | +38.2% |
| Commissions Received | JPY 16,109M | +42.0% |
| └ Brokerage Commissions | JPY 15,421M | +42.5% |
| └└ Equities/ETFs | JPY 14,960M | +45.0% |
| └└ Futures/Options | JPY 461M | -8.7% |
| Trading Gains/Losses | JPY 3,005M | -1.6% |
| Net Interest Income | JPY 11,735M | +48.1% |
| └ Interest Income | JPY 14,925M | +58.1% |
| └ Interest Expense | JPY 3,190M | +110.4% |
| SG&A | JPY 14,374M | +19.2% |
| └ Transaction-Related Expenses | JPY 4,936M | +30.8% |
| └ Administrative Expenses | JPY 3,559M | +16.1% |
| Operating Income | JPY 16,484M | +60.6% |
| Recurring Profit | JPY 16,528M | +62.8% |
| Extraordinary Losses | JPY 1,302M | +74.5% |
| └ Provision for Reserve for Financial Instruments Transaction Liabilities | JPY 1,261M | JPY 359M in prior-year period |
| Interim Net Income | JPY 10,435M | +59.7% |
| EPS | JPY 40.50 | +59.6% |
| Company Equity Trading Value | JPY 63.3T | +99.7% |
| Company Average Margin Balance | JPY 5,145B | +54.2% |
On a 2Q standalone basis (Jul–Sep), operating revenue was JPY 16,750M (-3.2% QoQ), operating income JPY 7,722M (-11.9% QoQ) and net income JPY 4,826M (-14.0% QoQ). Versus prior-year 2Q, growth remained strong: operating revenue rose +34.7% and recurring profit +36.6% (our estimate). The 1H decline in trading gains reflects a tough comparison against strong prior-year 1Q FX revenue (JPY 1,751M).
Performance By Business Segment
The company operates a single securities segment. Doubled trading value and higher margin balances drove growth of over 40% in both commissions and net interest income. FX recovered in 2Q, while futures/options revenue declined.
Segment Performance Table
| Segment | Revenue | YoY | Operating Income | YoY | Margin |
|---|---|---|---|---|---|
| Securities (Company-Wide) | JPY 34,048M | +42.8% | JPY 16,484M | +60.6% | 48.4% |
- Equity/ETF Brokerage: 1H commissions rose +45.0%. With the Nikkei 225 hitting record highs, company trading value grew +99.7%, outpacing the overall market (+88%) and lifting market share.
- Margin Trading / Net Interest Income: Average margin balances rose +54.2%, and the company's share of margin long positions reached 8% at end-2Q. Higher margin trading revenue plus growing deposit investment income lifted 2Q net interest income to JPY 5,986M (+4.1% QoQ).
- FX: 2Q revenue was JPY 1,615M, up +25.1% versus prior-year 2Q. Higher currency volatility, tighter spreads and higher position limits drove trading value up +26.1% QoQ. The number of accounts rose to 293,490.
- Investment Trusts: AUM reached JPY 7,563B, up +65.5% from end-2Q of the prior year. 2Q accumulation-plan purchases reached JPY 209B, a record high. Tie-ups with eight asset managers and the promotion of distinctive funds contributed.
- Equity Brokerage (2Q Standalone): Commissions fell -17.4% QoQ. Trading value slipped only -3%, but the rising share of day-trading margin cut the commission rate from 2.5bp to 2.1bp.
- Futures/Options: 1H commissions fell -8.7%, and 2Q came in at JPY 215M (-12.2% QoQ). The company's share of futures trading value fell to 18% from 22% in prior-year 2Q.
Progress Versus Full-Year Guidance
The company does not disclose guidance given its heavy dependence on market conditions. For reference, 1H operating income already represents 70.3% of prior-year full-year results (our estimate). This compares with 43.7% a year earlier (prior-year 1H operating income of JPY 10,263M ÷ prior FY JPY 23,462M). On this basis, the company would exceed prior-year results even if 2H profit came in below the prior-year 1H level.
| Item | Value (1H Cumulative) | Prior FY Actual (Reference) | % of Prior FY Actual |
|---|---|---|---|
| Operating Revenue | JPY 34,048M | JPY 52,660M | 64.7% |
| Operating Income | JPY 16,484M | JPY 23,462M | 70.3% |
| Recurring Profit | JPY 16,528M | JPY 23,813M | 69.4% |
| Net Income | JPY 10,435M | JPY 15,480M | 67.4% |
- Not applicable
Changes To Guidance
The company continues not to disclose guidance. Instead, it discloses key operating metrics such as equity brokerage trading value and major revenue items such as brokerage commissions on a monthly basis. 2H performance will therefore be tracked through the monthly data.
Commentary On Shareholder Returns
The interim dividend is JPY 28 per share, up JPY 3 from JPY 25 in the prior-year interim period (interim payout ratio of 69%, company disclosure). The basic dividend policy is to maintain a payout ratio of 70% or higher; the year-end dividend forecast is undetermined. ROE of 24.8% (company disclosure) reflects high capital efficiency.
Financial Position
Interest-bearing debt consists mainly of short-term funding for margin loans, so it rises in step with margin balances. The company-disclosed capital adequacy ratio is 304%, above the 251% average of five online brokers (end-June 2026). The company describes this as "an appropriate level under current conditions."
- Key Figures
- Leverage Metrics
| Item | Value | Additional Information |
|---|---|---|
| Cash and Deposits | JPY 107,096M | +40.6% vs. prior FY-end |
| Segregated Deposits | JPY 740,912M | -1.1% vs. prior FY-end |
| Margin Loans | JPY 509,493M | +20.3% vs. prior FY-end |
| Total Assets | JPY 1,476,479M | +9.0% vs. prior FY-end |
| Shareholders' Equity | JPY 86,629M | +5.6% vs. prior FY-end |
| Interest-Bearing Debt | JPY 445,826M | +20.2% vs. prior FY-end; sum of short-term borrowings and margin borrowings |
| └ Short-Term Borrowings | JPY 431,900M | +36.3% vs. prior FY-end |
| └ Margin Borrowings | JPY 13,926M | -74.2% vs. prior FY-end |
| Deposits Received | JPY 447,465M | +4.8% vs. prior FY-end |
| EBITDA | JPY 18,400M | Operating income + depreciation (1H, our estimate) |
| Metric | Value | Notes |
|---|---|---|
| Net Debt/EBITDA | 18.4x | Our estimate, based on 1H EBITDA. For reference only, as most liabilities fund margin loans |
| Debt/Equity | 5.15x | Our estimate; 4.52x at prior FY-end |
| Capital Adequacy Ratio | 304% | Company disclosure, after outflows; 308% at prior FY-end; five-company average 251% |
| Equity Ratio | 5.9% | Company disclosure; 6.1% at prior FY-end. Low because customer deposits are recorded on both sides of the balance sheet |
Disclosures Released Alongside The Earnings Announcement
Not applicable
Major Announcements During The Quarter
- 2026/08/19The official YouTube channel surpassed 1 million subscribers. The earnings materials position it as the industry's No. 1 owned media and a platform for new businesses
- 2026/08/26Announced the planned interim dividend for FY3/2027: JPY 28 per share, up from the prior-year interim period
- 2026/08/28Selected as a constituent of the JPX-Nikkei Index 400 in recognition of high capital efficiency, expanding scope for passive inflows
- 2026/10/16Launched an FX automated trading simulation feature. Users can check required margin and P&L in advance, supporting FX trading activity
- 2026/10/16A new ad campaign featuring Hideki Matsui began airing on 10/19. It targets baseball fans and aims to lift brand awareness from 59.7%
Large-Shareholding Filings / Material Proposals Over The Past Year
Not applicable
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