KYOKUTO SECURITIES CO., LTD.
8706・Prime Market・Securities & Commodity Futures
Investment and Financial Services Business (Single Segment)
Single-segment business centered on face-to-face securities services for high-net-worth clients
| Period | Current | Previous | Change |
|---|---|---|---|
| Operating revenue (consolidated) | ¥8,317 million | ¥7,989 million | ↑ |
| Net operating revenue (consolidated) | ¥8,193 million | ¥7,908 million | ↑ |
| Operating profit (consolidated) | ¥3,039 million | ¥2,691 million | ↑ |
| Ordinary profit (consolidated) | ¥4,006 million | ¥3,453 million | ↑ |
| Profit attributable to owners of parent (consolidated) | ¥4,790 million | ¥4,446 million | ↑ |
| Commission income (consolidated) | ¥4,155 million | ¥3,078 million | ↑ |
| Trading gains/losses (consolidated) | ¥2,306 million | ¥3,249 million | ↓ |
| Net income per share (consolidated) | ¥150.37 | ¥139.38 | ↑ |
| Net assets per share (consolidated) | ¥1,667.06 | ¥1,617.79 | ↑ |
| Equity ratio (consolidated) | 65.1% | 65.7% | ↓ |
| Capital adequacy ratio (non-consolidated) | 453.8% | 450.2% | ↑ |
| Total assets (consolidated) | ¥80,600 million | ¥78,597 million | ↑ |
| Net assets (consolidated) | ¥52,509 million | ¥51,609 million | ↑ |
| Annual dividend | ¥110.00 (per share) | ¥110.00 (per share) | — |
| Dividend payout ratio (consolidated) | 73.2% | 78.9% | ↓ |
Business Details
The Kyokuto Securities Group operates under a single segment, "Investment and Financial Services Business." Its core operations are Type I and Type II Financial Instruments Business, maintaining a Face to Face (in-person direct dialogue) business model and providing high-net-worth clients with "distinctive, timely products" such as equities, bonds, and investment trusts. Revenue is structured around four pillars: commission income, bond and other trading gains/losses, financial income (bond interest receivable, etc.), and gains on sale of investment securities. Consolidated subsidiaries include FE Invest (Investment Fund Management & Proprietary Investment) and Kyokuto Property (real estate leasing).
Recent Overview
Commission income surged 35%, with both operating profit and ordinary profit achieving their first increase in two fiscal years
In FY2026 (ending March 2026), the Nikkei Average rose 43% from the prior fiscal year-end (closing at ¥51,063), driving a rapid expansion in equity brokerage commissions, up 55.7% to ¥1,816 million. Investment trust sales also remained strong, bringing total commission income to ¥4,155 million (up 35.0% year on year). Meanwhile, bond and other trading gains/losses contracted to ¥2,545 million (down 27.2%) amid rising interest rates. Selling, general and administrative expenses were held in check at ¥5,154 million (down 1.2%), and operating profit rose to ¥3,039 million (up 12.9%). Including gains on sale of investment securities of ¥3,128 million recorded as extraordinary income, profit attributable to owners of parent was ¥4,790 million (up 7.7%). The company conducted share buybacks of ¥719 million while maintaining an annual dividend of ¥110 (DOE of 6.7%).
Key Products
Growth Drivers
- Rapid expansion in equity brokerage commissions (up 55.7% year on year to ¥1,816 million), driven by the Nikkei Average's 43% rise from the prior fiscal year-end (closing at ¥51,063)
- Continued strong investment trust sales, expanding underwriting and distribution handling fees (up 15.9%) and other commission income (trust fees, etc., up 35.4%)
- Increase in financial income (up 10.3%) driven by the Bank of Japan's policy rate hike (implemented in December 2025) and continued yen depreciation (¥158.75 to the dollar at fiscal year-end)
- High customer loyalty and expanding assets under custody through the Face to Face business model, with differentiation through provision of "distinctive, timely products"
- Financial soundness maintained through a high capital adequacy ratio of 453.8%, alongside active financial management (realization of ¥3,128 million in gains on sale of investment securities)
- Operating leverage achieved through restrained selling, general and administrative expenses (down 1.2% year on year to ¥5,154 million)
Risks
- Risk that performance is heavily influenced by trends in the securities markets (equities and bonds), such that a sharp market decline could simultaneously worsen commission income and trading gains/losses
- Risk of global market volatility stemming from heightened U.S. reciprocal tariff and Middle East geopolitical risks (including military strikes on Iran and concerns over the closure of the Strait of Hormuz)
- Risk of decline in the market value of held bonds and contraction of bond and other trading gains/losses due to additional Bank of Japan rate hikes and rising domestic long-term interest rates (10-year JGB yield of 2.345% at fiscal year-end, up 0.86 percentage points from the prior fiscal year-end)
- Risk of earnings volatility amid deteriorating market conditions, given that bond and other trading gains/losses contracted sharply by 29.0% year on year, increasing reliance on commission income
- Foreign exchange risk associated with foreign-currency-denominated securities transactions (continued yen depreciation to ¥158.75 to the dollar at fiscal year-end) and foreign currency funding risk
- Disclosure constraint in that earnings forecasts are not disclosed, making it difficult for investors to form an outlook on business performance
Last updated: June 19, 2026