Matsui Securities 8628

松井証券

Recent Updates

2021-10-27

1H FY03/22 flash update

2021-08-27

Q1 FY03/22 report update

2021-08-26

Interim dividend forecast for FY03/22

Get in touch

1-4, KojimachiChiyoda-ku Tokyo, Japan 102-8516

https://www.matsui.co.jp/

03-5216-0606

Summary

As an independent securities broker, Matsui has a track record of launching new services ahead of competitors. In 1998, Matsui became the first brokerage company in Japan to launch internet stock trading services. In 1999, the company launched the “box rate” service, taking advantage of deregulated commissions. Box rate commissions depend on the total value of trades per day.

Capital Markets

Key dates

2014-06-04

Coverage initiation

Full Report

2021-10-27

1H FY03/22 flash update

2021-10-27

Download

Key financial data

Income statement		FY03/12	FY03/13	FY03/14	FY03/15	FY03/16	FY03/17	FY03/18	FY03/19	FY03/20	FY03/21
(JPYmn)		Cons.	Parent	Parent	Parent	Parent	Parent	Parent	Parent	Parent	Parent
Operating revenue		17,703	20,799	39,883	34,306	34,435	27,727	32,210	27,313	24,150	30,082
	YoY	-19.9%	17.5%	91.8%	-14.0%	0.4%	-19.5%	16.2%	-15.2%	-11.6%	24.6%
Net operating revenue		16,728	19,915	38,738	32,893	33,003	26,499	30,480	25,999	22,345	28,672
	YoY	-21.5%	19.1%	94.5%	-15.1%	0.3%	-19.7%	15.0%	-14.7%	-14.1%	28.3%
Operating profit		7,368	10,195	27,090	22,087	21,745	14,939	18,532	13,451	8,909	12,827
	YoY	-12.8%	38.4%	165.7%	-18.5%	-1.5%	-31.3%	24.1%	-27.4%	-33.8%	44.0%
	% of net operating revenue	41.6%	49.0%	67.9%	64.4%	63.1%	53.9%	57.5%	49.2%	36.9%	42.6%
Recurring profit		7,426	10,245	27,175	22,202	21,833	15,044	18,632	13,592	9,016	12,919
	YoY	-12.4%	38.0%	165.3%	-18.3%	-1.7%	-31.1%	23.9%	-27.1%	-33.7%	43.3%
	Recurring profit margin	41.9%	49.3%	68.1%	64.7%	63.4%	54.3%	57.8%	49.8%	37.3%	42.9%
Net income		4,263	6,427	16,300	15,571	14,763	10,697	12,908	9,562	6,136	10,283
	YoY	-21.2%	50.8%	153.6%	-4.5%	-5.2%	-27.5%	20.7%	-25.9%	-35.8%	67.6%
	Net margin	24.1%	30.9%	40.9%	45.4%	42.9%	38.6%	40.1%	35.0%	25.4%	34.2%
Per-share data
Shares issued (year-end; '000)		269,265	269,265	269,265	269,265	259,265	259,265	259,265	259,265	259,265	259,265
EPS		16.6	25.0	63.5	60.7	57.5	41.7	50.3	37.2	23.9	40.0
EPS (fully diluted)		-	-	-	60.6	57.5	41.7	50.2	37.2	23.9	40.0
Dividend per share		15.0	20.0	50.0	40.0	45.0	33.0	44.0	84.0	45.0	40.0
Book value per share		296.7	314.9	332.5	350.6	361.0	369.0	384.1	375.5	311.7	307.2
Balance sheet (JPYmn)
	Cash and cash equivalents	16,479	8,857	12,166	15,717	26,569	25,743	36,256	36,120	52,501	56,952
	Cash segregated as deposits	227,911	300,116	341,812	462,912	375,812	467,212	455,512	424,512	449,312	564,012
	Margin transaction assets	135,011	252,751	282,225	284,207	232,043	245,202	310,574	202,490	161,594	282,931
Total current assets		413,808	602,447	678,743	808,528	655,217	761,510	826,368	685,275	697,272	949,221
	Tangible fixed assets	1,047	927	998	1,039	953	958	845	1,255	1,410	1,608
	Investments and other assets	2,191	4,158	5,886	4,765	4,256	4,129	4,640	4,948	5,222	5,345
	Intangible assets	4,018	3,271	2,726	2,850	2,999	4,118	4,465	4,514	4,410	5,618
Total assets		421,063	610,804	688,353	817,183	663,425	770,716	836,318	695,993	708,314	961,791
	Deposits received	117,814	151,654	178,071	261,516	200,271	272,048	253,016	238,794	270,003	335,941
	Guarantee deposits received	113,646	149,923	176,619	207,098	182,641	205,409	207,875	202,329	212,539	248,255
	Short-term debt	56,550	137,525	176,100	164,600	128,050	126,100	187,600	97,800	78,900	207,900
Total current liabilities		343,603	528,430	600,058	724,237	567,151	672,527	734,322	596,188	624,628	879,393
	Long-term debt	25	-	150	50	-	150	50	-	150	50
Total fixed liabilities		232	433	1,009	257	208	358	258	383	556	251
Total liabilities		344,902	529,963	602,988	727,155	570,707	675,896	737,567	599,414	628,029	882,578
Total net assets		76,161	80,841	85,365	90,029	92,718	94,820	98,751	96,579	80,285	79,213
Total interest-bearing debt		56,575	137,525	176,250	164,650	128,050	126,250	187,650	97,800	79,050	207,950
Cash flow statement (JPYmn)
Cash flows from operating activities		10,388	-74,775	-18,060	21,871	43,431	11,510	-39,665	103,499	60,195	-111,926
Cash flows from investing activities		-1,439	-791	-1,142	2,068	-824	-2,014	-2,067	-2,011	-2,749	-1,607
Cash flows from financing activities		-9,310	77,102	25,910	-21,867	-48,147	-10,269	51,908	-101,650	-41,209	117,986
Financial ratios
ROA (RP-based)		1.7%	2.0%	4.2%	2.9%	2.9%	2.1%	2.3%	1.8%	1.3%	1.5%
ROE		5.6%	8.2%	19.6%	17.8%	16.2%	11.4%	13.4%	9.8%	7.0%	12.9%
Equity ratio		18.1%	13.2%	12.4%	11.0%	14.0%	12.3%	11.8%	13.9%	11.3%	8.2%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
Note: The company does not disclose earnings forecasts.

Recent updates

1H FY 03/22 flash update

2021-10-27

Matsui Securities Co., Ltd. announced earnings results for 1H FY03/22; see the results section for details.

Q1 FY03/22 Report Update

2021-08-27

Shared Research updated the report following interviews with Matsui Securities Co., Ltd.

Interim dividend forecast for FY03/22

2021-08-26

Matsui Securities Co., Ltd. announced an interim dividend forecast for FY03/22.

The company decided to pay an interim dividend of JPY20.0 per share (planned; JPY20.0 per share in FY03/21), which had previously been undetermined.

Trends and outlook

Quarterly trends and results

Cumulative							FY03/21				FY03/22
(JPYmn)							Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4
Operating revenue							7,164	14,188	21,570	30,082	7,476	15,316
	YoY						28.9%	25.9%	24.3%	24.6%	4.4%	8.0%
Net operating revenue							6,830	13,440	20,482	28,672	7,181	14,747
	YoY						32.5%	29.4%	28.8%	28.3%	5.1%	9.7%
	Commissions						4,671	8,789	13,210	18,557	4,249	8,719
			YoY				55.4%	46.1%	40.9%	37.6%	-9.0%	-0.8%
			Brokerage commissions				4,517	8,425	12,665	17,812	4,062	8,309
				YoY			58.9%	48.3%	42.5%	38.6%	-10.1%	-1.4%
				Equity and ETF			4,200	7,874	11,889	16,787	3,851	7,864
					YoY		59.3%	49.8%	43.7%	42.2%	-8.3%	-0.1%
				Futures and options			316	551	776	1,025	211	445
					YoY		53.4%	30.3%	27.0%	-2.1%	-33.2%	-19.2%
			Other commissions				154	338	494	681	177	369
				YoY			8.5%	12.3%	11.8%	14.8%	14.9%	9.2%
	Net trading income						225	414	611	828	137	374
			YoY				-20.8%	-31.2%	-26.6%	-26.1%	-39.1%	-9.7%
	Net interest income						1,934	4,236	6,659	9,286	2,795	5,653
			YoY				3.8%	12.5%	16.9%	20.1%	44.5%	33.5%
SG&A expenses							3,853	7,570	11,381	15,845	4,122	8,123
	YoY						19.0%	18.3%	17.9%	17.9%	7.0%	7.3%
	% of net operating revenue						56.4%	56.3%	55.6%	55.3%	57.4%	55.1%
Operating profit							2,977	5,869	9,101	12,827	3,060	6,624
	YoY						55.5%	47.2%	45.6%	44.0%	2.8%	12.9%
	% of net operating revenue						43.6%	43.7%	44.4%	44.7%	42.6%	44.9%
Recurring profit							3,034	5,912	9,172	12,919	3,103	6,647
	YoY						52.0%	45.4%	44.0%	43.3%	2.3%	12.4%
	% of net operating revenue						44.4%	44.0%	44.8%	45.1%	43.2%	45.1%
Net income							2,108	5,488	7,747	10,283	3,954	6,397
	YoY						53.4%	95.6%	76.1%	67.6%	87.6%	16.6%
	% of net operating revenue						30.9%	40.8%	37.8%	35.9%	55.1%	43.4%
Quarterly							FY03/21				FY03/22
(JPYmn)							Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Operating revenue							7,164	7,024	7,381	8,512	7,476	7,840
		YoY					28.9%	22.9%	21.2%	25.4%	4.4%	11.6%
Net operating revenue							6,830	6,610	7,042	8,190	7,181	7,566
		YoY					32.5%	26.4%	27.5%	27.2%	5.1%	14.5%
		Commissions					4,671	4,118	4,421	5,347	4,249	4,470
				YoY			55.4%	36.8%	31.6%	29.9%	-9.0%	8.5%
				Brokerage commissions			4,517	3,908	4,240	5,149	4,062	4,247
					YoY		58.9%	37.8%	32.3%	29.9%	-10.1%	8.7%
					Equity and ETF		4,200	3,674	4,015	4,898	3,851	4,014
						YoY	59.3%	40.2%	33.0%	38.9%	-8.3%	9.3%
					Futures and options		316	235	225	249	211	233
						YoY	53.4%	8.3%	20.3%	-43.0%	-33.2%	-0.9%
				Other commissions			154	184	155	188	177	192
					YoY		8.5%	15.7%	9.9%	24.5%	14.9%	4.3%
		Net trading income					225	189	197	217	137	237
				YoY			-20.8%	-40.6%	-14.3%	-24.7%	-39.1%	25.4%
		Net interest income					1,934	2,302	2,424	2,626	2,795	2,858
				YoY			3.8%	21.0%	25.5%	28.9%	44.5%	24.2%
SG&A expenses							3,853	3,717	3,811	4,464	4,122	4,002
		YoY					19.0%	17.7%	16.9%	18.1%	7.0%	7.7%
		% of net operating revenue					56.4%	56.2%	54.1%	54.5%	57.4%	52.9%
Operating profit							2,977	2,893	3,232	3,726	3,060	3,564
		YoY					55.5%	39.6%	42.9%	40.1%	2.8%	23.2%
		% of net operating revenue					43.6%	43.8%	45.9%	45.5%	42.6%	47.1%
Recurring profit							3,034	2,878	3,260	3,747	3,103	3,545
		YoY					52.0%	39.1%	41.4%	41.6%	2.3%	23.2%
		% of net operating revenue					44.4%	43.5%	46.3%	45.8%	43.2%	46.9%
Net income							2,108	3,381	2,258	2,536	3,954	2,443
	YoY						53.4%	135.9%	41.7%	46.1%	87.6%	-27.7%
	% of net operating revenue						30.9%	51.1%	32.1%	31.0%	55.1%	32.3%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Quarterly performance figures calculated using differences in cumulative quarterly performance.
“-” denotes YoY change of more than 1,000%.

SG&A breakdown

SG&A breakdown (cumulative)				FY03/21				FY03/22
(JPYmn)				Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4
Total SG&A expenses				3,853	7,570	11,381	15,845	4,122	8,123
	YoY			19.0%	18.3%	17.9%	17.9%	7.0%	7.3%
	Trading related expenses			1,378	2,684	4,102	5,930	1,564	3,064
		YoY		41.5%	30.8%	31.5%	29.9%	13.5%	14.2%
		Stock exchange and association fees		387	754	1,121	1,526	354	713
			YoY	38.2%	39.1%	38.6%	31.2%	-8.5%	-5.4%
		Telecom and transportation		464	930	1,400	1,903	483	949
			YoY	9.4%	10.5%	10.4%	9.7%	4.1%	2.0%
		Advertising expenses		303	561	903	1,564	492	941
			YoY	188.6%	73.1%	75.0%	67.5%	62.4%	67.7%
	Personnel expenses			703	1,356	2,033	2,833	706	1,439
		YoY		2.3%	1.7%	3.0%	8.7%	0.4%	6.1%
	Real estate-related			274	513	755	1,010	256	495
		YoY		-2.8%	-9.0%	-11.0%	-10.9%	-6.6%	-3.5%
	Office expenses			797	1,566	2,344	3,176	805	1,582
		YoY		25.1%	19.0%	16.3%	15.6%	1.0%	1.0%
	Depreciation			495	1,042	1,576	2,121	588	1,179
		YoY		-9.3%	5.0%	8.3%	10.3%	18.8%	13.1%
	Other SG&A expenses			206	409	571	775	203	364
		Taxes and dues		103	261	374	492	163	287
		Provision for doubtful account		56	59	52	94	-22	-27
		Other		48	90	144	189	62	103
SG&A breakdown (quarterly)				FY03/21				FY03/22
(JPYmn)				Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Total SG&A expenses				3,853	3,717	3,811	4,464	4,122	4,002
	YoY			19.0%	17.7%	16.9%	18.1%	7.0%	7.7%
	Trading related expenses			1,378	1,306	1,418	1,828	1,564	1,500
		YoY		41.5%	21.2%	32.9%	26.4%	13.5%	14.9%
		Stock exchange and association fees		387	367	367	405	354	359
			YoY	38.2%	40.1%	36.9%	14.7%	-8.5%	-2.2%
		Telecom and transportation		464	466	470	503	483	466
			YoY	9.4%	11.5%	10.3%	7.7%	4.1%	0.0%
		Advertising expenses		303	258	342	661	492	450
			YoY	188.6%	17.3%	79.1%	58.1%	62.4%	74.4%
	Personnel expenses			703	652	677	801	706	733
		YoY		2.3%	0.9%	5.8%	26.5%	0.4%	12.4%
	Real estate-related			274	240	241	255	256	240
		YoY		-2.8%	-14.9%	-15.4%	-10.8%	-6.6%	0.0%
	Office expenses			797	769	778	832	805	777
		YoY		25.1%	13.4%	11.1%	13.8%	1.0%	1.0%
	Depreciation			495	547	535	544	588	592
		YoY		-9.3%	22.6%	15.6%	16.2%	18.8%	8.2%
	Other SG&A expenses			206	203	162	204	203	160
		Taxes and dues		103	157	114	117	163	124
		Provision for doubtful account		56	3	-6	42	-22	-5
		Other		48	41	54	45	62	41

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Quarterly performance calculated using differences in cumulative quarterly performance.

Outline of operations

Cumulative		FY03/21				FY03/22
		Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4
Trading value (JPYtn)		9.2	17.7	26.6	37.3	9.1	18.7
	YoY	54.5%	51.5%	51.0%	48.3%	-1.9%	6.1%
	Market share	10.1%	10.2%	10.1%	10.1%	10.3%	10.2%
Equity brokerage commission rate
Equity brokerage commission rate		0.045%	0.045%	0.045%	0.045%	0.043%	0.042%
Margin trading balance and market share (long position)
Margin trading balance (JPYbn)		250.0	265.3	266.6	325.0	322.7	319.3
	YoY	11.0%	16.2%	12.9%	68.6%	29.1%	20.4%
	Market share (long position)	9.0%	8.8%	9.2%	9.0%	8.3%	7.9%
Average margin trading balance, net interest income rate
Average margin trading balance (JPYbn)		219.4	235.6	245.4	256.1	321.1	321.7
	YoY	-2.8%	3.6%	7.6%	11.7%	46.4%	36.5%
Net interest income, % of avg. margin trading balance		3.5%	3.6%	3.6%	3.6%	3.5%	3.5%
AUM and number of mutual funds
Mutual funds AUM (JPYbn)		22.5	27.9	34.1	46.5	60.0	68.6
	YoY	70.5%	87.2%	97.1%	178.4%	166.7%	145.9%
Number of mutual funds		1,261	1,262	1,364	1,447	1,497	1,564
Quarterly		FY03/21				FY03/22
		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Trading value (JPYtn)		9.2	8.4	8.9	10.7	9.1	9.7
	YoY	54.5%	48.4%	50.0%	42.1%	-1.9%	14.9%
	Market share	10.1%	10.5%	10.3%	9.9%	10.4%	10.2%
Equity brokerage commission rate
Equity brokerage commission rate		0.046%	0.044%	0.045%	0.046%	0.043%	0.041%
Margin trading balance and market share (long position)
Margin trading balance (JPYbn)		250.0	265.3	266.6	325.0	322.7	319.3
	YoY	11.0%	16.2%	12.9%	68.6%	29.1%	20.4%
	Market share (long position)	9.0%	8.8%	9.2%	9.0%	8.3%	7.9%
Average margin trading balance, net interest income rate
Average margin trading balance (JPYbn)		219.4	251.7	264.8	289.0	321.1	322.3
	YoY	-2.8%	9.9%	15.4%	24.0%	46.4%	28.0%
Net interest income, % of avg. margin trading balance		3.5%	3.7%	3.7%	3.6%	3.5%	3.5%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Quarterly figures for trading value market share are adjusted for days of operation.

Customer trends

		FY03/21				FY03/22
		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Total accounts ('000)		1,266	1,286	1,302	1,328	1,347	1,362
	YoY	5.8%	6.7%	7.4%	7.3%	6.5%	5.9%
Trading accounts ('000)		156	150	156	176	154	165
	YoY	48.1%	33.6%	20.2%	-0.6%	-1.0%	9.7%
Assets under customers' accounts (JPYtn)		2.4	2.5	2.6	2.9	2.9	3.0
	YoY	3.3%	7.2%	6.7%	37.2%	22.5%	20.8%
Unrealized loss on margin balance (long)		-8.8%	-7.5%	-6.7%	-5.1%	-6.9%	-7.4%
Unrealized loss on margin balance (long; end of month, avg.)		-10.2%	-9.6%	-8.6%	-6.2%	-7.1%	-8.4%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Figures for number of accounts and assets under customers’ accounts are quarter-end figures. The number of trading accounts is for accounts that traded stocks in each month.

Number of accounts at five major online brokers (’000)

		FY03/21				FY03/22
		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
SBI Securities		5,701	5,959	6,389	6,813	7,263
	YoY	20.9%	20.3%	24.3%	25.5%	27.4%
Rakuten Securities		4,402	4,720	5,080	5,080	6,000
	YoY	30.4%	-	35.2%	23.9%	36.3%
Monex, Inc.		1,872	1,891	1,911	1,937	1,956
	YoY	2.6%	3.2%	3.7%	4.3%	4.5%
Matsui Securities		1,266	1,286	1,302	1,328	1,347
	YoY	5.8%	6.7%	7.4%	7.3%	6.4%
au Kabucom Securities		1,172	1,192	1,225	1,272	1,305
	YoY	4.2%	5.4%	7.5%	10.5%	11.4%

Source: Shared Research based on various company data
Note: Figures may differ from company materials due to differences in rounding methods.

Assets under customers’ accounts at five major online brokers

		FY03/21				FY03/22
		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
SBI Securities		12,920	14,178	15,083	17,027	17,700
	YoY	14.7%	21.7%	23.7%	53.6%	37.0%
Rakuten Securities		7,922	8,822	9,986	11,640	12,881
	YoY	36.5%	42.7%	44.9%	76.2%	62.6%
Monex, Inc.		4,197	4,390	4,701	5,132	5,245
	YoY	4.5%	6.9%	8.8%	36.8%	25.0%
Matsui Securities		2,367	2,484	2,582	2,851	2,857
	YoY	3.3%	7.2%	6.0%	34.9%	20.7%
au Kabucom Securities		2,269	2,324	2,443	2,612	2,656
	YoY	1.8%	4.8%	3.3%	28.8%	17.1%

Source: Shared Research based on various company data
Note: Figures may differ from company materials due to differences in rounding methods.

Equity trading value at five major online brokers

Quarterly		FY03/21				FY03/22
		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Retail investors trading value on TSE and NSE		91.6	81.2	89.5	104.9	88.1
	YoY	61.2%	44.2%	43.5%	33.6%	-3.8%
SBI Securities		36.9	32.3	35.5	41.3	35.6
	YoY	83.9%	62.9%	62.4%	35.5%	-3.5%
	% of total retail investors trading value	40.2%	39.8%	39.7%	39.4%	40.4%
Rakuten Securities		24.6	22.0	23.8	27.8	24.8
	YoY	98.7%	68.0%	66.7%	42.3%	0.7%
	% of total retail investors trading value	26.9%	27.1%	26.6%	26.5%	28.1%
Monex, Inc.		5.2	4.2	4.4	5.5	4.2
	YoY	78.4%	45.8%	31.2%	24.3%	-18.5%
	% of total retail investors trading value	5.6%	5.1%	5.0%	5.2%	4.8%
Matsui Securities		9.2	8.4	8.9	10.7	9.1
	YoY	54.5%	48.4%	50.0%	42.1%	-1.9%
	% of total retail investors trading value	10.1%	10.4%	10.0%	10.2%	10.3%
au Kabucom Securities		8.4	7.7	8.2	9.2	7.1
	YoY	69.9%	58.0%	53.4%	28.1%	-14.8%
	% of total retail investors trading value	9.2%	9.4%	9.2%	8.7%	8.1%

Source: Shared Research based on various company data
Note: Figures may differ from company materials due to differences in rounding methods.

Equity trading value per account at five major online brokers

		FY03/21				FY03/22
		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
SBI Securities		6.62	5.54	5.75	6.26	5.05
	YoY	54.5%	35.1%	32.8%	8.4%	-23.7%
Rakuten Securities		5.79	4.81	4.85	5.47	4.47
	YoY	53.8%	27.9%	24.6%	10.1%	-22.7%
Monex, Inc.		2.76	2.22	2.34	2.85	2.16
	YoY	74.3%	41.7%	26.9%	19.5%	-22.0%
Matsui Securities		7.37	6.60	6.90	8.12	6.77
	YoY	46.9%	39.6%	40.1%	32.4%	-8.2%
au Kabucom Securities		7.22	6.47	6.80	7.34	5.54
	YoY	64.0%	50.7%	44.1%	17.5%	-23.2%

Source: Shared Research based on various company data (includes some estimates)
Note: Figures may differ from company materials due to differences in rounding methods.

Brokerage commissions at five major online brokers

		FY03/21				FY03/22
		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Five major online brokers total		27,659	25,153	27,152	32,497	24,849
	YoY	69.4%	50.8%	43.0%	30.7%	-10.2%
SBI Securities		11,403	10,286	10,887	12,562	9,634
	YoY	71.8%	51.8%	44.3%	15.4%	-15.5%
Rakuten Securities		6,525	6,472	7,041	8,583	6,672
	YoY	98.0%	87.4%	79.2%	66.6%	2.3%
Monex, Inc.		3,767	3,349	3,704	4,641	3,325
	YoY	74.9%	54.3%	33.2%	38.5%	-11.7%
Matsui Securities		4,517	3,908	4,240	5,147	4,062
	YoY	58.9%	37.7%	32.3%	29.8%	-10.1%
au Kabucom Securities		1,447	1,138	1,280	1,564	1,156
	YoY	3.3%	-21.0%	-15.8%	3.6%	-20.1%

Source: Shared Research based on various company data
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Brokerage commissions include futures and options commissions.

Brokerage commission rates at five major online brokers (basis points)

		FY03/21				FY03/22
		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
SBI Securities		3.1	3.2	3.1	3.0	2.7
	YoY change	-0.2	-0.2	-0.4	-0.5	-0.4
Rakuten Securities		2.7	2.9	3.0	3.1	2.7
	YoY change	-0.0	0.3	0.2	0.5	0.0
Monex, Inc.		7.3	8.0	8.3	8.5	7.9
	YoY change	-0.1	0.4	0.1	0.9	0.6
Matsui Securities		4.9	4.6	4.7	4.8	4.5
	YoY change	0.1	-0.4	-0.6	-0.5	-0.4
au Kabucom Securities		1.7	1.5	1.6	1.7	1.6
	YoY change	-1.1	-1.5	-1.3	-0.4	-0.1

Margin trading balance at five major online brokers

		FY03/21				FY03/22
		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Margin trading balance on TSE and NSE		3,242	3,483	3,203	4,058	4,169
	YoY	5.9%	12.7%	2.8%	43.1%	28.6%
SBI Securities		815	939	965	1,149	1,189
	YoY	12.9%	20.4%	16.3%	77.6%	45.9%
	% of total margin trading balance	25.1%	27.0%	30.1%	28.3%	28.5%
Rakuten Securities		463	509	550	659	717
	YoY	24.5%	24.2%	21.6%	96.3%	54.8%
	% of total margin trading balance	14.3%	14.6%	17.2%	16.2%	17.2%
Monex, Inc.		169	172	174	208	216
	YoY	10.9%	12.6%	8.1%	63.7%	27.8%
	% of total margin trading balance	5.2%	4.9%	5.4%	5.1%	5.2%
Matsui Securities		248	264	261	320	326
	YoY	11.3%	14.9%	13.1%	67.1%	31.3%
	% of total margin trading balance	7.6%	7.6%	8.2%	7.9%	7.8%
au Kabucom Securities		219	260	218	300	252
	YoY	-1.4%	-3.7%	-9.3%	30.3%	15.1%
	% of total margin trading balance	6.8%	7.5%	6.8%	7.4%	6.1%

Source: Shared Research based on various company data
Note: Figures may differ from company materials due to differences in rounding methods.

Margin trading balance per account at five major online brokers

		FY03/21				FY03/22
		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
SBI Securities		0.14	0.16	0.15	0.17	0.16
	YoY	-6.6%	0.0%	-6.5%	41.5%	14.5%
Rakuten Securities		0.11	0.11	0.11	0.13	0.12
	YoY	-4.5%	-6.2%	-10.1%	58.5%	13.6%
Monex, Inc.		0.09	0.09	0.09	0.11	0.11
	YoY	8.1%	9.2%	4.2%	56.9%	22.3%
Matsui Securities		0.20	0.21	0.20	0.24	0.24
	YoY	5.2%	7.7%	5.4%	55.7%	23.4%
au Kabucom		0.19	0.22	0.18	0.24	0.19
	YoY	-5.4%	-8.6%	-15.7%	18.0%	3.3%

Source: Shared Research based on various company data (includes some estimates)
Note: Figures may differ from company materials due to differences in rounding methods.

Financial income at five major online brokers

		FY03/21				FY03/22
		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Five major online brokers total		19,468	22,963	24,147	24,996	25,621
	YoY	-7.5%	10.2%	11.1%	25.0%	31.6%
SBI Securities		8,079	10,067	10,324	11,012	10,619
	YoY	-10.3%	11.1%	11.8%	27.4%	31.4%
	Financial income / Margin trading balance	1.1%	1.1%	1.1%	1.0%	0.9%
Rakuten Securities		4,416	5,256	6,000	6,177	6,478
	YoY	-9.2%	8.3%	21.3%	34.9%	46.7%
	Financial income / Margin trading balance	1.1%	1.1%	1.1%	1.0%	0.9%
Monex, Inc.		1,999	2,099	2,166	2,204	2,414
	YoY	-11.2%	-5.1%	-4.7%	15.0%	20.8%
	Financial income / Margin trading balance	1.4%	1.2%	1.3%	1.2%	1.1%
Matsui Securities		2,268	2,716	2,763	2,949	3,090
	YoY	0.1%	13.9%	10.4%	23.6%	36.2%
	Financial income / Margin trading balance	1.0%	1.1%	1.1%	1.0%	1.0%
au Kabucom Securities		2,706	2,825	2,894	2,654	3,020
	YoY	2.0%	21.7%	4.4%	7.3%	11.6%
	Financial income / Margin trading balance	1.2%	1.2%	1.2%	1.0%	1.1%

Source: Shared Research based on various company data
Note: Figures may differ from company materials due to differences in rounding methods.

Earnings structure of five major online brokers

Q1 FY03/22				SBI	Rakuten	Monex	Matsui	au Kabucom
(JPYmn)				Securities	Securities	Securities	Securities	Securities
Operating revenue				40,431	20,525	7,751	7,476	4,877
Net operating revenue				38,166	19,351	7,373	7,181	4,203
	Commissions			16,830	8,823	4,083	4,249	1,506
		% of net operating revenue		44.1%	45.6%	55.4%	59.2%	35.8%
		Brokerage commissions		9,634	6,672	3,325	4,062	1,156
			% of net operating revenue	25.2%	34.5%	45.1%	56.6%	27.5%
		Underwriting and distribution commissions		1,171	40	27	10	-
			% of net operating revenue	3.1%	0.2%	0.4%	0.1%	0.0%
		Subscription and distribution commissions		928	355	2	-	12
			% of net operating revenue	2.4%	1.8%	0.0%	0.0%	0.3%
		Other commissions		5,095	1,757	730	-	337
			% of net operating revenue	13.3%	9.1%	9.9%	0.0%	8.0%
	Net trading income			12,962	4,186	1,217	137	286
		% of net operating revenue		34.0%	21.6%	16.5%	1.9%	6.8%
		FX revenue		4,351	-	747	196	-
	Net interest income			9,126	5,303	2,036	2,795	2,384
		% of net operating revenue		23.9%	27.4%	27.6%	38.9%	56.7%
		Financial revenue		10,619	6,478	2,414	3,090	3,020
		Financial expenses		1,493	1,175	378	295	636
SG&A expenses				24,431	16,541	6,036	4,122	3,065
	% of net operating revenue			64.0%	85.5%	81.9%	57.4%	72.9%
Operating profit				13,734	2,809	1,337	3,060	1,138
	% of net operating revenue			36.0%	14.5%	18.1%	42.6%	27.1%

Source: Shared Research, based on various company data
Note: Figures for SBI Securities and Rakuten Securities reflect consolidated results. Figures shown for Rakuten Securities reflect its Q2 FY12/21 (April–June) results because it concludes its fiscal year on December 31.

1H FY03/22 results

Consolidated results for 1H FY03/22 (April–September 2021)

Operating revenue: JPY15.3bn (+8.0% YoY)
Net operating revenue: JPY14.7bn (+9.7% YoY)
Operating profit: JPY6.6bn (+12.9% YoY)
Recurring profit: JPY6.6bn (+12.4% YoY)
Net income: JPY6.4bn (+16.6% YoY)

Market environment

In 1H FY03/22, aggregate equity trading value at the Tokyo and Nagoya stock exchanges expanded 5% YoY, with equity trading by individuals growing 4% YoY while incurring impact from fluctuating stock prices in September 2021. The proportion of trading accounted for by individuals remained almost level YoY at 22%.

Company initiatives

The company made brokerage commission free for individuals aged 25 or younger.

More features were added to the company’s new “Matsui Securities Co., Ltd. Stock App” for smartphones, enabling the use of the stock borrowing service. In addition, the company improved and enhanced stock chart features and stock ranking information.

In FX, the company ran promotions of its new brand “Matsui Securities MATSUI FX” and focused on attracting new clients.

In mutual funds, the company continued with promotions and expanded the range of funds offered.

The company endeavored to raise the quality of services associated with its “Money Satellite” investment information medium, providing videos that teach asset management to younger people and beginners in an accessible way and promptly delivering market-related videos that are useful when making investment decisions.

Equity trading value at Matsui Securities

In 1H FY03/22, the value of individual equity trading through all brokers grew 4% YoY, and equity trading handled by Matsui Securities rose 6.1% YoY, to JPY18.7tn.

Commissions

Total commission income of JPY8.7bn was down 0.8% YoY. Brokerage commissions amounted to JPY8.3bn (-1.4% YoY), decreasing due primarily to a lower brokerage commission rate.

Trading profit/loss

The company posted a net trading profit of JPY374mn (-9.7% YoY), mainly from FX transactions.

Net interest income

Net interest income (interest and dividend income minus interest costs) of JPY5.7bn was up 33.5% YoY. The average balance of margin accounts, at JPY321.7bn, was up 36.5% YoY. The net interest income rate (calculated as net interest income divided by average balance of margin account) declined 0.1pp YoY to 3.5%.

SG&A expenses

SG&A expenses of JPY8.1bn were up 7.3% YoY.

Transaction-related expenses (including advertising expenses), which vary in line with trading value, increased 14.2% YoY to JPY3.1bn. Of this amount, stock exchange and association fees of JPY713mn were down 5.4% YoY and advertising expenses of JPY941mn were up 67.7% YoY.

Personnel expenses of JPY1.4bn were up 6.1% YoY.

Office expenses of JPY1.6bn were up 1.0%.

Depreciation of JPY1.2n was up 13.1% YoY.

Extraordinary income/loss

The company recorded extraordinary income of JPY2.6bn from the sale of investment securities (versus extraordinary income of JPY2.0bn in 1H FY03/21).

Consolidated results for Q2 FY03/22 (July–September 2021)

Operating revenue: JPY7.8bn (+11.6% YoY)
Net operating revenue: JPY7.6bn (+14.5% YoY)
Operating profit: JPY3.6bn (+23.2% YoY)
Recurring profit: JPY3.5bn (+23.2% YoY)
Net income: JPY2.4bn (-27.7% YoY)

Market environment

In Q2 FY03/22 (July–September 2021), aggregate equity trading value at the Tokyo and Nagoya stock exchanges grew 17% YoY, with equity trading by individuals increasing 18% YoY while incurring impact from fluctuating stock prices in September 2021. The proportion of trading accounted for by individuals rose 0.2pp YoY to 22%.

Equity trading value at Matsui Securities

In Q2 FY03/22 (July–September 2021), the value of individual equity trading through all brokers grew 18% YoY, and equity trading handled by Matsui Securities rose 14.4% YoY, to JPY9.7tn.

Commissions

Total commissions of JPY4.5bn were up 8.5% YoY, and brokerage commissions rose 8.7% YoY to JPY4.3bn. Despite facing a negative impact from decline in brokerage commission rate, the company saw an increase in equity trading value.

Trading profit/loss

The company posted a net trading profit of JPY237mn (+25.4% YoY), mainly from FX transactions.

Net interest income

Net interest income (interest and dividend income minus interest costs) of JPY2.9bn was up 24.2% YoY. The average balance of margin accounts, at JPY322.3bn, was up 28.0% YoY. The net interest income rate (calculated as net interest income divided by average balance of margin account) declined 0.2pp YoY to 3.5%.

SG&A expenses

SG&A expenses of JPY4.0bn were up 7.7% YoY.

Transaction-related expenses (including advertising expenses), which vary in line with trading value, increased 14.9% YoY to JPY1.5bn. Of this amount, stock exchange and association fees of JPY359mn were down 2.2% YoY and advertising expenses of JPY450mn were up 74.4% YoY.

Personnel expenses of JPY733mn were up 12.4% YoY.

Office expenses of JPY777mn were up 1.0%.

Depreciation of JPY592mn was up 8.2% YoY.

Extraordinary income/loss

Extraordinary losses amounted to JPY22mn (versus extraordinary income of JPY2.0bn in Q2 FY03/21). In Q2 FY03/21, the company booked a JPY2.0bn gain on sales of investment securities, but no similar gain was recorded in Q2 FY03/22 (July–September 2021).

Company outlook for FY03/22

Matsui’s core brokerage business is driven by stock market movements. Therefore, the company does not make public earnings forecasts. Matsui discloses selected operational metrics such as monthly equity trading value, which significantly impacts earnings.

Related indices and data

			FY03/20				FY03/21				FY03/22
			Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Nikkei 225 (JPY)			21,276	21,756	23,657	18,917	22,288	23,185	27,444	29,179	28,792	29,453
	YoY		-4.6%	-9.8%	18.2%	-10.8%	4.8%	6.6%	16.0%	54.2%	29.2%	27.0%
	QoQ		0.3%	2.3%	8.7%	-20.0%	17.8%	4.0%	18.4%	6.3%	-1.3%	2.3%
TOPIX (Tokyo Stock Price Index)			1,551	1,588	1,721	1,403	1,558	1,625	1,804	1,954	1,944	2,030
	YoY		-10.4%	-12.6%	15.2%	-11.8%	0.4%	2.4%	4.8%	39.3%	24.7%	24.9%
	QoQ		-2.5%	2.4%	8.4%	-18.5%	11.0%	4.3%	11.0%	8.3%	-0.5%	4.5%
Mothers Index			894	876	897	620	1,012	1,227	1,196	1,203	1,207	1,128
	YoY		-18.0%	-18.7%	10.5%	-35.1%	13.2%	40.0%	33.3%	94.0%	19.3%	-8.1%
	QoQ		-6.4%	-2.1%	2.5%	-30.9%	63.2%	21.2%	-2.5%	0.6%	0.3%	-6.6%
Total trading value on TSE and NSE (JPYtn)			332	332	349	437	415	368	413	470	414	432
	YoY		-17.2%	-13.8%	-20.6%	25.4%	24.7%	11.1%	18.4%	7.6%	0.0%	17.4%
Individuals trading value on TSE and NSE (JPYtn)			57	56	62	79	92	81	89	105	88	96
	YoY		-21.3%	-15.9%	-14.8%	26.7%	61.2%	44.2%	43.5%	33.6%	-3.8%	18.3%
	Individuals trading value as % of total		17.1%	17.0%	17.9%	18.0%	22.1%	22.0%	21.7%	22.3%	21.3%	22.2%
Long position in margin trading on TSE and NSE (JPYtn)			2.2	2.1	2.2	1.8	2.2	2.4	2.4	3.1	3.4	3.3
	YoY		-34.7%	-24.8%	-10.3%	-25.5%	2.3%	16.7%	8.2%	75.6%	51.9%	35.2%

Matsui's equity trading value (JPYtn)			6.0	5.7	6.0	7.5	9.3	8.5	9.0	10.7	9.1	9.7
	YoY		-23.7%	-15.6%	-17.6%	15.4%	54.3%	48.3%	50.6%	41.8%	-2.2%	14.4%
	As % of total individuals trading value on TSE and NSE		10.6%	10.3%	9.5%	9.9%	10.1%	10.5%	10.3%	9.9%	10.3%	10.2%
Matsui's average margin trading balance (JPYbn)			225.7	229.0	229.4	233.0	219.4	251.7	264.8	289.0	321.1	322.3
	YoY		-30.2%	-21.9%	-18.0%	0.2%	-2.8%	9.9%	15.4%	24.0%	46.4%	28.0%
Matsui's margin trading balance (JPYbn)			222.8	229.4	231.0	191.7	248.0	263.6	261.3	320.2	325.6	326.8
	YoY		-29.2%	-19.1%	3.5%	-17.7%	11.3%	14.9%	13.1%	67.1%	31.3%	24.0%
	Long position (JPYbn)		183.7	186.7	185.0	157.8	200.3	222.2	217.3	280.5	293.3	297.0
		YoY	-35.7%	-22.4%	-11.0%	-20.3%	9.0%	19.0%	17.4%	77.7%	46.4%	33.7%
		As % of total long position on TSE and NSE	8.5%	8.9%	8.3%	9.0%	9.0%	9.1%	9.0%	9.1%	8.7%	9.0%
	Short position (JPYbn)		39.1	42.7	46.0	33.8	47.7	41.4	44.0	39.7	32.3	29.8

Source: Shared Research based on company data
Note: TSE and NSE trading value includes ETFs and REITs.
Note: Figures for TSE and NSE trading value are after adjusting for days of operation.

Quarterly performance

				FY03/20				FY03/21				FY03/22
(JPYmn)				Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Operating revenue				5,556	5,713	6,091	6,790	7,164	7,024	7,381	8,512	7,476	7,840
	YoY			-25.5%	-17.5%	-14.4%	16.9%	28.9%	22.9%	21.2%	25.4%	4.4%	11.6%
Net operating revenue				5,153	5,231	5,521	6,440	6,830	6,610	7,042	8,190	7,181	7,566
	YoY			-27.9%	-21.1%	-18.2%	17.6%	32.5%	26.4%	27.5%	27.2%	5.1%	14.5%
	Commissions			3,005	3,010	3,359	4,116	4,671	4,118	4,421	5,347	4,249	4,470
		YoY		-25.5%	-19.2%	-16.0%	27.4%	55.4%	36.8%	31.6%	29.9%	-9.0%	8.5%
		Brokerage commissions		2,843	2,837	3,205	3,964	4,517	3,908	4,240	5,149	4,062	4,247
			YoY	-26.1%	-19.9%	-16.5%	29.8%	58.9%	37.8%	32.3%	29.9%	-10.1%	8.7%
			Brokerage commission rate	0.047%	0.050%	0.054%	0.053%	0.049%	0.046%	0.047%	0.048%	0.045%	0.044%
		Other commissions		142	159	141	151	154	184	155	188	177	192
	Net trading income			284	318	230	288	225	189	197	217	137	237
		YoY		-22.0%	3.9%	-25.6%	23.1%	-20.8%	-40.6%	-14.3%	-24.7%	-39.1%	25.4%
	Net interest income			1,863	1,903	1,932	2,037	1,934	2,302	2,424	2,626	2,795	2,858
		YoY		-32.1%	-26.9%	-20.7%	1.2%	3.8%	21.0%	25.5%	28.9%	44.5%	24.2%
		Net interest income, % of avg. margin trading balance		3.3%	3.3%	3.4%	3.5%	3.5%	3.7%	3.7%	3.6%	3.5%	3.5%
		Financial revenue		2,266	2,385	2,502	2,387	2,268	2,717	2,763	2,948	3,090	3,132
		Financial expenses		403	482	570	350	334	415	339	322	295	274
	Other operating revenue			285	318	230	287	225	189	197	217	137	238
SG&A expenses				3,239	3,158	3,259	3,780	3,853	3,717	3,811	4,464	4,122	4,002
	YoY			7.8%	5.8%	-0.9%	15.6%	19.0%	17.7%	16.9%	18.1%	7.0%	7.7%
	% of net operating revenue			62.9%	60.4%	59.0%	58.7%	56.4%	56.2%	54.1%	54.5%	57.4%	52.9%
Operating profit				1,915	2,073	2,262	2,660	2,977	2,893	3,232	3,726	3,060	3,564
	YoY			-53.7%	-43.2%	-34.6%	20.6%	55.5%	39.6%	42.9%	40.1%	2.8%	23.2%
	% of net operating revenue			34.5%	36.3%	37.1%	39.2%	41.6%	41.2%	43.8%	43.8%	40.9%	45.5%
Recurring profit				1,996	2,069	2,306	2,646	3,034	2,878	3,260	3,747	3,103	3,545
	YoY			-52.7%	-43.4%	-34.3%	19.6%	52.0%	39.1%	41.4%	41.6%	2.3%	23.2%
	% of net operating revenue			38.7%	39.6%	41.8%	41.1%	44.4%	43.5%	46.3%	45.8%	43.2%	46.9%
Net income				1,374	1,433	1,594	1,736	2,108	3,381	2,258	2,536	3,954	2,443
	YoY			-53.1%	-43.5%	-34.1%	3.3%	53.4%	135.9%	41.7%	46.1%	87.6%	-27.7%
	% of net operating revenue			26.7%	27.4%	28.9%	27.0%	30.9%	51.1%	32.1%	31.0%	55.1%	32.3%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
“-” denotes YoY change of more than 1,000%.

Because swings in Matsui’s quarterly revenues and earnings are driven in large part by trends in equity trading by individuals, changes in its market share, and changes in balances of margin trades outstanding, it is important to keep track of monthly trends these figures.

Most of Matsui’s net operating revenue comes from brokerage commissions on stock/ETF trades and net interest income, with brokerage commissions accounting for 58.5% and net interest income accounting for 32.4% of net operating income in FY03/21. Commission income from stock/ETF trades (in both cash and margin accounts) can be calculated by multiplying the total value of stock/ETF handled by Matsui by its average commission rate. Likewise, the difference between margin trading-related income and related interest expenses can be closely approximated by multiplying the average balance of margin trades outstanding by the net interest income rate.

On the cost front, we find Matsui’s variable costs equal about 10% of net operating revenue, and include trading-related expenses, which move with trading value. Matsui began cutting fixed costs after the Livedoor scandal of 2006 and continued bringing down costs through FY03/12. Costs were fairly stable for several years after that until they started trending higher again in FY03/16 as Matsui added to its service offering. Annual fixed costs were about JPY12.9bn (+16.9% YoY) in FY03/21. (See the Earnings structure section.)

This report will delve into these important factors in greater detail below.

Stock market trends a major determinant of trading volumes

Customer trading at Matsui Securities is determined largely by the amount of trading done by individual investors on the Tokyo Stock Exchange (TSE) and the Nagoya Stock Exchange (NSE), and Matsui’s market share.

In the ten years from April 2011 through March 2021, the monthly correlation coefficient between the Tokyo Stock Price Index (TOPIX) and the value of individual investors’ trading on the two markets was 0.79, indicating a strong correlation between the value of trading by individuals and stock-price indices. During this 10-year timeframe, trading by individual investors on the Tokyo and Nagoya stock exchanges as a percent of all trading ranged between a low of 15% and a high of 32%, this figure showing a monthly correlation coefficient of 0.59 with the TOPIX.

Matsui’s share of equity trading value of individuals was steady at around 8% between FY03/08 and FY03/13, after the price war on commissions settled down (for details, see “Market and value chain” section).

In January 2013, the company launched the Margin Trading Service for Day-trades, a service aimed at day traders. Matsui’s share of equity trading value of individuals on the TSE and NSE increased after that, reaching a high of 13.0% in FY03/17. Matsui began losing market share after that as Rakuten Securities followed up the February 2016 launch of its Ichinichi margin trading service for day-traders with further enhancements, including lowering the threshold for qualifying for zero interest on margin loans and stock borrowing. By FY03/21, Matsui Securities’ share of equity trading by individual investors was down to 10.1%.

Brokerage commission rates change as Ichinichi margin trading service for day-traders grows to account for larger portion of trades handled and company raises upper limit for principal value of trades in a single day that are eligible for commission-free trading

Due to a policy not to engage in commission price wars, from FY03/08 through FY03/12, the company’s commission rates were stable at 0.11–0.13%. Commission rates, an indicator of customer trends, are calculated with this formula: commissions (including those on futures and options) ÷ equity trading value (including ETFs and REITs, but not futures and options).

The company’s Ichinichi margin trading service for day-traders does not charge commissions (1.8% annual interest and stock lending fee for customers whose trading value per transaction are less than JPY1.0mn), so related increases in trading value has limited impact on earnings. So, while Matsui’s equity trading value has trended higher since the launch of its Ichinichi service, this increase in trades that do not generate commissions has pushed down the company’s average brokerage commission rate. It has been about 0.05% since Q4 FY03/14, with trades in Ichinichi accounts comprising some 50–60% of the equity trading value.

Previously, the upper limit for the principal value of trades in a single day that are eligible for commission-free trading was JPY100,000, but in December 2019, the company revised its rate schedule and extended the upper limit to JPY500,000. The company says it had been getting roughly 8% of its brokerage commission income from accounts making trades in a single day with a combined principal value of between JPY100,000 and JPY500,000, so this move did bite into its brokerage commission income, pushing down its average brokerage commission rate from Q4 FY03/20 onward down to about 0.09% (excluding the Margin Trading Services for Day-trades), from about 0.10% previously.

Stock market trends a major determinant of margin trading balances

Like stock market turnover, the balance of margin trades outstanding is influenced greatly by overall direction of the stock market. In the ten years between April 2011 and March 2021, the monthly correlation between the Tokyo Stock Price Index (TOPIX) and the balance of margin trades outstanding on the Tokyo and Nagoya stock exchanges was 0.82, showing a strong correlation between margin trade balances outstanding and stock prices.

During this same timeframe, Matsui market share on this metric was about 9.0%.

Major factors expected to impact revenues and earnings in FY03/22

Other than trends in the economy and the stock market as a whole, the following factors are expected to have a significant impact on company revenues and earnings in FY03/21:

Forex business initiatives

Previously, the company had been at a disadvantage in the forex business because its bid-ask spread (de facto commission rate) was wider than the competition. Also, in FY03/20, the share of forex revenue overall was just about 4%, the lowest of the five major online brokers (see Market and Value Chain section).

From FY03/20, the company took several initiatives to improve its competitiveness in forex services. It narrowed spreads, increased the number of currency pairs available to trade, and lowered the minimum trading unit. In July 2020, the company tightened its bid-ask spread on all currency pairs handled by its forex trading service. The company’s previous bid-ask spread of JPY0.01–0.02 on USD/JPY was not competitive with other forex trading services. As a first step, the company cut its bid-ask spread down to JPY0.005 and lowered it on all currency pairs. In February 2021, the company launched “Matsui Securities MATSUI FX,” its new forex brand. The makeover entailed a newly designed logo and new official website, and spreads tightened to the narrowest in the industry (to JPY0.002 for USD/JPY). It also offers trades from as little as JPY100 by lowering the minimum trading unit to single currency units and increased the number of currency trading pairs from 13 to 20.

Following the forex brand makeover, in Q4 FY03/21, the value of forex margin trades handled by the company was JPY10.6tn (+306.9% YoY, +41.4% QoQ) and generated income of JPY230mn (-14.2% YoY, -4.6% QoQ). While transaction value increased, income declined due to narrower spreads.

The company thinks that in the future, growth in the number of trading accounts and trading value should more than offset the drag on income from narrower spreads, and expects forex income to grow from FY03/22 onward. The company also said that there is a tendency for customers in their 20s through 40s to start with forex trading among the various products on offer by brokers. It is possible to trade with smaller amounts than stocks, and there are fewer options to choose from. The company said it thus hoped to grow the number of accounts in the younger demographic by revamping its forex service and promoting it through advertising.

Service enhancements

Enhancements that could affect earnings in FY03/22 include waiving commissions for those 25 and under and launching trading in US stocks. Shared Research thinks that the company is also considering launching cryptocurrency trading and contracts for difference (CFDs).

Waiving commissions for those 25 and under

From May 2021, the company waived box rate commissions on stock transactions (cash and margin transactions) for customers 25 and under. The company said it hoped this would help youthful customers build wealth as they approached significant life events such as joining the workforce, changing jobs, getting married, having children, and raising children. The company said that life events sparked a review of asset formation and it is running promotions under the tagline “Life and Matsui.” Waiving commissions for those 25 and under forms part of its initiatives in the area.

The company said that those 25 and under accounted for 4% of its customer accounts as of March 2021, and for 0.4% of trading in FY03/21. Shared Research understands that waiving commissions for this age group will thus have a negligible impact on the company’s earnings.

Trading US stocks

The company thinks its absence in product and service areas where competitors have an offering could preclude potential new customers from opening accounts. It is thus broadening its lineup. To this end it plans to launch US stock trading services during FY03/22. Among the major online brokers, SBI Securities, Rakuten Securities, and Monex offer US stock trading. According to Monex, in Q4 FY03/21 (January–March 2021) over 20% of brokerage commissions in its Japan segment came from US stock trades.

Online brokers’ US stock trading services

	No. of US stocks	Brokerage fee	Currency exchange commissions
Monex, Inc.	Over 4,000	0.45% of trading value (min: USD0, max: USD20)	JPY0 when buying (JPY0.25/USD when selling)
SBI Securities	Over 4,000	0.45% of trading value (min: USD0, max: USD20)	JPY0.25/USD/side (JPY0.04/USD/side when trading via SBI Sumishin Net Bank)
Rakuten Securities	About 3,700	0.45% of trading value (min: USD0, max: USD20)	JPY0.25/USD/side

Source: Shared Research based on company materials

Increase in expenses

On the expense front, the addition of new services is pushing up office-related expenses and depreciation. The company has also been increasing spending on advertising and promotion since FY03/19.

Breakdown of SG&A expenses

(JPYmn)			FY03/12	FY03/13	FY03/14	FY03/15	FY03/16	FY03/17	FY03/18	FY03/19	FY03/20	FY03/21
SG&A expenses			9,360	9,719	11,648	10,806	11,258	11,560	11,949	12,547	13,436	15,845
	YoY		-27.3%	3.8%	19.8%	-7.2%	4.2%	2.7%	3.4%	5.0%	7.1%	17.9%
	% of net operating revenue		56.0%	48.8%	30.1%	32.9%	34.1%	43.6%	39.2%	48.3%	60.1%	55.3%
	Trading related expenses		3,104	3,356	4,957	4,719	4,674	4,345	4,592	4,408	4,566	5,930
		YoY	-7.8%	8.1%	47.7%	-4.8%	-1.0%	-7.0%	5.7%	-4.0%	3.6%	29.9%
		Commissions paid	425	455	786	779	770	735	830	791	734	937
		Stock exchange and association fees	707	886	1,912	1,755	1,738	1,409	1,527	1,237	1,163	1,526
		Telecom and transportation	1,493	1,477	1,665	1,638	1,692	1,672	1,699	1,725	1,735	1,903
		Advertising expenses	479	538	594	547	475	531	536	655	934	1,564
	Personnel expenses		1,809	1,832	2,075	2,030	2,178	2,227	2,364	2,661	2,607	2,833
		YoY	-8.4%	1.3%	13.3%	-2.2%	7.3%	2.2%	6.2%	12.6%	-2.0%	8.7%
	Real estate-related		1,077	925	905	878	890	891	845	870	1,134	1,010
		YoY	-4.5%	-14.1%	-2.2%	-3.0%	1.4%	0.1%	-5.2%	3.0%	30.3%	-10.9%
		Real estate expenses	348	319	318	325	325	327	342	349	355
		Furniture and fixtures	749	605	586	553	564	563	503	522	779
	Office expenses		1,742	1,625	1,745	1,677	1,713	1,841	2,104	2,385	2,747	3,176
		YoY	-9.8%	-6.7%	7.4%	-3.9%	2.1%	7.5%	14.3%	13.4%	15.2%	15.6%
		Outsourcing expenses	1,735	1,621	1,740	1,673	1,708	1,835	2,098	2,378	2,739
		Office supplies expenses	6	5	5	5	5	5	6	7	8
	Depreciation		1,769	1,788	1,635	1,246	1,175	1,267	1,549	1,691	1,923	2,121
		YoY	-3.1%	1.1%	-8.6%	-23.8%	-5.7%	7.8%	22.3%	9.2%	13.7%	10.3%
	Taxes and dues		98	116	226	194	288	362	406	340	296	492
	Provision for doubtful accounts		-346	-36	-68	-77	216	311	-29	56	-28	94
	Other		108	114	173	138	123	317	117	136	192	189

Source: Shared Research, based on company data

Office-related expenses on the rise

Outsourcing costs account for the largest part of Matsui’s office-related expenses, with much of this representing spending on systems maintenance and management. Office-related expenses are trending upward as the company broadens its product and service lineup, such as mutual funds (in November 2016) and relaunch of forex services in FY03/21.

Depreciation charges also trending higher

Between FY03/11 and FY03/15, the company budgeted roughly JPY1.0bn a year for capital spending (on both tangible and intangible fixed assets). In contrast, since FY03/16 the company’s capital spending has averaged around JPY2.0bn a year. Reflecting new investments in systems and equipment to support its growing mutual fund business, and other new services such as its Best Match price enhancement service, the increase in capital spending has been accompanied by an increase in depreciable assets and rising depreciation charges.

Capital spending and depreciation

		FY03/12	FY03/13	FY03/14	FY03/15	FY03/16	FY03/17	FY03/18	FY03/19	FY03/20	FY03/21
(JPYmn)
Depreciable assets		4,624	3,759	3,289	3,455	3,517	4,642	4,875	5,335	5,386	6,792
	Buildings and equipment	612	493	563	605	518	524	410	821	976	1,174
	Software	4,012	3,266	2,726	2,850	2,999	4,118	4,465	4,514	4,410	5,618
Capital expenditures		-1,492	-860	-1,161	-874	-1,804	-1,945	-2,029	-1,858	-2,304	-3,067
	Purchase of tangible fixed assets	-15	-8	-221	-9	-169	-118	-9	-327	-276	-429
	Purchase of intangible assets	-1,477	-852	-940	-865	-1,635	-1,827	-2,020	-1,531	-2,028	-2,638
Depreciation		1,769	1,788	1,635	1,246	1,175	1,267	1,549	1,691	1,923	2,121

Source: Shared Research, based on company data

Company also stepping up spending on advertising

Concerned by its low name recognition among young people, Matsui Securities has been stepping up its spending on advertising since the latter half of FY03/19. Prior to FY03/19, Matsui had been spending around JPY500mn a year on advertising. This figure went up to JPY665mn in FY03/19 and then up to JPY934mn in FY03/20 (including increased payouts for pay-for-performance ads that led to new account openings). The company spent JPY1.6bn on advertising in FY03/21, including ads aimed at further increasing its name recognition and mass promotions aimed specifically at attracting new forex trading accounts.

In FY03/22, the company will incur costs for mass advertising campaigns following the February 2021 relaunch of its forex services. It will also pay increased performance-based commissions depending on progress in account openings at its new Matsui Securities MATSUI FX. According to the company, the lifetime value (LTV) of forex customers exceeds that of stock trading customers, and the cost per acquisition (CPA: performance-based advertising expenses per account opening) is also higher. However, the company added that because forex LTV is greater than CPA, future revenue from forex account openings will outpace growth in advertising expenses.

Dividend forecast

For FY03/20 Matsui paid a total of JPY45.0 in dividends per share, consisting of an interim dividend of JPY22.5 per share and a fiscal year-end dividend of JPY22.5 per share. The FY03/20 dividend represented a dividend payout ratio of 188.4%.

The company set its interim dividend for FY03/21 at JPY20.0 per share and plans to propose a year-end dividend of JPY20.0 per share to the ordinary general meeting of shareholders. This would bring the full-year dividend JPY40.0 per share.

Medium/long-term Outlook

Matsui Securities does not disclose its medium-term business plan. Shared Research understands that stock/ETF brokerage commissions and net interest income (which accounted for 58.5% and 32.4% of net operating revenues in FY03/21) will continue to account for the bulk of net operating revenue, and thus its earnings will continue to be heavily influenced by stock market fluctuations (see section on Earnings Structure below). After all, brokerage commission income is nothing more than the value of stock/ETF trades handled times the average commission rate and net interest income is calculated simply by multiplying the average balance of margin trades outstanding by the net interest rate. The main factors outside of the stock market that have the potential to drive the company’s performance over the medium term include its market shares of trading by individuals and outstanding margin transactions.

Other areas are the company’s initiatives in mutual fund sales, forex trading services, stock lending services, and new service areas outside of stock and ETF trading, as discussed in greater detail below.
In this relation, Shared Research notes that Matsui focused on its online stock brokerage business and lagged behind other major online brokers in the handling of mutual funds and strengthening forex products up to FY03/16. Since FY03/17, however, Matsui has accelerated efforts to grow services other than stock brokerage, including the launch of mutual fund sales in November 2016 and switching to dealing-desk trading model in the forex business in May 2017 to expand and diversify its sources of earnings.

Market share of equity trading by individual investors

Stock trading value, the main determinant of brokerage commissions, can be broken down into aggregate equity trading value by individuals at the Tokyo and Nagoya stock exchanges and the company’s market share. Of these, aggregate equity trading value tends to fluctuate due to stock market price movements. Meanwhile, the company’s market share has fluctuated due to the following factors.

Online brokers’ share of overall equity trading value of individuals

Online brokers’ share of overall equity trading value of individuals is on a long-term upward trend. Five online brokers’ (Matsui, SBI Securities, Rakuten Securities, Monex, Inc., and au Kabucom Securities) share of equity trading value of individuals has climbed from 29% in FY03/02 to 91% in FY03/21 (see Market and Value Chain section below). We expect the five online brokers’ share to continue rising moderately because of the ease of trading via computer or smartphone and their lower trading costs.

Matsui’s market share of equity trading by individual investors

Matsui’s share of overall equity trading value of individuals rose following the launch of its Ichinichi margin trading service for day-traders in January 2013 and continued rising through Q2 FY03/17. During FY03/14, the company’s share of equity trading value (cash and margin) of individuals shrank for services other than Ichinichi, and has been hovering around 5.0%–6.0% since then. Meanwhile, Matsui’s Ichinichi accounts covered an increasingly high share of all equity trades by individuals from the launch of the margin trading service in Q4 FY03/13 through Q2 FY03/17.

The market share of Matsui’s Ichinichi margin trading service for day-traders has been coming down since Q3 FY03/17 following changes made by Rakuten Securities to its margin trading service for day-traders, namely lowering the threshold for margin day-trades that qualify for zero interest and zero stock lending fees (from JPY3.0mn to JPY1.0mn).

Matsui’s share of equity trading value by individuals tends to rise at times of heightened equity market volatility and when trading of stocks on markets for emerging companies is active as investors utilize the company’s margin trading service for day traders. Shared Research believes this is because Matsui has a higher share of accounts involved in margin trading than other online brokers and many customers employ leverage to trade the more volatile stocks on markets for growth companies.

Matsui share of equity trading value of individuals

			FY03/12	FY03/13	FY03/14	FY03/15	FY03/16	FY03/17	FY03/18	FY03/19	FY03/20	FY03/21
Total trading value on TSE and NSE (JPYtn)			112	155	385	314	331	266	317	274	254	367
Matsui trading value (JPYtn)			8	13	40	37	39	35	35	28	25	37
	Market share		7.2%	8.2%	10.5%	11.7%	11.7%	13.0%	11.2%	10.3%	9.9%	10.1%
	Excluding Margin Trading Service for Day-trades		8	11	25	18	19	15	17	13	12	18
		Market share	0.0%	1.0%	4.0%	5.8%	6.0%	7.4%	5.8%	5.6%	5.3%	5.2%
	Margin Trading Service for Day-trades (JPYtn)		-	2	15	18	20	20	18	15	13	19
		Market share	0.0%	1.0%	4.0%	5.8%	6.0%	7.4%	5.8%	5.6%	5.3%	5.2%

Source: Shared Research based on company data

Matsui’s market share of margin trading balances

The balance of margin trades is a key determinant of net interest income. This can be broken down into the balance of margin trades at the Tokyo and Nagoya stock exchanges and the company’s market share. Of these, the balance of margin trades tends to fluctuate due to stock market price movements. The aggregate value of cash stock holdings and margin buys tends to exceed margin sales in portfolios of individual investors, the online brokers’ main customers. This means that when stock prices are rising customer assets are increasing and they have increased buying capacity, leading to a tendency for rising margin trading balances. Conversely, during market corrections, buying capacity declines, and margin trading balances tend to fall. The company’s market share has trended steadily at around 9%.

Matsui’s share of margin trading balances

		FY03/12	FY03/13	FY03/14	FY03/15	FY03/16	FY03/17	FY03/18	FY03/19	FY03/20	FY03/21
Margin trading balance on TSE and NSE (JPYbn)		1,389	2,418	3,128	3,038	2,679	2,626	3,557	2,356	1,754	3,080
Matsui margin trading balance (JPYbn)		133	254	273	278	234	243	306	198	158	281
	Share of total margin trading balance	9.6%	10.5%	8.7%	9.2%	8.8%	9.3%	8.6%	8.4%	9.0%	9.1%

Source: Shared Research based on company data

Company initiatives aimed at expanding businesses outside of stock trading

As part of an effort to increase earnings in the medium term, Matsui Securities intends to expand its product and service offering outside of brokerage services geared toward high-frequency-trade customers. Specifically, the company plans to expand earnings by launching asset-management operations centering on mutual funds and by changing the business model for forex margin-trading.
Further, in the brokerage business Matsui plans to continue working to improve customer service and expand its own profit opportunities.

Launched mutual fund sales and portfolio proposal service (in November 2016)

Matsui started handling mutual funds and introduced the Toshin Kobo portfolio proposal service based on a proprietary “robo-advisory” system in November 2016.

Matsui’s Toshin Kobo service handles everything from the portfolio proposal stage to ongoing portfolio management, with the portfolio proposals being based on customers’ answers to eight questions that indicate what portfolio is most suitable to that individual’s needs. Toshin Kobo effectively replaces the stock broker and this, together with the company’s growing lineup of low-cost mutual funds, helps customers reduce their asset management costs. By bringing down costs, the company intends to improve the performance of customer accounts over the longer term.

As of the end of FY03/21, Matsui’s mutual fund lineup was up to 1,477 funds, providing a broad selection comparable to competing brokers, and total customer assets held in mutual funds reached JPY46.5bn.

Customer assets invested in mutual funds and number of mutual funds offered

Cumulative		FY03/19				FY03/20				FY03/21
		Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4
Sales of mutual funds (JPYmn)		3,200	6,100	9,000	11,400	4,300	9,300	15,000	23,300	6,900	15,200	25,000	42,600
	Saving type of investment (JPYmn)	700	1,400	2,100	2,800	800	1,700	2,600	3,800	1,500	3,400	5,600	8,300
Quarterly		FY03/19				FY03/20				FY03/21
		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
AUM of mutual funds (JPYmn)		9,300	10,600	10,100	12,100	13,200	14,900	17,300	16,700	22,500	27,900	34,100	46,500
Number of mutual funds		479	558	670	805	953	1,092	1,234	1,258	1,261	1,262	1,364	1,447
Sales of mutual funds (JPYmn)		3,200	2,900	2,900	2,400	4,300	5,000	5,700	8,300	6,900	8,300	9,800	17,600
	Saving type of investment (JPYmn)	700	700	700	700	800	900	900	1,200	1,500	1,900	2,200	2,700

Source: Shared Research, based on company data

In the past, Matsui thought it was best to simply focus on its stock brokerage business and not waste time trying to diversify, and thus when it finally started offering mutual funds in November 2016 it was more than ten years behind other online brokers. This late start notwithstanding, Shared Research sees Matsui continuing to work towards building up its mutual fund business and increasing its name recognition, and believes that with the help of these efforts it may well be able to grow its mutual fund business over the medium term to the point where the amount of customer assets held in mutual funds is comparable to the levels seen at the other major online brokers.

Mutual funds account for roughly 17% of customer assets under custody at other online brokers

As of the end of March 2021, the combined value of mutual funds held in customer accounts at the four major online brokers other than Matsui was JPY6.3tn (versus JPY3.8tn at the end of March 2020), representing 17% of the JPY36.4tn in total customer assets under custody at the four brokers (versus 16% of total customer assets under custody of JPY23.5tn at the end of March 2020).

In contrast, customer accounts at Matsui held only JPY46.5bn in mutual funds at the end of March 2021 (versus JPY16.7bn at the end of March 2020), only 1.6% of total customer assets under custody (versus 0.8% at the end of March 2020). As for prospects over the medium term, if we assume JPY2.9tn in customer assets under custody at Matsui, raising the proportion of customer assets held in mutual funds up to 15%—or roughly the same level as the other four major online brokers—would mean bringing the balance of mutual funds at Matsui accounts up to roughly JPY420bn.

As of March 2019, relatively inactive traders (those with 10 or fewer trades per month) accounted for 96% of customer accounts and 79% of the assets under customers’ accounts. But those customers represented only 10% of trades (in value terms). In the past, Matsui Securities did not have enough investment products to offer these customers with heavy assets but who did not trade very often. Shared Research believes that Matsui Securities may have found a way to alleviate this problem with mutual funds and the launch of the portfolio proposal service and this may start generating more revenue from its large base of relatively inactive accounts.

Revenue and expenses related to mutual fund sales and portfolio proposal service

Generally speaking, securities brokers handling mutual funds earn commissions from the sale of mutual funds to customers, those sales commissions being based on the size of the mutual fund sold (in monetary terms); after the initial mutual fund sale, on an ongoing basis securities brokers collect a portion of the custodian fees earned by the fund management company as additional compensation for being the sales agent (agency fee), the size of the custodian fee being dependent on the size of assets under management. On the income statement of brokers, sales commissions are listed under “commissions for underwriting, secondary distribution and solicitation for selling and others for professional investors” while the agency fees are listed under “other fee income.”

Matsui’s mutual fund lineup is comprised mainly of no-load funds. Matsui started handling some load funds in November 2018, but the load/no-load distinction has become irrelevant now that Matsui has eliminated all sales commissions on mutual funds. After eliminating all sales commissions on mutual funds in December 2019, Matsui is left with its share of the custodial fees (earned as the seller) as its sole source of income from its mutual fund business. Although fees for mutual fund custodial services can range from as low as 0.02% to as much as 1.00% of assets, starting in April 2020 Matsui, capped its custodial fee at 0.3% and any amount above that is being rebated in cash to customer accounts. Still, with mutual funds accounting for only JPY46.5bn of customer assets under custody as of the end of FY03/21, the impact of the mutual fund business on overall earnings is still quite small at this point.

On the expense front, the company sees little impact on earnings from the expenses associated with developing and operating the robo-advisory system it developed on its own. Startup expenses for the portfolio proposal service were about JPY1.0bn, including development costs for the robo-advisory service and the related trading and settlement system. However, since some of this expense was covered by regular IT spending, the increase in amortization charges came to around JPY100mn per annum. Operating costs for the new system added about JPY100mn a year to expenses.

Initiatives aimed at increasing customer assets invested in mutual funds

In addition to expanding its mutual fund lineup, the company has also put into action a number of other initiatives aimed at increasing the amount of customer assets invested in mutual funds, as detailed below.

Began offering load funds with customers receiving rebates in the form of loyalty points (November 2018): Having started its own loyal point program (Matsui Securities Points), the company began adding load funds to its mutual fund lineup with customers receiving rebates on the sales commission charged on those funds in the form of loyalty points.

Launched new robo-advisory services Toshin Teian Robo and Toshin Minaoshi Robo (December 2018): Toshin Teian Robo helps investors create a mutual fund portfolio while Toshin Minaoshi Robo helps investors rebalance their mutual fund portfolios. As the basis for their recommendations, both these robo-advisory services use QUICK Fund score.

QUICK Fund score: A scoring system for ranking mutual funds developed by QUICK Asset Management Research Institute that ranks mutual funds in terms of investor suitability

Financial planning simulation tool (January 2019): Matsui Securities has also begun a new service known as Matsui FP, a life plan simulation tool that allows people to use smartphones to interface with a financial planner who will help them assess and design a life financial plan using the web; it includes a feature that allows them to simulate various mutual fund savings plans.

Eliminating all sales commissions on mutual fund sales (December 2019): After previously rebating sales commission on load funds in the form of customer reward points, in December 2019, Matsui decided to eliminate sales commissions on all of the mutual funds it handles.

Cash rebate of part of mutual fund custodial fees (April 2020): Matsui decided to cap the custodial fee it receives as the seller of the mutual fund at 0.3%, with any amount above that being rebated in cash to customers on a monthly basis.

Plans for increasing revenue generated by forex margin transactions

From FY03/20, the company took several initiatives to improve its competitiveness in forex services. It narrowed spreads, increased the number of currency pairs available to trade, and lowered the minimum trading unit. In February 2021, the company launched “Matsui Securities MATSUI FX,” its new forex brand. The makeover entailed a newly designed logo and new official website, and spreads tightened to the narrowest in the industry (to JPY0.002 for USD/JPY). It also offers trades from as little as JPY100 by lowering the minimum trading unit from 1,000 currency units to one. It also increased the number of currency trading pairs from 13 to 20.

The company thinks that in the future, growth in the number of trading accounts and trading value should more than offset the drag on income from narrower spreads, and expects forex income to grow from FY03/22 onward. The company also said that there is a tendency from customers in their 20s through 40s to start with forex trading among the various products on offer by brokers. It is possible to trade with smaller amounts than stocks, and there are fewer options to choose from. The company said it thus hoped to grow the number of accounts in the younger demographic by revamping its forex service and promoting it through advertising.

Forex margin trading: profit margin and net trading profit

Quarterly		FY03/19				FY03/20				FY03/21
		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
OTC FX margin trading (JPYtn)		1,002	865	959	914	762	940	823	1,741	1,491	1,521	1,612	1,551
	YoY	-1.2%	-19.2%	4.5%	-22.3%	-23.9%	8.7%	-14.2%	90.4%	95.6%	61.8%	95.8%	-10.9%
Matsui's NetFx trading value (JPYtn)		1.7	1.4	1.4	1.4	1.1	1.6	1.1	2.6	2.5	4.3	7.5	10.6
	YoY	-30.2%	-50.6%	-34.4%	-41.9%	-37.0%	14.5%	-21.3%	87.2%	127.5%	170.3%	581.5%	306.9%