kabu.com securities co., ltd. chief executive officer ... · 1993 joined dai-ichi securities co.,...
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©2001-2017 kabu.com Securities Co., Ltd. All rights reserved. 0
kabu.com Securities Co., Ltd. Chief Executive Officer Masakatsu Saito
CLSA Japan Forum 2017
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
2. Online Brokerage Industry
1. Company Profile
3. Overview of Our Business Condition
1
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved. 2
Company name kabu.com Securities Co., Ltd.Business domain Online brokerage for mainly individual investorsEstablished November 1999
Stock exchange listing
Tokyo Stock Exchange 1st Section (Code: 8703)JPX-Nikkei Index 400 Constituent
Headquarters TokyoCapital stock 7,196 million yenCorporate Governancestructure
Company with nominating committee, etc.
Main shareholders Mitsubishi UFJ Securities Holdings: 52.1%Bank of Tokyo Mitsubishi UFJ: 6.2%
Credit rating A+ (JCR : long-term issuer rating)
No. of employees 134 (including 99 persons who hold official qualifications as Information Processing Engineer issued by Japan’s Ministry of Economy, Trade and Industry)
No. of customers 1,035,750Amount of customerassets 2,107 billion yen (as of the end of Dec. 2016)
1. Company Profile
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
[Career summary]1989 Joined Nomura System Services Co., Ltd.1993 Joined Dai-ichi Securities Co., Ltd.1998 Joined ITOCHU Corporation
Participated in Online Securities Establishment Project
1999 Joined Japan Online Securities Co., Ltd.; General Manager, Information Systems Department
2001 Executive Officer, kabu.com Securities Co., Ltd.2002 COO, kabu.com Securities Co., Ltd.2004 President and CEO, kabu.com Securities Co., Ltd.
(current position)
[Outside positions]
・ Secretary General, Keidanren (Japan Business Federation)・ Director, Japan Data Management Consortium・ Vice-chairman , Net Securities Association, Japan Securities Dealers Association・ Committee Member, Finance and Securities Education Support Committee,
Japan Securities Dealers Association・ Mentor, MUFG FinTech Accelerator 2016Others
Masakatsu Saito, President and CEO
(as of the end of Dec. 2016)
2. President’s Career Summary
3
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
FinTech
Developing rigid business base for more distribution of surplus to customers and shareholders
Developing rigid business base for more distribution of surplus to customers and shareholders
Transfer of financial assets to the baby
boomers
Transfer of financial assets to the baby
boomers
Transfer of financial assets to the baby
boomers
Financial/capital markets becoming more information
processing-oriented
Financial/capital markets becoming more information
processing-oriented
Financial/capital markets becoming more information
processing-oriented
Advancement of internet/telecommuni-cations environment
Advancement of internet/telecommuni-cations environment
Advancement of internet/telecommuni-cations environment
RegulationsAbenomicsAbenomicsAbenomics
• Only leading online brokerage that has developed all systems in-house
• Capable of high-speed high-functional transactions
• Seamless connection with settlements infrastructure
• Low-cost operation with our own business core system
System and IT strength
MUFG Group strength
Shift towards the unified taxation on financial
income
Shift towards the unified taxation on financial
income
Shift towards the unified taxation on financial
income
Deregulation/System revisions
Deregulation/System revisions
Deregulation/System revisions
Introduction of the Junior
NISA
Introduction of the Junior
NISA
Introduction of the Junior
NISA
“From savings to Asset formation”“From savings to Asset formation”“From savings to Asset formation”
JPX system(arrowhead, J-GATE)
JPX system(arrowhead, J-GATE)
JPX system(arrowhead, J-GATE) My Number
SystemMy Number
SystemMy Number
System
Enhanced financial literacy of individualsEnhanced financial
literacy of individualsEnhanced financial
literacy of individuals
Development of smart phones/tablet devicesDevelopment of smart phones/tablet devicesDevelopment of smart phones/tablet devices
SNS/VideoVideo phoneSNS/Video
Video phoneSNS/Video
Video phone
System utilization
System utilization
Online retail business strategies
Online retail business strategies
Group collaboration
Group collaboration
• One of the leading global financial groups• Retains blue-chip customers in the baby
boom generation• MUFG’s brand strength and reliability• High credit rating/solid financial strength
backed by superior creditworthiness
Social infrastructure
Creditworthiness/Brand strength
Fiduciary duty
iDeCo
3. Environment Surrounding kabu.com
4
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved. 5
A member of the Mitsubishi UFJ Financial Group (MUFG)The only online securities company that is part of a megabank group in Japan
The only leading online brokerage that has developed and operates all securities systems in-house
The only leading online securities company with all systems in-house
One of the top 5 online brokerageTop five companies account for more than 80% of individual equity trading
Proactive in providing returns to shareholdersROE20% is the managements’ objective since its stock listing
Solid corporate governanceHas developed corporate governance as a company with nominating committee, etc.
4. Key Features of kabu.com
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
MUFG
Bank of TokyoMitsubishi UFJ
Mitsubishi UFJ Trust and Banking
Mitsubishi UFJ Securities Holdings
Morgan Stanley
KDDI kabu.com Securities
<online securities>
Mitsubishi UFJMorgan Stanley
Securities<general securities>
Morgan Stanley MUFG
Securities
Mitsubishi UFJ Morgan Stanley PB Securities
<services for affluent customers>
Jibun Bank<online/mobile bank>
Mitsubishi UFJ Kokusai Asset Management
Mitsubishi UFJ NICOS
22%
51%
49%60%
40%
52%6%50%
100% 100%100%
75%25%
85%
50%
51% 15%
15%
(Percentage figures indicate the voting rights ratio.)
5. Alliance with MUFG Group
6
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
6. Management strategy ~utilizing MUFG Group strength~
MUFG Group
Products, services, customer baseInternet-related
<System collaboration>・Provision of system infrastructure to each MUFG Group company
< Provision of infrastructure/provision of ASP >・Provision of FX platform to Jibun Bank
<Online financial instruments intermediation services>
・Can access 36 million accounts of Bank of Tokyo-Mitsubishi UFJ and 2.35 million accounts of Jibun Bank・Collaborate with Mitsubishi UFJ NICOS as well as MUFG’s partner regional banks
<Products>・IPO/PO, foreign bonds, investment trust/ETFMitsubishi UFJ Morgan Stanley Securities, Mitsubishi UFJ Kokusai Asset Management
<Services>・TOB sub-agent, collaboration with shareholding association, investment information reports
<Customer base>・Smartphone app one-stop accounts
opening with Bank of Tokyo-Mitsubishi UFJ
<Fintech>・Fostering venture companies as a mentor in the MUFG FinTech Accelerator program and demonstrating functions.
~Recent initiatives~・Introduction of corporate currency “OOIRI”・Personal advisory service for individuals・Robo-advisory app for smartphones
<Bank agency business>・Residential loans, preferential interest rates,
and extended hours for disbursement at Bank of Tokyo-Mitsubishi UFJ
MUFG Group special zone for
demonstrating near-future technology
7
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved. 8
Unlike the competitors outsourcing their IT work to system vendors affiliated to major general securities companies, we have developed all securities systems in-house since the company’s inception.
<Advantages of in-house system development>
Independence of managementCompetitors are outsourcing their system services, which are online brokers’ core management competency, to system vendors (including Nomura Research Institute, Daiwa Institute of Research and Nikko Systems Solutions) affiliated to major general securities companies offering person-to-person transactions.
Competitive cost structureCosts of Japanese securities system vendors are expensive and variable due to oligopoly of the providers affiliated to major general securities companies. We have developed open systems dedicated to the online brokerage business since the company’s inception, achieving high management efficiency with low and fixed costs.
Deployment of flexible and unique servicesCompetitors are outsourcing to shared systems, thus subject to constraint in providing unique services. Our systems that have been developed and being operated completely in-house enable us to deploy unique and differentiated competitive services.
New business developmentWe own intellectual property for our proprietary systems (we have 16 patents which is the most among the online securities companies), which enables us to develop system-based BtoBtoC business models.
7. Complete In-house Securities System Development
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved. 9
Examples of our unique and differentiated competitive services enabled by the complete in-house systems
Ranking of stocks with trade volume expected to soar (since April 2015)By searching real-time stock quotes for all listed stocks utilizing high-speed processing of big data, “kabuStation” provides a function that gives real-time notice of stocks nearing the price limits (up or down) during trading hours.
High-speed processing system “RAIDEN” (since November 2014)Introduced a new ordering system “RAIDEN,” which attained processing capability ten times faster than our existing ordering system. This is by far the fastest processing capability in the industry and is contributing to the soaring market share of our equity margin trading service.
Various types of automatic buying and selling (since 2000)We started to offer stop order on menu in 2000 as a pioneer in the industry. We can handle the most variety of orders among peers, including trailing stop, relay order and time-specified order.
Settlement through automatic bank debit (since 2000)Our industry’s only direct linkage to the Japan Bankers Association system has made possible since the company’s inception share transaction settlement through automatic bank debit from customers’ bank accounts. We still remain the only player in the industry offering this service.
8. “Only One” Service Provided Through Our Systems
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
9. Establishing new revenue bases ~BtoBtoC strategy~
kabu.com provides “kabu.com API” environment that is compliant with stocks, futures, and options, as an open innovation platform to third-party tool developers and investment advisory service providers.
API
0
50
100
150
200
250
0.0%
3.0%
6.0%
9.0% 当社API株式等約定⾦額/⽇(億円)(右軸)当社API先物約定⾦額/⽇(億円)(右軸)当社株式等約定⾦額API⽐率(左軸)当社先物約定⾦額API⽐率(左軸)
• Equity API trading value up 8% quarter-on-quarter.
• API proportion of futures trading value declined for the first time in three quarters.
Investment firmsInvestment management business
Software provisionSoft house
Investment advice agency business
Tool Provision
App server
Securities exchangeC
ustomers
Transactionreport
kabu.com Securities
Kabu.com Equity API trading value/day(bn. yen: right scale)
25
20
15
10
5
Kabu.com API proportion of futures trading value (left scale)
Kabu.com API proportion of Equity trading value (left scale)
Kabu.com Futures API trading value/day(bn. yen: right scale)
10
8.3%
11.7
2.1
2.2%
WEB server
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
Begun offering financial instruments intermediation services in July 2005, utilizing our proprietary technological expertise and characteristics of online securities. Fully automated intermediation services provided to Bank of Tokyo-Mitsubishi UFJ and Jibun Bank. Bank customers can open their securities accounts within the same day at the earliest and start trading, without human intervention.
10. Establishing new revenue bases ~BtoBtoC strategy~
0
10
20
30
40
50
60
70
0.0%
3.0%
6.0%
9.0%当社仲介株式約定⾦額/⽇(億円)(右軸)当社株式約定⾦額仲介⽐率(左軸)当社株式委託⼿数料仲介⽐率(左軸)
• Intermediary trading value and intermediary proportion of trading value both increased.
• While the intermediary proportion of brokerage commissions declined to 6.5%, it maintained a high level from the previous quarter.
Online financial instruments intermediation services
Kabu.com intermediary trading value/day(bn. yen: right scale)
Kabu.com intermediary proportion of brokerage commissions(left scale)
Kabu.com intermediary proportion of trading value(left scale)
11
6.5%
3.7%
7
6
5
4
3
2
1
3.6
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
ASP
11. Establishing new revenue bases ~BtoBtoC strategy~
Offering system infrastructure as an ASP (Application Service Provider: software service provider) utilizing our strength in system infrastructure developed and operated in-house.
■ASP (Application Service Provider) clients:Jibun bank
0
100
200
300
400
0.0%
3.0%
6.0%
9.0%
12.0%
15.0%
ASP提供先店頭FX約定⾦額/⽇(億円)(右軸)
ASP提供先店頭FX約定⾦額⽐率(左軸)※
• The proportion of ASP increased for the first time in three quarters, and was above 10% for the fifth consecutive quarter.
Kabu.com ASP OTC-FX trading value/day (bn. yen: right scale)
40
30
20
10
The proportion of Kabu.com ASP OTC-FX trading value (left scale)
12
23.9
12.0%
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
12. Establishing new revenue bases ~BtoBtoC strategy~
■progress on software development contracting agreement with Mitsubishi UFJ Morgan Stanley Securities
Establishing a new business model of providing system infrastructure to MUFG Group and other financial institutions.
Provision of system infrastructure
�Agreement amount: approx. 2.9 billion yen�Timing of report: scheduled to be reported once the respective receipt and inspection have been completed (scheduled for Q4 FY2016 and 1H FY2017)�Account item: scheduled to be reported as “other net sales” and “cost of sales”�Monthly disclosure: scheduled to be disclosed as a component of net operating revenue in the monthly business results for the month following the month of receipt and inspection
�Permission of use of our software in equity transactions・Contracting of software development required for using our software
Agreement content
Impact on financial results
・Investment information services, smartphone services, some of the trading infrastructure--> Released on January 10, 2017
�Internet equity trading, main automatic buying and selling--> Scheduled for release in Q4 FY2016
�Additional automatic buying and selling--> Scheduled for release in 1H FY2017
Release timing
�Maintenance for software provided�Additional development and support for system changeFuture plans
g yStatus of progress on software development contracting agreement with
Mitsubishi UFJ Morgan Stanley Securities
Provision of system infrastructure
financial institutionsOur system infrastructure
Agreement amount: approx. 2.9 billion yen
13
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
13. Management Objectives 〜ROE and shareholder return〜
Basic Approach to Management ObjectivesPosition the policies “to increase return on equity” and “proactive shareholder return” as the foundation for maximizing corporate value.
ROE (return on equity) objectives and shareholder return• Our measure of profitability is ROE. We have set a target ROE of 20%. ROE for Q1-3 2016 was 14% (annual
basis).• Our shareholder return is focused on “Total Return Ratio,” and we target an average of 100% for the three
fiscal years starting FY2015.• With a minimum of “50% payout ratio and 4% DOE” for annual dividend payment, we will buy back shares
flexibly.• Plan for a year-end dividend of 6 yen, the same as the interim dividend.• Plan for a share buyback between February 9 and April 21 with an upper limit of 5.00 million shares / 2.0billion
yen, amounting to 1.48% of outstanding shares (excluding treasury stock).
Net income ROE
Dividend per share Total amount of dividend
Payout ratio DOE Buy back
Total amount of
return
Total Return Ratio(Interim) (Year-end) (Total)
FY2011 ¥1.5 bil. 4.9% - ¥4.0 ¥4.0 ¥1.4 bil. 89% 4.3% - ¥1.4 bil. 89%FY2012 ¥0.5 bil. 6.7% - ¥4.0 ¥4.0 ¥1.4 bil. 62% 4.1% - ¥1.4 bil. 62%FY2013 ¥6.6 bil. 17.0% - ¥9.0 ¥9.0 ¥3.1 bil. 48% 8.1% - ¥3.1 bil. 48%FY2014 ¥7.6 bil. 17.2% - ¥11.5 ¥11.5 ¥4.0 bil. 52% 9.1% ¥0.8 bil. ¥4.8 bil. 64%FY2015 ¥8.0 bil. 17.7% ¥6.0 ¥6.0 ¥12.0 ¥4.0 bil. 51% 9.1% ¥3.8 bil. ¥7.9 bil. 100%FY2016 - - ¥6.0 ¥6.0(Plan) ¥12.0(Plan) - - - - - -
Actual shareholder return
Note: Retroactive adjustment has been made with respect to the two-for-one stock split conducted in July 2015.
14
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
General Meeting of Shareholders
Outside directors(3 members)
(Chairperson, 2 independent directors)
Inside directors(4 members)
(CEO and 3 other member)
Nominating Committee(3 members)
(2 outside directors)
Compensation Committee(3 members)
(2 outside directors)
Appointment and dismissal of directors
Representative executive officers executive officers
Business execution
Divisions responsible for business execution
Executive Committee
Basic management policies and appointment/dismissal of executive officers
Decisions on important matters related to business execution
<Characteristics of our corporate governance>
We transitioned to a company with nominating committee, etc to completely separate the “management oversight function” by the Board of Directors and the committees, from the “business execution function” by representative executive officers and other executive officers.
Chairperson of the Board of Directors, as an outside director, is independent of business execution.
The Internal Audit Office is independent of the divisions responsible, and carries out audit activities assisting the Audit Committee.
Compensation for directors are solely composed of fixed remuneration. Compensation for representative executive officers and other executive officers are composed of fixed remuneration and variable remuneration based on performance indicators such as ROE.
Decision on proposals for appointment/dismissal of directors and executive officers
Decision on the compensation for individual directors and executive officers
Audit Committee (4 members)(3 outside directors)
Internal Audit Office
14. Corporate Governance System
15
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
• Despite the lowered ratio of individual shareholders due to the rise in our share price, the number of shareholders increased due to the stock split.
Trends in Shareholding Ratios and Share Price of kabu.com
10.2%
17.8%
338yen
100円
300円
500円
700円
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Ratio of non‐Japanese shareholders (left scale) Ratio of individual shareholders (left scale) Our share price*including adjustments (right scale)
15. Shareholder Composition
yen
yen
yen
yen
16
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
2. Online Brokerage Industry
1. Company Profile
3. Overview of Our Business Condition
17
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
0
20
40
60
2012 2013 2014 2015 2016Q2
その他 現預⾦ 投資信託 株式
0
500
1000
1500
2012 2013 2014 2015 2016Q2
その他 現預⾦ 投資信託 株式
• Majority of financial assets held by Japanese individuals are cash and deposits. (2016Q2: 52.7%)
Sources: Bank of Japan and disclosure materials of FRB
(兆円) (兆ドル)
Trends in Individual Financial Assets in Japan Trends in Individual Financial Assets in the U.S.
(trl. yen) (trl. dollars)EquityInvestment trusts
Cash and deposits
Others EquityInvestment trusts
Cash and deposits
Others
16. Individual Financial Assets in Japan and the U.S.
18
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
2.7% 15.1%
21.4%19.5%
24.7%
16.7%
30才未満30才代40才代50才代60才代70才以上
Cash trading
Margin trading
Internet Equity Trading Value by Investors’ AgeThe Number of Internet Trading Accounts and Internet Trading Value
• In line with retirements and inheritances, external environment may shift to one with active online transactions thanks to those in their 50s and 60s, which have high investment and PC literacy.
• Expectations that financial assets, currently retained at major over-the-counter securities firms, to transfer to those in their 50s and 60s, owing primarily to retirements and inheritances.
(10 thousand accounts/100 bn. yen)
(Reference) Statistics by the Japan Securities Dealers Association (from April 2016 to December 2016)
Ratio of trading conducted by investors in their 50s and 60s
44.1%
Ratio of trading conducted by investors in their 50s and 60s
35.6%
* From disclosure materials of Japan Securities Dealers Association
Under 30
30s
40s
50s
60s
70s or older
2.5% 23.4%
30.3%19.5%
16.1% 8.3%
0
1000
2000
05/9
06/3
06/9
07/3
07/9
08/3
08/9
09/3
09/9
10/3
10/9
11/3
11/9
12/3
12/9
13/3
13/9
14/3
14/9
15/3
15/9
16/3
16/9
インターネット取引⼝座数(万/左軸)
インターネット売買代⾦(千億円/左軸)
Number of internet trading accounts(10thousands/left scale)
Internet trading value(100bn.yen/left scale)
17. Status of Internet Trading
19
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
0%
5%
10%
15%
20%
25%
0
20
40
60
80
100
120
140
03/3
04/3
05/3
06/3
07/3
08/3
09/3
10/3
11/3
12/3
12/6
12/9
12/1
213
/313
/613
/913
/12
14/3
14/6
14/9
14/1
215
/315
/615
/915
/12
16/3
16/6
16/9
⽇本:個⼈株式資産(上場株式のみ):(A)ネット証券⼤⼿5社預り資産:(B)預り資産シェア:(B)÷(A)
0%
20%
40%
60%
80%
100%
0
5,000
10,000
15,000
20,000
25,000
03Q
103
Q3
04Q
104
Q3
05Q
105
Q3
06Q
106
Q3
07Q
107
Q3
08Q
108
Q3
09Q
109
Q3
10Q
110
Q3
11Q
111
Q3
12Q
112
Q3
13Q
113
Q3
14Q
114
Q3
15Q
115
Q3
16Q
116
Q3
個⼈信⽤市場(ETF/REIT含む)
個⼈現物市場(ETF/REIT含む)
ネット証券⼤⼿5社シェア
20
23.3%
• Individual investor trading value of equities was up for the first time in three quarters, and market conditions recovered.
• Top 5 online brokers struggled to grow share in both transaction flow (trading volume) and stock (assets held).
(100 mil. yen)(trl. yen)
Trends in the Shares of the Top 5 Online Brokers in Daily Individual Investor Trading Value of Equities Equity Assets of Individuals in Japan and the Shares of
Customer Assets Held by the Top 5 Online Brokers
Sources : Bank of Japan, Tokyo Stock Exchange and each online broker information.
Individual margin trading
Individual cash trading
Share of top 5 online brokers
Japanese household asset of listed stocks:(A)
Total customer assets of top 5 online brokers:(B)
Share:(B)÷(A)
11,302
74.4%
18. Individual Equity Trading (Flow/Stock)
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
0.0
5.0
10.0
15.0
05Q
105
Q3
06Q
106
Q3
07Q
107
Q3
08Q
108
Q3
09Q
109
Q3
10Q
110
Q3
11Q
111
Q3
12Q
112
Q3
13Q
113
Q3
14Q
114
Q3
15Q
115
Q3
16Q
116
Q3
カブドットコム 松井 SBI
楽天 マネックス
40
60
80
100
120
140
160
05Q
105
Q3
06Q
106
Q3
07Q
107
Q3
08Q
108
Q3
09Q
109
Q3
10Q
110
Q3
11Q
111
Q3
12Q
112
Q3
13Q
113
Q3
14Q
114
Q3
15Q
115
Q3
16Q
116
Q3
カブドットコム 松井
SBI 楽天
マネックス
21
(basis point)
3.0
Trends in Equity Brokerage Commission Rate at Major Online Brokers
Trends in Equity Trading Market Share of the Top 5 Online Brokers (*on the basis of 2005/4 figures set at 100)
Sources : Calculated by kabu.com based on the disclosure materials of the Japan Exchange Group and each online brokers
kabu.com
RAKUTEN
MATSUI
MONEX
kabu.com
MONEX
SBIMATSUI
RAKUTEN147
SBI
19. Online Brokers’ Share of Trading Volume
• kabu.com proportion of cash transactions, which reached a record low in the previous quarter, recovered sharply to 25.9%, and equity commission rate increased to 3.0bp.
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved. 22
(basis point)
• kabu.com proportion of cash trading, which reached a record low in the previous quarter, recovered sharply to 25.9%, and equity commission rate increased to 3.0bp.
0bp
2bp
4bp
6bp
8bp
10bp
12bp
14bp
16bp
18bp
20bp
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000 株式約定単価(左軸) 現物約定単価 信⽤約定単価
株式⼿数料率(右軸) 現物⼿数料率 信⽤⼿数料率
3.0bp(Dec)
FY2014 FY2015 FY2016Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Commission Rate
Equity 2.9bp 3.0bp 2.9bp 3.0bp 2.9bp 2.8bp 2.8bp 2.8bp 3.0bp 2.7bp 3.0bpCash trading (7.7bp) (7.5bp) (7.2bp) (7.3bp) (7.4bp) (7.4bp) (6.9bp) (6.9bp) (7.2bp) (7.1bp) (6.8bp)
Margintrading (1.6bp) (1.6bp) (1.5bp) (1.5bp) (1.4bp) (1.4bp) (1.5bp) (1.7bp) (1.8bp) (1.6bp) (1.7bp)
proportion of cash trading(kabu.com)
21.7% 23.6% 25.0% 25.3% 24.9% 23.3% 23.7% 21.6% 22.3% 20.4% 25.9%
A:Reduction of commission on cash equities for small amount transactions(15/11)
ʻ14/ 4 5 6 7 8 9 10 11 12 14/1 2 3 4 5 6 7 8 9 10 11 12 16/1 2 3 4 5 6 7 8 9 10 11 12
Trading value per equity transactions
Trading value per cash transactions
Commission rate on equity transactions
Commission rate on cash transactions
Trading value per margin transactions
Commission rate on margin transactions
A↓ 6.8bp(Dec)
1.7bp(Dec)
20. kabu.com’s Commission Rate
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved. 23
2. Online Brokerage Industry
1. Company Profile
3. Overview of Our Business Condition
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16Q3
Net operating revenue 19.8 19.7 19.2 14.9 13.5 12.6 10.7 11.4 21.2 20.9 22.3 13.8Ordinary income 12.6 11.0 9.9 5.9 4.9 4.4 3.0 3.9 11.7 10.2 10.7 5.3Net income 9.7 6.0 6.0 3.6 3.0 0.5 1.5 2.2 6.6 7.6 8.0 4.6Ratio of ordinary income to net operating revenue 64% 56% 52% 40% 36% 35% 29% 34% 55% 49% 48% 39%
0%
10%
20%
30%
40%
50%
60%
70%
0.0
5.0
10.0
15.0
20.0
25.0
24
• From Q1 to Q3, revenue and profit fell as a result of deteriorating market conditions. Individual investor trading value of equities was down 21%, but net operating revenue was down just 19%.
• Record-high net operating revenue and income before income taxes.(bn. yen)
(Apr-Dec)
21. Trends in Our Business Results
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
14.8
12.0
9.17.1 6.7
5.4 4.4 4.8
9.58.0 8.1
5.1
3.0
4.7
5.6
3.83.5
3.93.4 3.5
7.38.4 8.8
5.6
1.11.6
2.0
1.81.5
1.2
0.81.1
1.5 1.31.5
0.7
0.00.0
0.9
1.10.8
0.9
1.10.9
1.4 1.62.0
1.2
0.2 0.4 0.7
0.40.4
0.6
0.50.6
0.9 0.90.9
0.6
0.8 1.1 1.0
0.80.7
0.7
0.50.6
0.7 0.81.0
0.6
0.0
5.0
10.0
15.0
20.0
25.0
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16(4‐12)
Equity Financial income Future/Option FX Invest.trust Other
25
• Revenues from all products were down, mainly because of factors such as a more cautious stance among individual investors owing to uncertainties in the external environment, and lower volatility.
• Revenue enhancement of investment trust and derivatives is an issue.
Revenue by Products(bn. yen)
(Apr-Dec)
22. Revenue by Products
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
3,181 3,899 3,981 3,556 3,230 3,206 3,041 3,050
4,155 4,029 4,371 2,915
2,319
3,074 3,500 3,594 3,672 3,490 3,168 2,932
3,454 3,716 3,848
3,259
774
889 1,003
954 958 927 906 921
1,154 1,159 1,166
1,050 387
429 349
295 379 270 385 408
516 1,470
1,537
828 435
449 526
565 384 302
264 279
427
465 846
575
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16(4‐12)
Transaction related System related Employment Advertising Others
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• Transaction related cost and system related cost are the main cost elements in online brokerage business.
• Fixed costs increased as we strengthened our management foundations, with an eye to future business development.
• Total SG&A costs were roughly in line with the previous year as we controlled advertising costs and variable costs declined.
SG&A(mil. yen)
* “System related cost” is the total of “Facility cost,” ”Outsourcing cost” and “Depreciation and amortization” that is incurred from online brokerage.
(Apr-Dec)
23. SG&A Cost Structure
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
20,938
3%
4%
5%
6%
0
10,000
20,000
30,000
40,000
50,000
60,000
05Q
105
Q3
06Q
106
Q3
07Q
107
Q3
08Q
108
Q3
09Q
109
Q3
10Q
110
Q3
11Q
111
Q3
12Q
112
Q3
13Q
113
Q3
14Q
114
Q3
15Q
115
Q3
16Q
116
Q3
⼆市場信⽤買建残⾼
当社買建残⾼シェア6.1%
1,866
0
500
1,000
1,500
2,000
2,500
13Q
1
13Q
2
13Q
3
13Q
4
14Q
1
14Q
2
14Q
3
14Q
4
15Q
1
15Q
2
15Q
3
15Q
4
16Q
1
16Q
2
16Q
3
信⽤買建平残(億円)
⾦融収⽀(百万円)
27
• Although long margin positions continued to decline, kabu.com share of long positions increased to 6.1%.
• Revenues from equity lending increased thanks to the lending AI adopted in August. Financial income was 186.6 billion yen, up 5% quarter-on-quarter.
Margin Trade Balance and Financial Income Stock Exchange Margin Trade Balance and kabu.com’s Share(100 mil. yen/
mil. yen)
Source: Calculated by kabu.com based on the data of the Japan Exchange Group
Margin buy-side balance (100 mil. yen)Financial income(mil. yen)
(100 mil. yen)Entire margin buy-side balance of exchange
kabu.com share
1,269
24. Financial Income and Margin Balance
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
0
5
10
15
20
25
30
0
200
400
600
800
1,000
13Q
113
Q2
13Q
313
Q4
14Q
114
Q2
14Q
314
Q4
15Q
115
Q2
15Q
315
Q4
16Q
116
Q2
16Q
3
当社店頭FX約定⾦額/⽇(⼗億円:左軸)
当社店頭FX収益 ※ (百万円:左軸)
店頭FX市場約定⾦額/⽇(兆円:右軸)
0
5,000
10,000
15,000
20,000
25,000
0
100
200
300
400
500
600
700
800
900
1,000
13Q
1
13Q
2
13Q
3
13Q
4
14Q
1
14Q
2
14Q
3
14Q
4
15Q
1
15Q
2
15Q
3
15Q
4
16Q
1
16Q
2
16Q
3
⽇経225オプション⼿数料(左軸)
TOPIX先物等⼿数料(左軸)
⽇経225ミニ⼿数料(左軸)
⽇経225ラージ⼿数料(左軸)
先物個⼈市場/⽇(右軸)
8,195
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• An introduction of unified taxation might expand individual listed derivatives trading.• OTC-FX market trading value was up 20% owing to increased volatility in foreign exchange markets.• OTC-FX-related revenue was up 1%.
(mil. yen)(100 mil. yen)
Sources: Calculated by kabu.com based on the data of the Japan Exchange Group and The Financial Futures Association of Japan
OTC FX Market Trading Value and kabu.com Revenues
Nikkei Future Individual Trading Value and kabu.com Commission Revenues
Nikkei 225 Option commission (left scale)
TOPIX Future commission (left scale)
Nikkei 225 mini commission (left scale)
Nikkei 225 Future (regular) commission (left scale)Future individual trading value/day (right scale)
kabu.com OTC-FX trading value/day (bn. yen: left scale)kabu.com OTC-FX revenue※ (mil. yen: left scale)
Market trading value/day (trl. yen: right scale)
(trl. yen)
25. Derivatives Products (Listed Future & Option, OTC FX)
20
343
176
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
0
50
100
150
200
250
300
350
400
450
14Q1 14Q2 14Q3 14Q4 15Q1 15Q2 15Q3 15Q4 16Q1 16Q2 16Q3
Revenue related to investment trust (left scale)
Investment trust sales amount (right scale)
0
50
100
150
0
500
1,000
1,500
2,000
05/6
05/12
06/6
06/12
07/6
07/12
08/6
08/12
09/06
09/12
10/6
10/12
11/6
11/12
12/6
12/12
13/6
13/12
14/6
14/12
15/6
15/12
16/6
16/12
Total net outstandings of publicly offered investment trusts(trl. yen: right scale)kabu.com investment trust balance in custody (100 mil.yen: left scale)
29
* Total net outstandings of publicly offered investment trusts based on public materials from The Investment Trusts Association,Japan
* Investment trust balance in custody calculated as of the end of the quarter based on current market price. Excludes MRF.
* Revenue related to investment trust = Investment trust commission fees + investment trust trust income
* Investment trust sales amount includes foreign currency-denominated MMF, MMF, and mid-term national bond funds
• kabu.com investment trust balance in custody increased quarter-on-quarter to 151.6 billion yen.• Our investment trust sales amount, which had declined for four consecutive quarters, bottomed
out.
Investment Trusts Balance in Custody kabu.com’s Sales Amount and Revenue(100 mil.yen)
(mil. yen)
(mil. yen)(trl. yen)
26. Investment Trust
14,070
187
1,516
96
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
29.6%
27.8%
33.2%
8.2%
0.4%0.1% 0.1% 0.6%
300万未満300〜500万未満500〜1000万未満1000〜3000万未満3000〜5000万未満5000万〜1億未満1億以上不明
45.5%
13.5%
9.4%
8.9%
5.6%4.4%
2.8%2.5%
2.2% 1.3% 0.5% 0.4%3.1%
Employees of companies and organizations People without occupation (including full-time home traders)HousewivesSelf-employed Executives of companies and organizationsNational or municipal government employees Part-time workers or people on side jobsDoctors and other medical workersStudentsTeachersLawyers, CPAs, tax accountantsAgricultural/forestry/fishery workersOthers
35.4%
17.1%19.4%
18.6%
5.3%
2.6% 1.1%0.6%
300万未満
300〜500万未満
500〜1000万未満
1000〜3000万未満
3000〜5000万未満
5000万〜1億未満
1億以上
不明
4%
19%
31%21%
16%
7%
3%
20代30代40代50代60代70代その他合計
77%
23%
男性⼥性
as of January 2017
Gender Age
Annual income
Occupation
Financial assets
MaleFemale
20s
30s
40s
50s
60s
70s
Others
Employees of companies and organizations People without occupation (including full-time home traders)HousewivesSelf-employed Executives of companies and organizationsNational or municipal government employees Part-time workers or people on side jobsDoctors and other medical workersStudentsTeachersLawyers, CPAs, tax accountantsAgricultural/forestry/fishery workersOthers
Less than 3 mil. yen
3-5 mil. yen
5-10 mil. yen
10-30 mil. yen
30-50 mil. yen
50-100 mil. yen
More than 100 mil. yen
Unknown
• Attributes of our customers are as follows.
Less than 3 mil. yen
3-5 mil. yen
5-10 mil. yen
10-30 mil. yen
30-50 mil. yen
50-100 mil. yen
More than 100 mil. yen
Unknown
25. Attributes of Our Customers
30
©2001-2017 kabu.com Securities Co., Ltd. All rights reserved.
The investor relations information on this material is provided for the purpose of disclosing information on kabu.com Securities Co., Ltd. It is not intended as a means of promoting investment. Therefore, it is advised that users should not rely solely on the information provided on this material when making investment decisions, but rather should use your own judgment in making such decisions. Although close attention has been paid to the contents of this material, kabu.com Securities does not guarantee or ensure the accuracy or completeness. Users should be also aware that the contents of this material are subject to revision, update and deletion without prior notice. kabu.com Securities disclaims any obligation to give notice, publicly or otherwise, of any changes. Please be advised that kabu.com Securities assumes no responsibility for omissions, inaccuracies or other errors.
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