AIZAWA SECURITIES GROUP CO., LTD.

Consolidated Financial Summary under Japanese GAAPFor the Six months ended September 30, 2023
October 27, 2023
Company Name
Listed Stock Exchange
Securities Code
URL
Representative
Contact Person

AIZAWA SECURITIES GROUP CO., LTD.
Tokyo Stock Exchange Prime Market
8708
https://www.aizawa-group.jp/
Takuya Aizawa, President & CEO
Atsushi Ohishi, Director & CCO

Scheduled date of filing quarterly report
Scheduled date of dividend payment
Supporting explanatory documents on financial results
Briefing on financial results

November 10, 2023
December 1, 2023
YES
NO
(All figures are rounded off to the nearest million yen)

1. Consolidated financial summary (From April 1, 2023 to September 30, 2023)(1) Consolidated business results(% represents year-on-year change)

OperatingrevenueSix months ended September 30, 2023
Six months ended September 30, 2022

Net operating
revenuemillion yen

％

9,277
5,945

56.0
△26.7

Note: Comprehensive income

Operatingprofit (loss)

Profit (loss)
attributable toowners of parent

Ordinary
profit (loss)％

million yen％

million yen％

million yen

％

8,990
61.2
5,576 △30.7

714△1,902――

1,050△1,600―924― △1,455――

million yen

Six months ended September 30, 2023: 3,423 million yen (－% vs previous year same period)
Six months ended September 30, 2022: △1,294 million yen (－% vs previous year same period)

Earnings per share

Diluted earnings per share

yen

yen

Six months ended September 30, 2023

24.58

―

Six months ended September 30, 2022

△37.80―Note: We have introduced ESOP, and average number of company’s share bought under this program for the period under review are being accounted
under company’s own treasury shares.

(2) Consolidated financial position
Total assets

As of September 30, 2023
Fiscal year ended March 31, 2023
Note: Shareholders' equity
As of September 30, 2023: 53,605 million yen

Net assets

Shareholders'equity ratio

Net assets
per share

million yen

million yen％

yen

114,290
98,83556,52454,03046.9
51.6

1,425.50
1,350.08

As of March 31, 2023: 50,997 million yen

AIZAWA SECURITIES GROUP CO., LTD.

2．Dividends
Dividend per share
End of 1Q

Fiscal year ended 2023
Fiscal year ending 2024

End of 2Q

yen
―
―

yen
13.00
13.00

Fiscal year ending 2024 (Forecast)End of 3Q

End of 4Q

Annual Total

yen
―

yen
13.00

yen
26.00

―

―

―

3. Earning forecast for the fiscal year ending March 31, 2024 (Consolidated)
The Group operates principally in the financial securities business, and its operating results are likely to be affectedby economic and market fluctuations. Due to such nature of its business and consequential difficulty in predicting its
performance, the group does not disclose the forecast of operating results. Such forecasts may mislead the investors.
Instead of it, as we finalize the financial results, we release the preliminary numbers for the quarterly and yearly
results.
※Notes(1) Important changes in subsidiaries during the term
(Changes pursuant to the subsidiaries that lead to a change in the scope of consolidation)
New: 1 (Company name: Japan Securities Co., Ltd.)
Exclusion: None
(2) Accounting treatments specific to quarterly financial statements

YES

NO

(3) Changes in accounting policies, changes in accounting estimates and retrospective restatements
NO1) Changes in accounting policies based on revisions of accounting standard
NO2) Changes in accounting policies other than item 1) above
NO3) Change in accounting estimatesNO4) Retrospective restatements(4) Number of issued shares (Common stock)1) Number of shares issued at the end of the term including treasury shares
As of September 30, 2023: 47,525,649 shares
As of March 31, 2023: 47,525,649 shares
2) Number of treasury shares at the end of the term
As of September 30, 2023: 9,921,134 shares
As of March 31, 2023: 9,751,971 shares
3) Average number of shares outstanding (Cumulative)
As of September 30, 2023: 37,626,956 shares
As of September 30, 2022: 38,495,058 shares※ This quarterly financial summary is not subject to quarterly review procedures by certified public accountants
or audit corporations.
※ Explanation on forecasts
The group operates principally in the financial securities business, and its operating results are likely to be affectedby market fluctuations. Due to such nature of its business and difficulty in predicting its performance, group does
not forecast on business results and dividends. At the end of the term, we make efforts to release the preliminary
numbers, as we finalize the financial results.

AIZAWA SECURITIES GROUP CO., LTD.

Supporting Materials: Table of contents
1. Qualitative information for the Six months ended September 30, 2023
(1) Explanation of management results ····················································································· 1(2) Explanation of the financial results ····················································································· 3(3) Explanation on the forecast of consolidated business results ······················································· 3
2.

Financial statements and major notes(1) Consolidated balance sheets ······························································································ 4(2) Consolidated statements of income and comprehensive income statement ········································ 6(3) Notes on quarterly consolidated financial statements ································································· 8(Notes on going concern assumption) ··················································································· 8(Notes on material changes in shareholders' equity) ·································································· 8(Additional information) ·································································································· 8(Important subsequent events) ··························································································· 83.

Supplementary information
Consolidated business results for the Six months ended September 30, 2023
(1) Commission received ······································································································ 9(2) Net trading income ········································································································· 9(3) Comparative quarterly consolidated income statement ····························································· 10

AIZAWA SECURITIES GROUP CO., LTD.

1. Qualitative information for the Six months ended September 30, 2023
(1) Explanation of management results

For the period under review (April 1, 2023 to September 30, 2023), the global stock market was volatileand investors faced future uncertainty despite being getting used to situations like COVID-19, prolonged
Russia-Ukraine war, rising inflation, and interest rate hikes. However, weakening of yen helped Japanesestocks to outperform against the global stocks.
In Japan, since early spring stock market saw a sharp rise, but was unable to pursue further upside due toworries about high price warnings. Second quarter, a summer season in Japan is considered to be a worry
factor due to less market participants. Other worries like higher interest rates in U.S also prolonged inreporting period. Despite these worries, Japanese stock markets was supported by buyers at any sell offs.
This was led by expectations on multinational companies to improve their profits due to the historicallyweak yen; requests made by Japan Exchange Group to do management in measures with cost of capital andshare prices; and net buying by foreign investors. In the second quarter, Nikkei 225 average index dropped
by 4.01%, whereas broad index TOPIX rose by 1.52% led by buying in value stocks.
U.S. stock market started off on a strong note with the rising hopes for a soft landing led by lowering
inflation rate and a strong labor market. However, due to multiple factors of concern the situation changed
from August to September and the stock markets declined. These factors include prolonged higher interest
rates, the possibility of a real estate recession, rising oil prices, strikes by major automakers, and agovernment shutdown due to the U.S. debt ceiling issue.
In Asian stock markets, the economic slowdown in China and currency depreciation pressure due to interest
rate hikes in the U.S weighed on the market, while monetary easing in Vietnam favored its market. As aresult, the developments varied depending on the country. In China, the economic slowdown has been
noticeable since June and the economic rebound from last year's lockdown in Shanghai wore off, as sluggish
real estate sales had a negative impact on fixed asset investors and individual consumption, and exports
continued to decline. At the end of September, the Shanghai Composite Index maintained its downward
trend while Hong Kong’s Hang Seng Index reached a new year-to-date low. In Southeast Asia, meanwhile,
Vietnam's real GDP growth rate accelerated for two straight quarters because of ongoing interest rate cuts,
and for the reporting period Vietnam's VN index rose by roughly 8.4%. In Thailand and the Philippines, theThailand SET Index and the PSE Composite Index remained weak due to currency depreciation and renewed
concerns about inflation.
Under these circumstances, our group is working to establish an asset building business based on ourmanagement philosophy of ''providing more people with a richer life through securities investment.'' The
mission of the medium-term management plan "Define Next 100 - More for our customers", which is in its
second term, is to relive people in the asset-building class from the financial worries. The group willcontinue to support asset-building of clients by approaching clients who are in the asset-building segment
through collaboration with financial institutions and expansion of platform business through IFA business.
In July 2023, AIZAWA SECURITIES CO., LTD., group’s subsidiary company signed an alliance agreementwith Gotemba Nishi High School. Both will collaborate on regional redevelopment and SDGs. Additionally,in September the company signed an alliance agreement with Oyama Town in Shizuoka prefecture, forregional revitalization. This is the third collaboration with such regional governments.
As a measure to establish asset building business, the company is expanding its investment products suchas investment trusts and wrap products. In August 2023, the company started the handling of “Smile Goal”,
a wrap product with client's goal base approach. By recommending asset management plans based on eachclient's future goals and offering ongoing post-sale follow-up, this product aids in the realization of longterm life plans.

1

AIZAWA SECURITIES GROUP CO., LTD.

In September 2023, the company merged “Shizuoka branch” and “Shimada branch” and opened a “[New]Shizuoka branch”. The company believes that moving the branch location near to Shizuoka station, a
regional hub, will improve convenience for our clients and increase points of contact with clients interested
in asset-building.
The buyback of treasury shares started in February 2023 (total number of shares acquired: 400,000 shares)
was completed on June 19, 2023. New buyback of treasury shares started from September 2023 (number ofbuyback shares: Maximum of 400,000 shares, value of buyback shares: Maximum of 500 million yen,buyback period: September 19, 2023 to January 31, 2024).
The group will continue to strive to become a financial group by leveraging the strengths of each subsidiaryand working collectively with each other.
For the Six months ended September 30, 2023, break-down of business results are as follow;(Percentage indicates a year-on-year change. The same shall apply hereinafter in this section)（Commission received）
Total commissions received increased by 54.0% to 6,393 million yen, due to an increase in the turnover of stocks.
（Net trading income）
Net trading income increased by 69.7% to 2,216 million yen, due to increase in handling of OTC foreign stocks.
（Net financial income）
Net financial income increased by 51.7% to 266 million yen. Under this category, income increased by 46.8% to
309 million yen and expenses increased by 21.8% to 42 million yen.
（Other operating revenue and expenses）
Other operating revenues increased by 29.8% to 358 million yen, due to increase in the rental income from realestate. Other operating expenses declined by 26.9% to 244 million yen, due to decline in the cost of operational
investment securities.
（Selling, general and administrative expenses）
Selling, general and administrative expenses increased by 10.7% to 8,276 million yen due to increase in trading
related expenses and personnel expenses.
（Non-operating profit and losses）
Non-operating profit increased by 11.3% to 336 million yen. Under this category, income were 363 million yen
including the dividend income of 236 million yen. While expenses under this category were 26 million yen
including the interest expenses of 19 million yen.
（Extraordinary profit and losses）
Total extraordinary profit was 338 million yen. Under this category, income were 354 million yen due to gainfrom sale of investment securities. While losses were 16 million yen due to impairment loss of 14 million yen.
With above factors, for the reporting period, operating revenue increased by 56.0% to 9,277 million yen;operating profit was 714 million yen; ordinary profit was 1,050 million yen; and profit attributable to owners ofparent was 924 million yen.

2

AIZAWA SECURITIES GROUP CO., LTD.

(2) Explanation of the financial results(All comparisons in this section (2) are with the previous fiscal year ended March 2023)(Assets)
As of at the end of the period under review, total assets was 114,290 million yen, an increase of 15,455 million
yen. This was mainly due to; increase of 5,339 million yen in cash & deposits; increase of 4,356 million yen in
cash segregated as deposits; increase of 1,089 million yen in operational investment securities; increase of 1,340
million yen in margin transaction assets; increase of 1,586 million yen in investment securities.
(Liabilities)
As of at the end of the period under review, total liabilities was 57,765 million yen, an increase of 12,961 million
yen. This was mainly due to increase of 10,658 million yen in deposits received and; increase of 685 million
yen in guarantee deposits received.
(Net assets)
As of at the end of the period under review, total net assets was 56,524 million yen, an increase of 2,494
million yen. This was mainly due to increase of 1,655 million yen in the valuation difference on available-forsale securities and increase of 582 million yen in foreign currency translation reserve.

(3) Explanation on the forecast of consolidated business results

The group operates principally in the financial securities and investments business. In this industry, there exist
uncertainties due to, but not limited, economic and market conditions. Group tries to monitor and calculate
such market risks and its effects on the business results. Due to such nature of its business and consequential
difficulty in predicting its performance, the group does not disclose the forecast of business results. Instead ofit, as we finalize the financial results, we release the preliminary numbers for the quarterly and yearly results.

3

AIZAWA SECURITIES GROUP CO., LTD.

2. Financial statements and major notes(1) Consolidated balance sheets(million yen)

As ofMarch 31,
2023

As of
September
30, 2023

14,142
20,90820,9080
10,521
207
207
615
15,692
15,314
378
56
54
2
1,389
63,533

19,481
25,26525,2640
11,610
355
355
1,201
17,032
16,687
345
107
86
20
1,713
76,768

9,936
100
69
31
25,25323,4391,075
742△335,291

9,962
48
21
27
27,50325,026
1,114
1,374
△11
37,5150
9
1098,8350
6
7
114,290

AssetsCurrent assets
Cash and deposit
Cash segregated as deposits
Cash segregated as deposits for customers
Other deposits
Operational investment securities
Trading products
Trading securities and otherTrade date accrual
Margin transaction assets
Loans on margin transactions
Cash collateral pledged for securities borrowing on margin transactions
Advances paid
Advances paid to customers
Other advance payments
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Goodwill
OthersInvestments and other assets
Investment securities
Net defined benefit asset
OthersAllowance for doubtful accounts
Total non-current assets
Deferred assets
Deferred organization expenses
Business commencement expenses
Total deferred assets
Total assets

4

AIZAWA SECURITIES GROUP CO., LTD.

(million yen)

Liabilities
Current liabilities
Trading products
Trading securities and otherMargin transaction liabilities
Borrowings on margin transactions
Cash received for securities lending on margin transactions
Loans payable secured by securities
Cash received on debt credit transaction of securities
Deposits received
Deposits from customers
Other deposits
Guarantee deposits received
Short-term loans payable
Income taxes payable
Provision for bonuses
Provision for director bonuses
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term borrowings
Deferred tax liabilities
Provision for share based remuneration
Other non-current liabilities
Total non-current liabilities
Reserves under special laws
Reserve for financial instruments transaction liabilities
Total reserves under special laws
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation reserve
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

5

As of
March 31,
2023

As of
September
30, 2023

90
90
1,516
726
790
2,927
2,927
16,76014,359
2,400
5,099
6,445
145
311
―
1,069
34,365

139
139
1,779
1,032
747
2,680
2,680
27,41917,682
9,737
5,586
6,445
590
702
26
1,492
46,863

5,588
4,318
279
105
10,293

5,349
5,003
295
104
10,753146
146
44,804148
148
57,7658,000
8,186
33,447△5,471
44,1628,000
8,207
33,934△5,62944,512

6,579
329
△74
6,834
3,033
54,03098,835

8,235
911
△54
9,092
2,919
56,524
114,290

AIZAWA SECURITIES GROUP CO., LTD.

(2) Consolidated statements of income and comprehensive income statement
Consolidated statements of income (For the Six months ended September 30, 2023)(million yen)

Operating revenue
Commission received
Net trading income
Financial revenue
OthersTotal operating revenue
Financial expenses
Other operating expenses
Net operating revenue
Selling, general and administrative expenses
Trading related expenses
Personnel expenses
Real estate expenses
Office expenses
Depreciation
Taxes and dues
OthersTotal selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest income
Dividend income
Profit distributions
OthersTotal non-operating income
Non-operating expenses
Interest expense
Amortization of deferred assets
Loss on investments in partnership
Cancellation penalty
Settlement expenses
Commission for purchase of treasury shares
OthersTotal non-operating expenses
Ordinary profit (loss)
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Reversal of reserve for financial instruments transaction liabilities

Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on sales of investment securities
Loss on valuation of investment securities
Impairment loss
Provision of reserve for financial instruments transaction liabilities

Total extraordinary losses
Profit (loss) before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Profit (loss)
Profit (loss) attributable to non-controlling owners
Profit (loss) attributable to owners of parent
6

Six months ended
September 30, 2022

Six months ended
September 30, 2023

4,152
1,306
210
276
5,945
34
334
5,576

6,393
2,216
309
358
9,277
42
244
8,990

1,225
3,888
765
1,014
182
160
242
7,478
△1,902

1,570
4,413
695
1,140
98
109
247
8,276
714

19
258
23
26
327

73
236
18
34
363

10
3
0
0
10
0
0
25
△1,600

19
3
―
0
1
0
1
26
1,050

0
585
0
585

0
354
―
354

1
15
280
4
―
302
△1,31761
96
157△1,475△20△1,455

―
0
―
14
2
16
1,389
543
△37
506
882
△41
924

AIZAWA SECURITIES GROUP CO., LTD.

Consolidated comprehensive income statement (For the Six months ended September 30, 2023)(million yen)

Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation reserve

Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Comprehensive income(Description)
Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling owners

7

Six months ended
September 30, 2022

Six months ended
September 30, 2023

△1,475

882

△532
711
1
181
△1,294

1,655
864
19
2,540
3,423

△1,692
398

3,182
240

AIZAWA SECURITIES GROUP CO., LTD.

(3) Notes on quarterly consolidated financial statements(Notes on going concern assumption)

Not applicable.
(Notes on material changes in shareholders’ equity)

Not applicable.
(Additional information)

Introduction of ESOPThe company has introduced an Employee Stock Ownership Plan Trust (“ESOP Trust”) from July 22, 2019with the motive to increase the enterprise value over mid to long term. The Company's stock held by the
ESOP Trust is included in treasury shares under net assets with a book value of 595 million yen for 905
thousand shares as of September 30, 2023.
(Important subsequent events)

Buyback of treasury sharesCompany decided to buyback the treasury shares in accordance with the paragraph 1 of article 459,
company law. Decision was taken in the board meeting conducted on September 15, 2023. Company
pursued the purchase of its treasury shares.
1. Minutes of board meeting on buyback of treasury shares(1) Reason for pursuing buyback of treasury shares
To maintain flexible capital policy and increase the capital efficiency and return on equity(2) Details on buyback of treasury shares
1) Share type:
Common share2) Number of buyback shares:
Maximum of 400,000 shares (Within 1.1% of outstanding shares
excluding the treasury shares)
3) Value of buyback shares:
Maximum of 500 million yen
4) Buyback period:
From September 19, 2023 to January 31, 2024
5) Mode of purchase:
Direct trade through Tokyo Stock Exchange
2. Details on completed buyback of treasury shares(1) Share type:
Common share(2) Number of buyback shares:
68,400 shares(3) Value of buyback shares:
72 million yen(4) Buyback period:
From October 1, 2023 to October 23, 2023
(5) Mode of purchase:
Direct trade through Tokyo Stock Exchange
In line with above mentioned board decision, the status of buyback of treasury shares as of October 23,
2023 is as follow:(1) Number of treasury shares buyback completed:
121,400 shares(2) Value of treasury shares buyback completed:
127 million yen

8

AIZAWA SECURITIES GROUP CO., LTD.

3. Supplementary information
Consolidated business results for the Six months ended September 30, 2023
(1) Commission receivedA) Breakdown of commission received(million yen)Six months ended
September 30,
2022
(A)

Brokerage commission
Equities
Bonds
Beneficiary securities
Commission from underwriting, secondary
distribution
andsolicitation
towards
professional investors
Equities
Bonds

2,141
2,082
―
59

Fee from offering, secondary distribution andsolicitation towards professional investors
Other fees received
Total
B)

Six months ended
September 30,
2023
(B)

Change(B/A)

Consolidated fiscal year
ended March 31, 2023

3,365 157.2%
3,316 159.3%――
48 82.6%

4,608
4,489
―
119

33

6

19.4%

40

32
1

5
0

18.1%
55.0%

38
2

779

1,248 160.1%

1,895

1,198
4,152

1,772 147.9%
6,393 154.0%

2,426
8,971

Product wise breakdown(million yen)Six months ended
September 30, 2022
(A)

Equities
Bonds
Beneficiary securities
OthersTotal(2)

Six months ended
September 30, 2023
(B)

2,136
1
1,410
604
4,152

3,372
0
1,996
1,023
6,393

Change(B/A)

157.9%
51.0%
141.5%
169.3%
154.0%

Consolidated fiscal year
ended March 31, 2023

4,567
2
3,169
1,232
8,971

Net trading income(million yen)Six months ended
September 30, 2022
(A)

Equities etc.
Bonds, forex etc.
Bonds etc.
forex etc.
Total

Six months ended
September 30, 2023
(B)

Change
(B/A)

1,867
349
111
237
2,216

208.9%
84.7%
157.7%
69.6%
169.7%

893
412
70
341
1,306

9

Consolidated fiscal year
ended March 31, 2023

1,646
671
120
550
2,318

AIZAWA SECURITIES GROUP CO., LTD.

(3)

Comparative quarterly consolidated income statement(million yen)

FY 2023

Operating revenue
Commission received
Brokerage commission
Commission from underwriting, secondary
distribution and solicitation towards
professional investors
Fee from offering, secondary distribution andsolicitation towards professional investors
Other fees received
Net trading income
Financial revenue
OthersTotal operating revenue
Financial expenses
Other operating expenses
Net operating revenue
Selling, general and administrative expenses
Trading related expenses
Personnel expenses
Real estate expenses
Office expenses
Depreciation
Taxes and dues
Provision of allowance for doubtful accounts
OthersTotal selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Non-operating expenses
Ordinary profit (loss)
Extraordinary income
Extraordinary losses
Profit (loss) before income taxes

FY 2024

Second quarter

Third quarter

Fourth quarter

First quarter

Second quarter

ended
September 30

ended
December 31

endedMarch 31

ended
June 30

ended
September 30

2,142
1,080

2,492
1,226

2,326
1,240

2,983
1,680

3,409
1,685

31

2

5

4

1

416

672

443

507

740

613
745
116
195
3,199
16
283
2,899

590
441
114
352
3,401
18
△29
3,412

637
570
137
369
3,404
26
158
3,219

790
1,267
127
209
4,588
24
41
4,522

981
948
181
149
4,688
17
203
4,467

619
1,930
414
496
107
77
―
128
3,773

625
1,884
359
539
86
87
―
133
3,716

749
1,776
353
576
93
101
―
145
3,795

△874
46
18
△846
326
18

△303
199
5
△110
156
△265
312

△576
433
58
△201
257
959

736
2,094
350
569
48
31
―
126
3,958
564

834
2,318
344
571
49
77
―
121
4,317
149

279
13
830

83
13
220

156
15
971

198
1
418

259

246

711

171

△22
734

△18
190

Income tax expenses

△539
26

63

△902
274

Profit (loss)
Profit (loss) attributable to non-controlling interests

△566
△8

249
1

△1,177△9

Profit (loss) attributable to owners of parent

△558

247

△1,16810