AIZAWA SECURITIES GROUP CO., LTD.

Consolidated Financial Summary under Japanese GAAPFor the Six months ended September 30, 2022
October 28, 2022
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
Kazuhiro Mashiba, Director & CFO

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

November 10, 2022
December 1, 2022
YES
NO
(All figures are rounded off to the nearest million)

1. Consolidated financial summary (From April 1, 2022 to September 30, 2022)(1) Consolidated business results(% represents year-on-year change)

OperatingrevenueSix months ended September 30,
2022
Six months ended September 30,
2021

Net operating
revenuemillion yen

%

5,945
8,115

△26.7
2.3

Note: Comprehensive income

OperatingprofitOrdinary
profit%million yen%

million yen

5,576 △30.7
8,043
2.1

△1,902△313――△1,600
1,033

million yen%

Six months ended September 30, 2022: △1,294 million yen
Six months ended September 30, 2021: 1,782 million yen

Earnings per share

Diluted earnings per share

yen

yen

Six months ended September 30, 2022

△37.80―Six months ended September 30, 2021

57.59

―

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, 2022

Net assets

Shareholders'equity ratio

Net assets
per share

million yen

million yen%

yen

103,791

55,66758,02951.4
53.2

1,385.32
1,440.62

Fiscal year ended March 31, 2022
104,723
Note: Shareholders' equity
As of September 30, 2022: 53,297 million yen

As of March 31, 2022: 55,712 million yen

Profit attributableto owners of parent
million yen%― △1,455
10.0
2,283

―
113.8

AIZAWA SECURITIES GROUP CO., LTD.

2．Dividends
Dividend per share
End of 1Q

Fiscal year ended 2022
Fiscal year ending 2023

End of 2Q

yen
―
―

Yen
13.00
13.00

Fiscal year ending 2023 (Forecast)End of 3Q

End of 4Q

Annual Total

yen
―

yen
15.00

yen
28.00

―

―

―

3. Earning forecast for the fiscal year ending March 31, 2023 (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: Ariake Secondary Fund Ⅲ LP
Exclusion: None
(2) Accounting treatments specific to quarterly financial statements

YES

NO

(3) Changes in accounting policies, changes in accounting estimates and retrospective restatements
YES1) 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, 2022: 47,525,649 shares
As of March 31, 2022: 47,525,649 shares
2) Number of treasury shares at the end of the term
As of September 30, 2022: 9,052,651 shares
As of March 31, 2022: 8,853,110 shares
3) Average number of shares outstanding (Cumulative)
As of September 30, 2022: 38,495,058 shares
As of September 30, 2021: 39,650,879 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 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, 2022
(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(Change in accounting policy) ··························································································· 8(Additional information) ·································································································· 8(Important subsequent events) ··························································································· 83.

Supplementary information
Consolidated business results for the Six months ended September 30, 2022
(1) Commission received ······································································································ 9(2) Net trading income ········································································································· 9(3) Comparative quarterly consolidated statements of income ························································ 10

AIZAWA SECURITIES GROUP CO., LTD.

1. Qualitative information for the Six months ended September 30, 2022
(1) Explanation of Management results

For the period under review (April 1, 2022 to September 30, 2022), volatile stock price movements
continued in both developed and emerging countries. Countries have being dealing differently with therestrictions over the prolonged COVID-19. Some countries are easing restriction with new life of “With
COVID” and few are still maintaining tight restrictions for “COVID Zero”. In addition, the decline in GBP
against major currencies in the second half of the year also led to global currency instability. Rising inflation,
benchmark interest rate hikes, and currency rate fluctuations are weighing on the global economy and stock
markets for the time being.
Japanese stock market also experienced high volatility led by events like Russia's invasion of Ukraine andspeculation of monetary policy tightening in the U.S. On August 17, the Nikkei 225 average index hit a highof 29,222.77 yen. The Japanese yen also experienced the volatility and touched at its weakest level against
the USD since 1998.
The U.S. stock market changed gears as it started tightening the monetary policies which were implemented
during and before the outbreak of COVID-19. The rise in commodity prices and demand for stable
employment accelerated the rise in labor costs. CPI for the period from March to September exceeded 8%
in all months except for March, which reflected figures of February. This is the first time since 1981 that
inflation has been above 8%. The pace and the series of benchmark interest rate hikes by FRB to counterthe rising inflation has led to the fears of a recession ahead and impacted the stock markets. In particular,
technology stocks, which are said to have benefited from the excess liquidity market caused by QE, fell
sharply, with the NASDAQ index falling 25.6% during the period, and other major indices, such as the S&P
500 and the Dow Jones Industrial Average, also falling sharply, by 20.9% and 17.2% respectively.
Asian stock markets were weak led by the economic slowdown in China; interest rate hike in the U.S. tocounter inflation; and overall pressure on currency depreciation. In China, “COVID Zero” policy to tackle
COVID-19, led to weak consumer spending, weaker real estate market conditions, power shortages, and aweakening of the yuan. Hong Kong’s Hang Seng Index hit its lowest level in September for the year, andthe Shanghai Composite Index also continued its downtrend.
In Southeast Asia, even though, economy of various countries improved as they adopted “With COVID”
policy, lot of countries increased its benchmark interest rates to counter the currencies depreciation against
the USD and rising inflation. In this context, Vietnam has been hit hard by the events like; new restrictions
on real estate loan, the depreciation of the Vietnam Dong against major currencies, and 1% benchmark
interest rate hike. VN-Index hit a new low of 1,099 points in September, the lowest level for the year.
Under such conditions, group is working with the management philosophy of "Making life better throughsecurities investment" to provide the asset building services in line with the best customer satisfaction.
In order to communicate more effectively with clients, we not only visit and make call, but also use SNS
tools such as LINE and e-mail according to the client's priorities. Group is also making efforts to provide
better work life balance for its employees by implementing the hybrid work condition through work fromhome & flexible work timing and introducing business casual wears.
Group is focusing on one of its principle of "thoroughly client-oriented", of the medium-term management
plan "Define Next 100 years – More and more for clients", implemented this fiscal year. Group is aiming
to establish an asset-building business through close communication with our clients.
In July, group’s subsidiary company “AIZAWA SECURITIES CO., LTD.” made an announcement toopen its fifth joint branch, “Ube” Branch (opening in October, 2022), with Saikyo Bank Ltd., its businessalliance partner. Through such joint branches, company is already providing clients of Yamaguchi areawith combined services such as bank deposits and stock investments. In August and September, company
reorganized its branch network to focus on major cities in order to improve the efficiency of branch
operations. As a result, the “Abeno Harukas” and “Yokohama” branches were newly opened, and the“Machida” branch was relocated and converted to a large-scale branch.

1

AIZAWA SECURITIES GROUP CO., LTD.

In addition, in order to target the new clients for asset-building business in the age of 30’s and 40’s, group
introduced a new system for KYC required in account opening. This has simplified the account opening
process and reduced the time required to open an account. Group is promoting digitalization for better
operations and reducing the burden of clients.
In the area of cooperation with financial institutions, group signed letter of intent with its business alliancepartner Saikyo Bank Ltd., with the aim of establishing a new cooperative framework in the financial
products intermediary business. Saikyo Bank Ltd. will consider transferring the rights and obligations
related to customers' securities accounts for certain registered financial institution business, such as
corporate bonds and mutual funds to securities account of “AIZAWA SECURITIES CO., LTD.”.
The Group will continue to strive to become a financial group by leveraging the strengths of eachsubsidiary and working collectively with each other.

For the Six months ended September 30, 2022, 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 declined by 21.4% to 4,152 million yen, due to decline in the turnover of stocks.
（Net trading income）
Net trading income declined by 48.3% to 1,306 million yen, due to decline in handling of OTC foreign stocks.
（Net financial income）
Net financial income increased by 0.4% to 175 million yen. Under this category, income declined by 0.2% to
210 million yen and expenses declined by 3.1% to 34 million yen.
（Other operating revenue and expenses）
Other operating revenues increased by 189.9% to 276 million yen, due to increase real estate rental income.
Other operating expenses increased by 841.0% to 334 million yen, due to increase the cost of operational
investment securities.
（Selling, general and administrative expenses）
Selling, general and administrative expenses declined by 10.5% to 7,478 million yen due to decline in office
expenses.
（Non-operating profit and losses）
Non-operating profit declined by 77.6% to 302 million yen. Under this category, income were 327 million yen
including the dividend income of 258 million yen. While expenses under this category were 25 million yen
including the interest expenses and settlement expense of 10 million yen for each.
（Extraordinary profit and losses）
Total extraordinary profit was 282 million yen. Under this category, income were 585 million yen due to thegain from sale on investment securities. While losses were 302 million yen including the 280 million yen loss
on valuation of investment securities.
With above factors, for the reporting period, operating revenue declined by 26.7% to 5,945 million yen;operating losses was 1,902 million yen; ordinary losses were 1,600 million yen; and loss attributable to ownersof parent was 1,455 million yen.

2

AIZAWA SECURITIES GROUP CO., LTD.

(2) Explanation of the financial results(All comparisons in this section (3) are with the same period of previous fiscal year)(Assets)
As of at the end of the period under review, total assets was 103,791 million yen, a decline of 931 million yen.
This was mainly due to increase of 2,114 million yen in cash and deposits; increase of 935 million yen in
operational investment securities; decline of 1,955 million yen in cash segregated as deposits; and decline of
2,451 million yen in investment securities.
(Liabilities)
As of at the end of the period under review, total liabilities was 48,124 million yen, an increase of 1,430 million
yen. This was due to increase of 1,055 million yen in margin transaction liabilities; decline of 2,557 million
yen in loan payable secured by securities and increase in deposit of 788 million yen.
(Net assets)
As for the period under review, total net assets declined by 2,362 million to 55,667 million yen. This was
mainly due to decline 2,042 million yen in retained earnings.
(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. Any forecast based on uncertain
situations can mislead the investors.
Group tries to monitor and calculate such market risks and its effects on the business results. Due to suchnature of its business and consequential difficulty in predicting its performance, the group does not disclose theforecast of business results. Instead of it, 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,
2022

As of
September
30, 2022

19,12623,41923,418
0
8,601
361
361
776
15,81015,528
281
176
174
2
1,215
69,48821,24021,464
21,463
0
9,537
438
438
582
16,082
15,945
136
60
44
15
1,465
70,872

8,160
241
182
58
26,815
24,7911,067
959△335,217

8,177
177
125
51
24,54922,339
1,113
1,100
△3
32,9041
16
17
104,7231
13
14
103,791

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 other
Derivatives trading
Margin 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,
2022

As of
September
30, 2022

117
117
0
1,791
1,115
675
4,800
4,800
20,51418,088
2,425
4,937
3,795
1,212
423
27
819
38,440

209
209
2,846
2,381
465
2,242
2,242
21,302
15,739
5,563
5,219
5,945
161
425

3,036
4,553
226
290
8,107

3,602
4,331
253
275
8,463

146
146
46,693146
146
48,1248,000
8,122
36,922△4,79048,2548,000
8,207
34,880△5,01046,077

7,391
85
△19
7,457
2,317
58,029104,723

6,859
378
△18
7,219
2,369
55,667103,791

―

―

1,160
39,515

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, 2022)(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
Provision of allowance for doubtful accounts
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 expenses
Amortization expenses of deferred asset
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 settlement of investment securities
Loss on valuation of investment securities
Impairment loss
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, 2021

Six months ended
September 30, 2022

5,283
2,525
211
95
8,115
35
35
8,043

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

1,301
4,104
895
1,310
284
180
0
280
8,357
△313

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

15
1,300
92
23
1,432

19
258
23
26
327

0
0
69
10
1
2
1
84
1,033

10
3
0
0
10
0
0
25
△1,600

1
2,022

0
585

0
2,023

0
585

―
―
1
―
―
1
3,055
789
22
811
2,244
△ 39
2,283

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

AIZAWA SECURITIES GROUP CO., LTD.

Consolidated comprehensive income statement (For the Six months ended September 30, 2022)(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, 2021

Six months ended
September 30, 2022

2,244

△1,475

△ 524
76
△ 13
△ 461
1,782

△ 532
711
1
181
△1,2941,776
5△1,692398

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(Change in accounting policy)

Application of “Accounting standard for fair value measurement”
From the beginning of the consolidated 1st quarter of current accounting period, company has applied the“Accounting standard for fair value measurement” under ASBJ statement no. 31 as of June 17, 2021.
The transitional treatment will be applied in accordance with the paragraph 27-2 of “Accounting standard
for fair value measurement”. New accounting policy will be applied in the future.
There is no impact on the quarterly consolidated financial statements due to change in accounting policy.
(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 625 million yen for 951
thousand shares as of September 30, 2022.
(Important subsequent events)

Purchase of treasury sharesCompany decided to purchase the treasury shares in accordance with the paragraph 1 of article 459,
company law. Decision was taken in the board meeting conducted on January 28, 2022. Company pursued
the purchase of its treasury shares.
1. Minutes of board meeting on purchase of treasury shares(1) Reason for pursuing purchase of treasury shares
To maintain flexible capital policy and increase the capital efficiency and return on equity(2) Details on purchase of treasury shares
1) Share type:
Common share2) Number of treasury shares:
Maximum of 1,000,000 shares (Within 2.6% of outstanding shares
excluding the treasury shares)
3) Value of treasury share:
Maximum of 1,200 million yen
4) Term for purchase:
From February 1, 2022 to January 31, 2023
5) Mode of purchase:
Direct trade through Tokyo Stock Exchange
2. Details on completed purchase of treasury shares(1) Share type:
Common share(2) Number of shares:
118,000 shares(3) Value of shares:
80 million yen(4) Buyback term:
From October 1, 2022 to October 26, 2022
(5) Mode of purchase:
Direct trade through Tokyo Stock Exchange
In line with above mentioned board decision, the status of purchase of treasury shares as of October 26,
2022 is as follow:(1) Number of treasury shares purchase completed:569,900 shares(2) Value of treasury shares purchase completed:
424 million yen

8

AIZAWA SECURITIES GROUP CO., LTD.

3. Supplementary information
Consolidated business results for the Six months ended September 30, 2022
(1) Commission receivedA) Breakdown of commission received(million yen)Six months ended
September 30,
2021
(A)

Brokerage commission
Equities
Bonds
Beneficiary securities
Commission from underwriting, secondary
distribution
andsolicitation
towards
professional investors
Equities
Bonds
Fee from offering, secondary distribution andsolicitation towards professional investors
Other fees received
Total
B)

Six months ended
September 30,
2022
(B)

Change(B/A)

Consolidated fiscal year
ended March 31, 2022

2,880
2,841
―
38

2,141
74.3%
2,082
73.3%
―
―
59 151.5%

5,571
5,471
―
99

6

33 502.7%25

5
132 592.2%
1
95.2%

24
1

916

779

85.1%

1,705

1,479
5,283

1,198
4,152

81.0%
78.6%

2,873
10,176

Product wise breakdown(million yen)Six months ended
September 30, 2021
(A)

Equities
Bonds
Beneficiary securities
OthersTotal(2)

Six months ended
September 30, 2022
(B)

2,874
1
1,428
979
5,283

2,136
1
1,410
604
4,152

Change(B/A)

74.3%
114.2%
98.8%
61.7%
78.6%

Consolidated fiscal year
ended March 31, 2022

5,556
1
2,820
1,798
10,176

Net trading income(million yen)Six months ended
September 30, 2021
(A)

Six months ended
September 30, 2022
(B)

Change(B/A)

Consolidated fiscal year
ended March 31, 2022

Equities etc.

2,158

893

41.4%

4,031

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

367
64
302
2,525

412
70
341
1,306

112.2%
109.2%
112.8%
51.7%

719
101
617
4,751

9

AIZAWA SECURITIES GROUP CO., LTD.

(3)

Comparative quarterly consolidated income statement(million yen)

FY 2022

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
Income tax expenses
Profit/loss(△)
Profit/loss(△) attributable to non-controlling interests

Profit/loss(△) attributable to owners of parent

FY 2023

Second quarter

Third quarter

Fourth quarter

First quarter

Second quarter

ended
September 30

ended
December 31

endedMarch 31

ended
June 30

ended
September 30

2,887
1,502

2,771
1,503

2,181
1,186

2,010
1,060

2,142
1,080

3

18

0

1

31

491

463

326

363

416

890
1,410
108
51
4,457
19
20
4,417

726
1,516
105
65
4,399
27
31

668
708
105
540
3,535
23
278

584
560
93
81
2,746
17
51

4,341

3,234

2,676

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

721
2,173
473
781
143
92
△0
149
4,535
△117
76
80
△122
1,934
△277
2,089
764
1,325
△9
1,334

761
2,127
347
549
88
234
△0
123
4,232

627
1,758
392
535
81
60
△0
106
3,563

605
1,958
350
517
75
82
―
114
3,705

108

△328

△1,028

205
2

420
8

281
6

128
3,773
△874
46
18

311

83

△753

△846

1,069
112

274
9

259
283

326
18

1,268

348

△778

△539

10

619
1,930
414
496
107
77
―

333

661

131

26

934

△312

△909

△566

△6

9

△12

△8

940

△322

△897

△558