FY2027-H1: Can the high growth in Q1 translate into the full-year plan?

In Q1 of the fiscal year ending March 2027, operating revenue was ¥37,411 million and operating profit was ¥4,946 million, up 56.8% and 59.2%, respectively, year on year. Ordinary income was ¥5,676 million and net income attributable to owners of the parent was ¥3,922 million, up 68.7% and 65.5%, respectively, year on year. The company said that securities lending and borrowing transactions, stock repo transactions and other businesses remained solid, supported by firm equity markets and increased funding demand resulting from higher market interest rates.

The full-year forecasts are operating profit of ¥14,400 million, ordinary income of ¥15,800 million and net income attributable to owners of the parent of ¥11,000 million. Progress as of Q1 was 34.3% for operating profit, 35.9% for ordinary income and 35.7% for net income. If half of the full-year forecast is used as a simple interim benchmark, the thresholds are operating profit of ¥7,200 million, ordinary income of ¥7,900 million and net income of ¥5,500 million. After deducting Q1 results, this means that Q2 alone would need to generate operating profit of ¥2,254 million, ordinary income of ¥2,224 million and net income of ¥1,578 million.

This assessment is a mechanical benchmark that ignores seasonality and does not establish that the full-year targets will be achieved merely because 50% is reached. It is nevertheless useful for determining whether the Q1 earnings growth continued into the interim period rather than being limited to temporary market conditions. The full-year operating revenue forecast has not been disclosed, so progress against the full-year plan cannot be calculated for operating revenue. At the next earnings announcement, it will also be necessary to check whether the company newly discloses a full-year operating revenue forecast, which is equivalent to sales for this business.

The Q1 operating margin was approximately 13.2%, a slight improvement from approximately 13.0% in the same quarter of the previous year, and above the 12.3% operating margin for FY2026. At the interim stage, it will be important to see whether the operating margin can remain in the 13% range and whether the contribution to earnings from each external factor, including market conditions, interest rates and funding demand, is disclosed. Even if the full-year forecast is maintained, the required second-half profit based on first-half results should be reviewed to ensure that it is not excessively high.