SBI Leos Hifumi - New Analyst Report 12/20

An asset management company that manages and sells public offering investment trusts and other financial products under the "Hifumi" brand.
- SBI Leos Hifumi is an asset management company that operates and sells investment trusts under the "Hifumi" brand, such as "Hifumi Plus," which boasts the largest net asset value among domestic investment trusts that mainly invest in Japanese stocks.
- The entrusted investment trust business accounts for 98.6% of the 24/3 period's operating revenue as trustee fees, becoming a core business. The end-of-term asset under management balance for the interim period of the 25/3 period has reached 1 trillion 323 billion yen, of which 951.4 billion yen was sold through sales partners such as securities companies and banks.

25 fiscal year-end results for the first half of the year showed an 11% increase in revenue and 7% in operating profit.
- The fiscal year-end results for the first half of the 25/3 period showed a 10.8% increase in revenue and 7.0% in operating profit compared to the same period last year. Due to the expansion of trustee fees accompanying the increase in assets under management, although operating revenue showed significant growth, there was also an increase in advertising and publicity expenses due to new fund inflows, leading to a 0.7 percentage point decline in the operating margin to 18.8%.

The Securities Research Center's forecast for the first half of the fiscal year ending in March 25 predicts an 18% increase in operating profit.
- SBI Leos Hifumi, whose core revenue source depends heavily on the balance of managed assets, is significantly affected by domestic and foreign stock market fluctuations. Due to various uncertainties arising from economic conditions, market environments, etc., the company has not disclosed performance estimates.
- Citing the first-half results and market conditions, the Securities Research Center (hereinafter referred to as the Center) revised its forecast for the 25/3 period. They downwardly adjusted operating revenue from 12,320 million yen to 11,647 million yen (a 13.0% increase from the previous period) and operating profit from 2,405 million yen to 2,152 million yen (a 20.9% increase).

Assuming an increase in the balance of managed assets, we also expect an increase in profits after the fiscal year ending March 2026.
- Based on the performance in the first half of the fiscal year 25/3 and market conditions, our center has revised downward its performance forecast for the period after 26/3.
- With the expansion of operating revenue due to the increase in managed asset balance, we expect a 6.8% revenue increase and a 9.4% operating profit increase compared to the previous period for the fiscal year ending March 2026, and a 6.8% revenue increase and a 7.6% operating profit increase for the fiscal year ending March 2027.