(165A) SBI Leos Hifumi - New Analyst Report 7/5

1. Company Overview
・SBI Leo Hifumi is a holding company whose core subsidiary is Leos Capital Works, an asset management company that manages and sells “Hifumi” brand investment trusts such as “Hifumi Plus,” which boasts the largest total net assets among domestic investment trusts managed mainly in Japanese stocks.
・Contractor remuneration for mutual fund outsourcing operations accounted for 98.6% of operating revenue for the 24/3 period, making it a core business. The balance of assets under management at the end of the 24/3 period reached 1 trillion368.8 billion yen, of which 982.2 billion yen was sold through sales partners such as securities companies and banks.

2. Financial analysis
・Sales increased by an average of 17.8% per year from the 18/3 period (standalone) to the 24/3 period (consolidated) due to an increase in asset balances under management, etc. Meanwhile, the average annual growth rate of ordinary income during the same period remained at 8.1% due to an increase in the balance composition ratio of public investment trusts sold through sales partners and deterioration in operating income payment fee rates, etc.
・It is attractive compared to similar companies in terms of growth potential and profitability.

3. Non-financial analysis
・The source of intellectual capital lies in management power and brand power (ability to create fans for the company's mutual funds).

4. Analysis of management strategies
・SBI Leo Hifumi has set “learning about money, finding it with Hifumi, and supporting it with mutual assistance” as a medium- to long-term management strategy (initiative).

5. Analyst Assessment
・The Securities Research Center (hereafter, the Center) predicted 19.5% increase in sales and 35.1% operating profit from the previous fiscal year based on the results for the 24/3 fiscal year, the status of mutual fund outflows from April to May, and the company's policies, etc. for the 25/3 fiscal year.
・Our center anticipates double-digit sales and profit increases in the 26/3 and 27/3 periods, assuming the introduction, etc. of crossover funds planned by SBI Leo Hifumi, which are invested from the unlisted stage and continue to be held even after listing.