FYE03/2003 1H Financial Results · FYE 03/2001 1Q 2Q 3Q 4Q FYE 03/2002 1Q 2Q 3Q 4Q FYE 03/2003 1Q...
Transcript of FYE03/2003 1H Financial Results · FYE 03/2001 1Q 2Q 3Q 4Q FYE 03/2002 1Q 2Q 3Q 4Q FYE 03/2003 1Q...
FYE03/2003FYE03/2003 1H1H Financial Results Financial Results October 17, 2002
Forward-looking Statements
Statements made at this presentation and in this material include forward-looking statements that are based on our current expectations, assumptions, estimates and projections about our business and the industry. These forward-looking statements are subject to various risks and uncertainties. These statements discuss future expectations and plans, identify strategies, contain projections of results of operations and of our financial condition, and state other “forward-looking” information. Known and unknown risks, uncertainties and other factors could cause the actual results to differ materially from expected results contained in any forward-looking statements. Potential risks and uncertainties include, without limitation, our ability to continue to attract and retain customers and their assets; our ability to make our operations profitable; changes in the demand for brokerage services in Japan; our ability to continue to expand and maintain our computers and electronic systems and to avoid failures of these systems; and our ability to maintain our relationship with our founding shareholders. This does not correspond to US GAAP.
1
ⅠⅠⅠⅠ. Financial Results
ⅡⅡⅡⅡ. Other Business
ⅢⅢⅢⅢ. Newly introduced Services and our Business Model
2
FYE FYE FYE FYE 03/2003 1H Financial Summary1H Financial Summary1H Financial Summary1H Financial Summary
-859468Net loss
-828416Ordinary loss
-833449Operating loss
6.0%2,2852,156Operating expense
-14.9%-15.1%
1,4521,425
1,7071,679
Operating Revenue(Commission Revenue)
changeFYE 03/20031H (Apr-Seo)
FYE 03/20021H (Apr-Seo)
((((unit::::Yen million))))
-12.6%2,8033,209Lease O/S (over ¥3mil)
-16.0%6,9998,333Cash & equiv. (incl. CP)
-742.0%860.5%Capital adequacy ratio
-8.2%9,47610,323Shareholders’ equity
-10.5%11,74113,124Total assets
changeFYE 03/2003 1HSeptember 2002
FYE 03/2002March 2002
3
FYE FYE FYE FYE 03/2003 2Q Financial Summary (2)2Q Financial Summary (2)2Q Financial Summary (2)2Q Financial Summary (2)
((((unit:::: Yen million))))Quarter to quarter
349
334
337
1,148
811793
FYE 03/20031Q(Apr-Jun)
-509Net loss
-493Ordinary loss
-495Operating loss
-1.0%1,136Operating expense
-21.0%-20.5%
641631
Operating Revenue(Commission Revenue)
ChangeFYE 03/20032Q(Jul-Sep)
3,019
8,207
790.9%
9,976
12,979
FYE 03/2003 1QJune 2002
-7.1%2,803Lease O/S (over ¥3mil)
-14.7%6,999Cash & equiv. (incl. CP)
-742.0%Capital adequacy ratio
-5.0%9,476Shareholders’ equity
-9.5%11,741Total assets
changeFYE 03/2003 2QSeptember 2002
4
LeaseLeaseLeaseLease OutstandingOutstandingOutstandingOutstanding
•The leased assets are regularly reviewed and written off if necessary; such effects are not included in the data above.
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Mar/00
Sep/00
Mar/01
Sep/01
Mar/02
Sep/02
Mar/03
Sep/03
Mar/04
Sep/04
Mar/05
Sep/05
Mar/06
Sep/06
Mar/07
Margin Trading/Stock Lending related initialinvestment(estimate)Existing Lease Outstanding
(¥¥¥¥ Million)
The graph is based on existing leaseand future capex related to businessdevelopment and replacement arenot included.
5
Operating RevenueOperating RevenueOperating RevenueOperating Revenue vs.vs.vs.vs. SGASGASGASGA
(Yen million))))
647
850748 752
942
764 779 794 811641
8481,015
923 891974
1,182 1,2171,142 1,148 1,136
FYE 03/20011Q
2Q 3Q 4QFYE 03/2002
1Q
2Q 3Q 4Q FYE 03/20031Q
2Q
OperatingRevenue
SGA
Operating Revenue Breakdown100%====641(Yen million))))
551
4825 16
Brokerage Investment Trusts Underwriting Others
SGA Breakdown100%====1,136((((Yen million))))
307125
116
53
36
10
610
19141
310
Outsourcing expensesEquipment lease & maintenanceInformationEmployees salariesCommunication and freightCommission PaidExchange and association feesAdvertisingAmortization of goodwillDirectors compensationOthers
6
BreakBreakBreakBreak----Even Analysis Even Analysis Even Analysis Even Analysis –––– SpreadsheetSpreadsheetSpreadsheetSpreadsheet1. Divide major items of SG & A into 2 categories (1) Variable (trade volume or number of accounts base) and (2) Fixed. After excluding one-time expenses, Outsourcing Expenses are divided into three categories.
(unit: million yen)
FYE March 2001 FYE March 2002 FYE March 2003
Major Items of SG and A Variable / Fixed 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2QCommison paid Variable (based on trading volume) 146 126 32 22 34 34 42 27 44 36Exchange and Association fees Fixed 12 17 22 19 24 22 22 20 21 19Communication and Freight Variable (based on trading volume) 66 76 69 59 75 79 87 66 62 53Information expenses Vairable (based on number of accounts) 57 81 67 72 78 79 122 120 123 125Advertising Expense Fixed 23 42 23 6 16 17 17 6 6 10Directors' compensation Fixed 2 7 7 7 7 7 7 7 6 6Employees salaries Fixed 95 107 109 103 93 143 141 139 115 118Equipment, Furniture and Fixture Variable (based on number of accounts) 157 200 231 250 250 285 306 327 317 307Outsourcing Expense (1) Fixed (30%) 71 78 80 82 83 97 107 100 95 92Outsourcing Expense (2) Variable (20%: based on trading volume) 47 52 53 54 56 64 71 67 63 61Outsourcing Expense (3) Variable (50%: based on number of accoun 118 130 133 136 139 162 178 167 158 154Outsourcing Expense (4) One-time Expenses 79 14 5 13 0Amortization of Goodwill Fixed 10 10 10 10 10 10 10 10 10 10Variable Cost (based on trading volume) (A) 259 254 154 135 165 179 201 160 170 151Variable Cost (based on # of accounts) (B) 332 411 431 458 467 527 607 616 612 588Fixed Cost (+ one-time cost) (C) 213 261 251 227 233 377 320 290 256 257Total major items listed above 803 926 835 820 865 1,085 1,129 1,066 1,039 997Ratio to Total SGA (total of major item of SGA / total SGA) 95% 91% 90% 92% 88% 92% 93% 94% 91% 88%
2.2.2.2.Brokerage Commision takes major portion in Operating RevenueBrokerage Commision 587 607 582 671 795 664 698 688 726 551Operating Revenue 647 850 748 752 942 764 779 794 811 641Brokerage Commision/Operating Revenue 91% 71% 78% 89% 84% 87% 90% 87% 90% 86%
3.3.3.3.Calculate Variable cost per trade and the othersQuarterly Trading Volume ('000 trades) (D) 369 414 378 441 518 441 465 461 482 372Average Commision / Trade (Yen) 1,591 1,466 1,540 1,522 1,531 1,506 1,501 1,493 1,508 1,481Variable (based on trading volume) / Tra(A)/(D) (Yen) 702 614 407 307 317 406 432 347 354 408Average Commission / Trade - Variable (based on trading volume) /Trade (Yen) 889 853 1,132 1,215 1,214 1,100 1,069 1,146 1,154 1,073
4.4.4.4.Calculation of estimated Break-Even point to cover both Fixed cost and Variable cost based on number of accountsBreak-even Point Estimate (Quaterly) ('000 trades) 612 788 601 564 577 822 867 791 753 788Break-even Point Estimate (Monthly) ('000 trades) 204 263 200 188 195 274 289 264 251 262
7
BreakBreakBreakBreak----Even Analysis Even Analysis Even Analysis Even Analysis –––– Number of TradeNumber of TradeNumber of TradeNumber of Trade
FYE 2003/3 2Q
■■■■ Costs are maintained relatively low; no material changes in break-even number of trade.
■■■■ Variance between “break-even” and “actual” has enlarged due to the shrink of number of trades affected by stagnant Japanese stock market
332 411 431 458 467 527 607 616 612 588213
261 251 227 233
320 290 256 257377
612 601564 577
822791
753788
369414
378
465 461 482
372
788
867
518441 441
0
500
1,000
1,500
2,000
2,500
FYE 03/011111Q
3Q FYE 03/021111Q
3Q FYE 03/031Q
Cos
ts (\
mill
ion)
0
200
400
600
800
1,000
Num
ber
of tr
ades
(000
)
Fixed Cost (incl. One time cost)Variable Cost based on Number of AccountsActual number of tradeBreak even number of trade
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BreakBreakBreakBreak----Even Analysis Even Analysis Even Analysis Even Analysis –––– Executed Deal RatioExecuted Deal RatioExecuted Deal RatioExecuted Deal Ratio
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Apr-00
May-00
Jun-00
Jul-0
0Aug-0
0Sep
-00Oct-
00Nov
-00Dec-
00Ja
n-01Feb
-01Mar-
01Apr-0
1May
-01Ju
n-01Ju
l-01
Aug-01
Sep-01
Oct-01
Nov-01
Dec-01
Jan-02
Feb-02
Mar-02
Apr-02
May-02
Jun-02
Jul-0
2Aug-0
2Sep
-02
B/E executed deal ratio Actual executed deal ratio
B/E executed deal ratio is gradually declined.
Affected by the merger ofSaison Securities Co.,Ltd.
((((B/E executed deal ratio))))=((((B/E number of executed deal)))) /((((Number of accounts))))((((Actual executed deal ratio)=()=()=()=(Actual number of executed deal)))) /(accounts))))
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((((Index:::: April 2000====100))))
0
100
200
300
400
500
600
Apr
/00
May
/00
Jun/
00
Jul/0
0
Aug
/00
Sep/
00
Oct
/00
Nov
/00
Dec
/00
Jan/
01
Feb/
01
Mar
/01
Apr
/01
May
/01
Jun/
01
Jul/0
1
Aug
/01
Sep/
01
Oct
/01
Nov
/01
Dec
/01
Jan/
02
Feb/
02
Mar
/02
Apr
/02
May
/02
Jun/
02
Jul/0
2
Aug
/02
Sep/
02
Trad
ingV
olum
e
0.0%
1.5%
3.0%
4.5%
6.0%
7.5%
9.0%
Shar
e
TSE Individual Trading Volume ((((General Participants with capital of Yen 3bil or larger))))Monex: Trading volume at TSEMonex Share
TSETSETSETSE Trading VolumeTrading VolumeTrading VolumeTrading Volume vs vs vs vs Monex Trading VolumeMonex Trading VolumeMonex Trading VolumeMonex Trading Volume
Source: TSE , JSDA and Monex
Margin Trading Volume at Online trading increase by 280 %, whileCash Trading volume increase by 30%
Spot vs. Margin at Online trading
Apr-Sep 00
Cash79%
Margin21%
Apr-Sep 01
Cash64%
Margin36%
Apr-Sep 02
????????
Oct 00 - Mar 01
Cash71%
Margin29%
Oct 01 - Mar02
Cash57%
Margin43%
10
Monex vs. Nikkei 225 average Index(based on August 4, 2000)
Stock PriceStock PriceStock PriceStock Price
0
20
40
60
80
100
120
140
160
180
200
Aug/00
Sep/00
Oct/00
Nov/00
Dec/00
Jan/01
Feb/01
Mar/01
Apr/01
May/01
Jun/01
Jul/0
1Aug
/01Sep
/01Oct/
01Nov
/01Dec/
01Ja
n/02Feb
/02Mar/
02Apr
/02May
/02Ju
n/02Ju
l/02
Aug/02
Sep/02
Monex share price (closing price of Aug. 4, 2000=100)
Nikkei 225 average index ((((closing price of Aug. 4, 2000====100))))
Monex IPO Price ( ( ( (closing price of Aug. 4, 2000====100))))
Price movement from Aug. 4, 2000(as of the end of September 2002)
Monex (based on IPO price) -64%Nikkei 225 average index -40%
11
ⅠⅠⅠⅠ. Financial Results
ⅡⅡⅡⅡ. Other Business
ⅢⅢⅢⅢ. Newly introduced Services and our Business Model
12
0
50,000
100,000
150,000
200,000
250,000
Apr-00
May-00
Jun-00
Jul-00
Aug-00
Sep-00
Oct-00
Nov-00
Dec-00
Jan-01
Feb-01
Mar-01
Apr-01
May-01
Jun-01
Jul-01
Aug-01
Sep-01
Oct-01
Nov-01
Dec-01
Jan-02
Feb-02
Mar-02
Apr-02
May-02
Jun-02
Jul-02
Aug-02
Sep-02
MonexDLJMatsuiE*Trade
Number of accounts
Number of customersNumber of customersNumber of customersNumber of customers’’’’ accountsaccountsaccountsaccounts
13
Account acquiring costsAccount acquiring costsAccount acquiring costsAccount acquiring costs
Account acquiring costs per account (Yen)
Advertising costs (Yen 000)
Newly acquired accounts
0
5,000
10,000
15,000
20,000
25,000
0
10,000
20,000
30,000
40,000
50,000
0
500
1,000
1,500
2,000
2,500
3,000
FYE 03/00
(Quarterly
Average)
FYE 03/01
1Q
2Q 3Q 4Q FYE 03/021Q
2Q 3Q 4Q FYE 03/03
1Q
2Q
12,891yen
5,120
66 mil yen
Matsui
3,710 yen
5,702yen
886 yen
A.A. costs
15,9045,0867,080A/C
59 mil yen
29 mil yen
6.3 mil yen
Ad. Costs
EtradeDLJMonex
Two major initial costs
(1) System related costs
(2) Account acquiring costs
Higher return on equity may be materialized by maintaining (2) AACosts low
FYE 03/2003 ・・・・AA costs have been kept low:・・・・However, advertising costs are expected to rise during FYE03/2003 2H in order to promote newly introduced services.
Comparison to the peers in 1Q
14
222.6318.5 274.5 303.1 334.1 349.0 326.6
31.028.7
30.331.4 31.9 31.8
55.5
64.466.0
63.476.1 72.0
64.2291.9
418.4374.5
402.1447.0 458.9
428.8
13.0
Mar/01 Jun/01 Sep/01 Dec/01 Mar/02 Jun/02 Sep/02
Domestic Stocks Investment Trust (excl. MRF) MRF Others
\9, 000
\12, 000
\15, 000
MRF Outstanding MRF Outstanding ((((((((Sep 30, 2002Sep 30, 2002)))))))) 64.2 billion Yen64.2 billion YenCash inflow from customers has always exceeded outflow since theCash inflow from customers has always exceeded outflow since the first day of business first day of business (excluding only 5 business days.)(excluding only 5 business days.)
Jun /02 to Sep/02: Nikkei 225 Jun /02 to Sep/02: Nikkei 225 -- 11.7% Monex Clients11.7% Monex Clients’’ Asset in Custody Asset in Custody –– 6.5%6.5%
Nikkei 225 Average Index
MRF and IT
CustomersCustomersCustomersCustomers’’’’ assets in Custodyassets in Custodyassets in Custodyassets in Custody
(Yen billion)
15
Investment Trust BusinessInvestment Trust BusinessInvestment Trust BusinessInvestment Trust Business
Monthly Fixed amountPurchase(as of Jun 2002) Number of orders
Monthly PurchaseAmount
Teigaku Tsumitate (Directwithdrawal from MRF) 3,141 63 mil yenCard de JIDO Tsumitate(Withdrawal from bank account) 5,442 115 mil yen
Monthly Fixed amountPurchase(as of Sep 2002) Number of orders
Monthly PurchaseAmount
Teigaku Tsumitate (Directwithdrawal from MRF) 3,154 61 mil yenCard de JIDO Tsumitate(Withdrawal from bank account) 5,952 123 mil yen
Investment Trusts Outstanding and Number of Order/Day
7.6 8.2 8.2 11.6 11 10.3 9.5 10.3 10.7 10.6 10.3 10.6 11.1 11.4 11.8 11.0 10.7 11.0 10.92.7 2.9 3.2
13.4 13.2 13.1 12.5 12.6 12.6 12.3 11.5 11.3 11.2 11.3 11.3 11.2 11.2 11.0 10.92.6 2.8 3.2
6.2 6.5 6.6 6.6 6.8 7.3 7.8 8.3 9.0 9.1 9.7 9.6 10.0 9.9 9.9
13 13.9 14.6
30.5 30 28.7 29.7 30.2 30.3 29.7 30.4 31.4 31.6 32.9 31.9 32.0 32.0 31.8
5.9
31
421
760 792839
773
879833
788
949 983 969
717794
889
405470
646 643
307
0
10
20
30
40
50
60
70
80
90
100
Mar/01
Apr/01May/01
Jun/01Jul/0
1Aug/01Sep/01Oct/0
1Nov/01Dec/
01Jan/02Feb/02Mar/0
2Apr/02May/02
Jun/02Jul/0
2Aug/02Sep/02
Outst
andi
ng (y
en b
illion
)
0
200
400
600
800
1,000
Orde
r/Day
Domestic Stocks IT Domestic Fixed Income IT Foreign IT Number of Order / day
Cash and IT outstanding (Yen billion) as of September 2002
83.0
177.5
64.2 31.8 96.0
about 100
NomuraFundnet Sec
Japan NetBank
Sony Bank
Monex, IncMRF
Deposit
IT
IT
Deposit
16
Underwriting businessUnderwriting businessUnderwriting businessUnderwriting business
※excluding issues only involved in Sales, ie. Monex inc. (8626)
Comparison with the others (FYE 3/2003 1Qand 2Q)
Source:Tokyo IPO
•We underwrote the followings (share) in 2Q:
COMPUTER WAVE INC. (5%)RENTRAK JAPAN CO., LTD (4%)NIPPON HERALD FILMS, INC (2%)Soft front (3%)AnGes MG, Inc. (2%) NS Solutions (0.75%)
Underwriting fee (Yen million)
28 132816
67
141
3319
167
FYE 03/01 FYE 03/02 FYE 03/03
4Q3Q2Q1Q
The Japanese IPO market of 1H/FYE 03/2003 shrunk by about 75% in terms of amount compared to that of 1H of last FY. (source: Nikkei )
Underwriting: number of issues
5 5
156
79
36
1116
FYE 03/01 FYE 03/02 FYE 03/03
4Q3Q2Q1Q
Underwriting: Number of issues
3
3
5
6
7
7
6
17
10
10
11
Underwriting amont (Yen million)
104
124
312
227
411
395
473
10237
785
520
515
Matsui
DLJ
E Trade
Monex
1111Q
2222Q
* Underwriting: number of issues and underwriting amount includes “ over-allotment”.
17
ⅠⅠⅠⅠ. Financial Results
ⅡⅡⅡⅡ. Other Business
ⅢⅢⅢⅢ. Newly introduced Services and our Business Model
18
【【【【Real Network】】】】・・・・ATM / CD・・・・CMA ((((Monex 《《《《Saison》》》》Card))))w/cash card+credit card function
Business Model Business Model Business Model Business Model –––– Structural Changes would support our model
Re = P×××× E1++++ P×××× E2 – ExpensesProbability of shift to
direct finance
Probability of no shift to
direct finance
Expected Return((((Firm Value)
【【【【Asset Gathering】】】】・・・・Monthly fixed purchase plan・・・・Account Aggregation・・・・Cyber FP・・・・Instant Cash settlement from banks
【【【【Partnership】】】】・・・・Joint Marketing with Credit Saison
Our earning
under the scenario
【【【【Government: Structural Change】】】】・・・・Democratization of capital market• Shift to direct finance・・・・New economic policy
【【【【Introduction of Stock Lending】】】】
Our earnings under the scenario
【【【【Margin Trading】】】】【【【【Cost Cut efforts】】】】
Mid-and Long-term Plan: : : : Grow to a new type of major financial institutionWe expect that the “structural changes” pursued by the Government would stimulate a “shift to direct finance”; we will obtain a large number of individual customers’ account. Short term Plan: : : : Improve profitability as early as possible by obtaining more revenue sources.
The above plans are supported by enough capital and liquidity.
Mid-and Long-term Plan: : : : Grow to a new type of major financial institutionWe expect that the “structural changes” pursued by the Government would stimulate a “shift to direct finance”; we will obtain a large number of individual customers’ account. Short term Plan: : : : Improve profitability as early as possible by obtaining more revenue sources.
The above plans are supported by enough capital and liquidity.
Innovation
19
Monex: unique ServicesMonex: unique ServicesMonex: unique ServicesMonex: unique Services【【【【Cash management account】】】】
Credit Card settlement through MRF account at Monex.
The nation wide ATM network of 25,000 Postal Offices
The instant cash settlement from banks on the website.
【【【【The unique fund management tool】】】】Account Aggregation service and Cyber FP on
the website
【【【【Information Service】】】】Professional–use real time
information system and various reports including JP Morgan
analyst report
20
Stock LendingStock LendingStock LendingStock Lending---- a new tool to enhance return on clients’ portfolio
・・・・Monex S/L clients could automatically lend their stock portfolio to Monex while retaining right to trade securities anytime. • Yield on S/L is subject to the market situation.
・・・・ Legal title of the securities is temporarily transferred from a lender to a borrower. The lender could not retain the benefits of ownership such as the voting rights and shareholders’ preference program.
• Instead, the lenders could receive the additional income equivalent to the dividend amount after withholding tax.
■■■■Special Campaign ((((until March 2003))))
・・・・ Campaign Yield on S/L 0.20%%%% p.a.
・・・・ Clients applying by the end of October 0.40%%%% p.a.
・・・・ 《《《《Saison》》》》Card Holders complying with some conditions 0.50%%%% p.a.
・・・・Monex S/L clients could automatically lend their stock portfolio to Monex while retaining right to trade securities anytime. • Yield on S/L is subject to the market situation.
・・・・ Legal title of the securities is temporarily transferred from a lender to a borrower. The lender could not retain the benefits of ownership such as the voting rights and shareholders’ preference program.
• Instead, the lenders could receive the additional income equivalent to the dividend amount after withholding tax.
■■■■Special Campaign ((((until March 2003))))
・・・・ Campaign Yield on S/L 0.20%%%% p.a.
・・・・ Clients applying by the end of October 0.40%%%% p.a.
・・・・ 《《《《Saison》》》》Card Holders complying with some conditions 0.50%%%% p.a.
Securities Lending: Monex customers could enhance their portfolio return by lending their own stock portfolio to Monex and receiving income.
【【【【Scheduled to start on January 15, 2003 / Application will be accepted from later October 2002】】】】
Securities Lending: Monex customers could enhance their portfolio return by lending their own stock portfolio to Monex and receiving income.
【【【【Scheduled to start on January 15, 2003 / Application will be accepted from later October 2002】】】】
Stock lending
Income
Stock lending
Income
S/L market
ING Securities
Tokyo
Partner
Client
【【【【S/L Mechanism】】】】
21
・・・・Flow s of Stocks( )( )( )( ), Cash Collateral ( )( )( )( ), Interest on loan( )( )( )( ), Fees on S/L ( )( )( )( )
・・・・When there exists shortage of specific stocks at JSF, the Seller of such stocks on margin should pay the special fees on borrowing stocks to JSF, and such fees are granted to the buyer of such stocks on margin.
・・・・Monex would earn profit when the sum of R1R1R1R1and R2R2R2R2 is larger than the sum of fees on loaned stocks payable to the clients for the cases D, E and F.
・・・・The cash collateral received in the case D and F, could be used for loans to the clients in case A. This loan is collateralized by stocks; in addition, maintenance margin is held at margin accounts.
・・・・The stocks are loaned to the clients selling on margin ; which is collateralized by cash, in addition to margin maintenance.
((((In principle, when Monex loans cash or stocks to its clients and/or the S/L market, all loans are collateralized.))))
・・・・Stocks and Cash are efficiently reused within the scheme.
A
Stock Lending structureStock Lending structureStock Lending structureStock Lending structure
Stock lending position to be loaned to the market through ING Securities
Monex’ clients Monex ING/JSF
AAAA
BBBB CCCC DDDD
EEEE
FFFF
LoanSecurities collateral
1.9%1.9%1.9%1.9%
BBBB
LoanSecurities collateral
1.9%1.9%1.9%1.9%
Buyer on margin
StocksCash Collateral1.15%1.15%1.15%1.15%
Seller on margin
CCCCStock
Cash Collateral1.15%1.15%1.15%1.15%
DDDD
StocksCash Collateral1.15%(R1)1.15%(R1)1.15%(R1)1.15%(R1)
Seller on margin
StocksFees on S/LStock
Lender
Buyer on margin
Seller on margin
EEEEStocks
Fees on S/LStock Lender
FFFF
StocksFees on S/LStock
Lender
StocksCash Collateral
Fees on S/L((((R2)R2)R2)R2)
Purchase on margin
Sell on margin
Stock Lending position
0000.4%4%4%4%
22
Margin Trading ■■■■To be released on December 2, 2002
■■■■Commission
・・・・Internet Margin trading commission table: Same as spot trades※※※※
・・・・Stop Loss Order ¥ 750 / trade※※※※ A new rate structure will be also introduced: ¥ 3,000 for unlimited number of trade up to yen
3,000,000 trade amount in total.
■■■■Interest charge on loan for buying securities 1.9%
for selling securities 0.0%
■■■■Charge for borrowing stocks 1.15%
■■■■Minimum Margin ¥ 300,000
■■■■Initial Margin 33%%%%
■■■■Maintenance Margin 30%%%%
■■■■ Start-up Campaign
・・・・ ¥ 4,000 stamp duties will be reimbursed to clients who makes a margin trade by the end of December 2002
・・・・ Internet margin trade commission: ¥ 900/trade by the end of March 2003
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Margin trading: Impact on total number of tradesMargin trading: Impact on total number of tradesMargin trading: Impact on total number of tradesMargin trading: Impact on total number of trades
A. Margin accounts with higher activities (same as other competitors’ clients)
Number of trades: Ratio of Prospective one margin account to one cash account @ Monex
16:1 (Note 1)
Note 1: Data from other online brokers’ corporate data Note 2: Monex’ survey of clients during June 10 – 13, 2002.Note 3: The above calculations are made based on our current forecast and estimate; the actual results may differ materially from our estimate due to various factors.
B. Margin accounts with moderate activities (margin trading beginners)
4:1
Increase in number of trades when 1% of Monex customers open margin accounts A or B
15%
3%
■■■■Estimate of activities level
■■■■Estimate of number of margin a/c Ratio of number of margin a/c to current Monex Clients
4%
19%
Assumption
50% of Monex clients with experience of margin trading (Note 2): 8%
50% of Monex clients interested in margin trading: 38%
A. Margin accounts with higher activities (same as other competitors’ clients)
B. Margin accounts with moderate activities (margin trading beginners)
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Revenue increase ⇒⇒⇒⇒ expected from January 2003■■■■Advertising and promotion :::: An increase in number of new accounts as well as
number of trades is expected.Promotional price (Margin trading ¥900 and night trade¥470 ): a decrease in revenue per trade is projected.
■■■■Margin trading:::: released on 12/02/2002, application for margin account being accepted from10/01/2002
As of 10/16/2002: about 2000 applicationforms has been accepted. Real increase in Revenue⇒⇒⇒⇒ could defer until April 2003
■ ■ ■ ■Stock Lending ::::To be released in January 2003
Could possibly be real revenue source after the promotional period. Could also be used as an efficient way of financing; a possible decrease in financing costsCould attract new customers and their stock assets into Monex.
Note: The above statements are based on our current estimate and assumption; the actual results may differ materially from expected results due to various known and unknown factors
Margin account and expected increase in trades
1% 2% 3% 4%5% 30% 45% 60% 75%
10% 45% 60% 75% 90%15% 60% 75% 90% 105%20% 75% 90% 105% 120%
A※※※※B※※※※
※※※※see page 23
New servicesNew servicesNew servicesNew services: : : : Impact on ProfitabilityImpact on ProfitabilityImpact on ProfitabilityImpact on Profitability 【Revenue】
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Introduction of new services require the following costs
⇒ ⇒ ⇒ ⇒ Costs to increase from 2H of this FY
■■■■Additional Personnel costs:::: for a few additional experienced employees
■■■■System related capital investment ( ( ( (5 year lease) ) ) )
Margin trading : ¥about 250 million
Stock lending: ¥about 80 million
⇒ ⇒ ⇒ ⇒ Costs in 2H of this FY
■■■■Marketing costs :::: about ¥70 million
Advertising costs((((newspaper、、、、magazine、、、、DM)))) about ¥30-40 million
Stamp tax ¥ 4,000 cash back campaign
ATM deposit : free commission campaign (at Post Office))))
Note: The above statements are based on our current estimate and assumption; the actual results may differ materially from expected results due to various known and unknown factors
New serviceNew serviceNew serviceNew service: : : : Impact on ProfitabilityImpact on ProfitabilityImpact on ProfitabilityImpact on Profitability 【 【 【 【CostsCostsCostsCosts】】】】
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Corporate Governance and DisclosureCorporate Governance and DisclosureCorporate Governance and DisclosureCorporate Governance and Disclosure
Corporate Governance・・・・Board of Directors: : : : 4 external directors among 6 directors・・・・Auditors: : : : One standing statutory auditor and 3 statutory auditors
(all four are defined as “external auditors” by Japanese Commercial Code)
・・・・Advisory Board :::: Consists of respected individuals- being quarterly held ・・・・Orientation Committee:::: quarterly meetings consisting of about 20 customer
representatives and the Company’s officers. Disclosure・・・・Disclosure Policy: : : : Formulated a disclosure policy to eliminate arbitrariness and
avoid selective disclosures. The disclosure policy is publicly available on the Company’s website (http://www.monex.co.jp/).
・・・・Monthly and Weekly disclosure:::: Regularly disclose the data with the same format ・・・・”Monex Mail”(e-mail magazine)::::CEO’s view is exposed to the readers every business day⇒ ⇒ ⇒ ⇒ Monex is well aware of the current movement after the Enron and Worldcom shock in the
U.S. regarding Corporate Governance and Disclosure, including Sarbanes-Oxley act of 2002 as well as the new standards of NYSE and NASDAQ; Monex continuously makes efforts to establish management and monitoring system and pursue disclosure that is acceptable to overseas investors
http://www.monex.co.jp/http://www.monex.co.jp/