SBI Holdings, Inc. Financial Analysis: Net Profit Growth of 24.4%

Business Description

SBI Holdings, Inc. is a Japanese company with diverse business operations. The company operates through five primary segments:

• Financial Services Business: Includes securities brokerage, banking services, and life, property, and casualty insurance.
• Asset Management Business: Involves setting, solicitation, and management of investment trusts, investment advice, and provision of financial products information.
• Investment Business: Focuses on fund management and investments in Internet technology, fintech, blockchain, finance, and biotechnology-related ventures.
• Crypto-asset Business: Provides crypto-asset exchange and trading services.
• Next Gen Business: Encompasses Biotechnology, Healthcare & Medical Informatics, development and distribution of pharmaceutical products, health foods, and cosmetics, and advanced fields related to Web3 and renewable energy.

Industry Position and Market Share

SBI Holdings holds a significant position in the financial services industry in Japan, with a diverse portfolio that spans multiple sectors. Its competitors include major financial institutions and fintech companies. The company’s broad range of services provides a competitive advantage.

Revenue Streams and Customer Base

The company’s revenue streams include:

• Interest income from loans and bonds
• Insurance revenue
• Revenue from financial products and investment services
• Crypto-asset exchange and trading services
• Sales of goods and services in the Next Gen Business

SBI Holdings serves a diverse customer base, including individual investors, corporate clients, and financial institutions.

Financial Statement Analysis

Income Statement

For the six months ended September 30, 2024, SBI Holdings reported:

• Revenue: ¥676,030 million, a 17.6% increase year-on-year
• Profit before income tax expense: ¥78,872 million, a 12.3% increase year-on-year
• Profit attributable to owners: ¥44,726 million, a 20.6% increase year-on-year

Basic earnings per share increased from ¥136.00 to ¥148.07.

Balance Sheet

As of September 30, 2024, the company’s total assets were ¥28,610,790 million, an increase from ¥27,139,391 million as of March 31, 2024. Total equity decreased to ¥1,842,665 million from ¥1,907,346 million.

Cash Flow Statement

Key cash flow activities included:

• Operating cash inflows: ¥635,944 million, driven by increases in customer deposits and bonds and loans payable.
• Investing cash outflows: ¥597,336 million, primarily due to purchases of investment securities.
• Financing cash inflows: ¥257,418 million, supported by proceeds from the issuance of bonds and long-term loans.

Dividends

The company declared an interim dividend of ¥30.00 per share for the fiscal year ending March 31, 2025, consistent with the previous year.

Key Findings and Recommendations

Strengths

• Diversified revenue streams across multiple business segments
• Strong growth in revenue and profits
• Solid cash flow from operating activities

Risks

• Decrease in total equity
• Significant investing cash outflows
• Losses in the Investment and Next Gen Business segments

Investor Recommendations

For Current Holders: Given the strong revenue and profit growth, it is recommended to hold the stock. The company’s diverse business operations and strong cash flow position make it a solid investment.

For Potential Investors: Considering the company’s positive financial performance and growth potential in various segments, it is recommended to buy the stock. However, investors should be aware of the risks associated with equity decreases and significant cash outflows.

Special Activities

Notable activities include the inclusion of SBI Leasing Services Co., Ltd. into the Financial Services Business segment, as well as efforts in advanced fields related to Web3 and renewable energy.

Report Date

The report was published on November 8, 2024, for the six months ended September 30, 2024.

Disclaimer

This analysis and recommendation are based on the financial report provided. Investors should conduct their own research and consider their financial situation before making any investment decisions.