Ichiyoshi Securities : EARNINGS REPORT FOR FIRST QUARTER OF FISCAL 2022

EARNINGS REPORT FOR FIRST QUARTER OF FISCAL 2022

（April 1 to June 30, 2022）

(Consolidated under Japanese GAAP)

Name of Company: Ichiyoshi Securities Co., Ltd.

Listed on: Tokyo Stock Exchange (Prime Section) (Stock code: 8624)

Corporate representative: Mr. Hirofumi Tamada, President & Representative Executive Officer

Inquiry to: Mr. Shoichi Yamazaki, Senior Managing Executive Officer & Chief Supervisor for Finance and Management

Tel: (03) 4346-4512(URLhttp://www.ichiyoshi.co.jp/)

Date of filing First Quarter Report: August 12, 2022 (scheduled)

Supplementary documents for quarterly earnings: Provided.

Quarterly earnings-reporting meeting: None.

(Figures less than one million yen are discarded)

1. Outline of Consolidated Business Result for First Quarter of Fiscal 2022 (from April 1 to June 30, 2022)

1. Highlights of consolidated business result (in millions of yen except for per-share figures)

(% shows year-on-year change)

Notes: Comprehensive income: For the first quarter of fiscal 2022: 246 million yen (-66.2%) For the first quarter of fiscal 2021: 730 million yen ( -- )

(2) Consolidated financial condition (in millions of yen)

Note: Shareholders' equity: As of June 30, 2022: 28,391 million yen

As of March 31, 2022: 30,042 million yen

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2. Dividends

Notes: (i) Ichiyoshi Securities Co., Ltd. (the "Company") declares dividends payable to shareholders of record as of September 30 (semiannual dividends) and March 31 (final dividends) of each fiscal year, but not to shareholders as of June 30 and December 31 of each fiscal year.

(ii) It is not the Company's practice to give an earnings or dividend forecast. Hence, ****.

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3. Outlook for Business Result for Fiscal 2022 (from April 1, 2022 to March 31, 2023)

Since the forecast of earnings in financial-instruments trading, the main-line business of the Company and its group companies, is hard to make due to volatile factors in the market, the Company does not provide such forecast prior to the end of each quarter. Instead, the Company intends to release preliminary earnings figures after the end of each quarter as and when such figures become available.

Points to note:

1. Changes in material subsidiaries (including changes in special subsidiaries leading to a change in scope of consolidation): None.
2. Application of an accounting treatment unique to the preparation of quarterly financial statements: None.
3. Changes in accounting policies and estimates and restatement of revisions:
4. 1. Changes in accounting policies resulting from revisions to accounting standards: None.
   2. Changes in accounting policies other than those in (i): None.
   3. Changes in accounting estimates: None.
   4. Restatement of revisions: None.

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1. Number of shares issued (common stock):
2. 1. Number of shares issued as of June 30, 2022: 40,431,386 shares (including treasury shares)

   Number of shares issued as of March 31, 2022: 42,431,386 shares (including treasury shares)

   1. Number of treasury shares as of June 30, 2022: 6,230,897 shares.

   Number of treasury shares as of March 31, 2022: 6,327,697 shares.

   1. Average number of shares outstanding during the first quarter of fiscal 2022: 35,554,991 shares.

Average number of shares outstanding during the first quarter of fiscal 2021: 36,103,809 shares.

Additional points to note:

1. Quarterly earnings figures included in this report are released without being reviewed by certified public accountants.
2. Explanation for proper use of earnings forecast and other special points to note:

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For the same reason that the Company does not provide an earnings forecast prior to the end of each quarter as stated in 3. Outlook for Business Result for Fiscal 2022 (from April 1, 2022 to March 31, 2023 on page 2, the Company does not provide a dividend forecast.

I. Outline of Business Result

1. Outline of Business Result for First Quarter of Fiscal 2022

During the first quarter of fiscal 2022, while affected by the worsening of the Ukrainian situation and the stagnating Chinese economic activities, the Japanese economy showed signs of recovery in personal consumption along with a fall in the novel corona-virus infections. There was also seen an improvement in equipment investments by businesses, despite the weaker yen and higher prices of resources, signaling a recovery trend of economy as a whole. The global economy, on the other hand, continued to show signs of mild growth despite spiraling inflationary pressure.

In the meantime, the Nikkei Stock Average on the Tokyo Stock Exchange (the TSE) recorded a year-to-date-low of 25,688yen on May 12 out of concern that the aggressive financial tightening of the Federal Reserve Board (the FRB) might decelerate the global economy. Thereafter, the Nikkei Stock Average recovered and recorded a year-to-date-high of 28,389yen on June 9, close to a level marked about 5 months ago on January 18, in anticipation of the normalization of the Chinese economy along with the lifting of city lockdowns and the reopening of foreign tourist acceptances by the Japanese government. As caution mounted over the possible acceleration of interest rate hikes by the FRB due to the fact that the U.S. consumer prices logged, on June 10, the highest roses in 40 years and 5 months, the Nikkei Stock Average turned downward and recorded 25,520yen on June 20, falling below the year-to-date low logged on May 12. Thereafter, the Nikkei Stock Average recovered slightly, ending the period at 26,393yen.

On the foreign currency market, yen-selling and dollar-buying progressed in anticipation of increasing discrepancy between the Japanese interest rates and the U.S. ones. On June 29, the yen recorded 136.98yen per 1 U.S. dollar, the lowest yen value in 24 years. The yen ended the period at the upper side of the 135yen per 1 U.S. dollar level.

In the Japanese emerging-stock market, the TSE Mothers Index underwent increasing corrections and recorded 615 on June 20, the lowest in 2 years and 2 months since April 2020. The Index ended the period at 661.

In the TSE Growth Section, high-PER stocks, regarded as relatively highly valued, were sold off. The TSE Growth Section Index closed the period at 843.

In the TSE Prime Section, the daily average turnover was 3,389.9 billion yen. In the TSE Standard Section, the daily average turnover was 85.7 billion yen. In the TSE Growth Section, the daily average turnover was 128.1 billion yen.

Under these circumstances, the Company has been pushing through its "Decisive Action for Reform" to establish "Stock Type Business Model" (asset-accumulation type business model), initiated 2 years ago. Being in the last year of its Medium-Term Management Plan "Attack 3," the Company is determined to more powerfully push through its "Decisive Action for Reform" to attain its numerical target of 3 trillion yen in customers' assets in custody and cost-coverage ratio of 60%.

With respect to activities on stocks, the Company has proposed to customers asset-backed stocks with stress on stability and stable dividends under low-interest rate and high inflationary circumstances. In addition, the Company has recommended to customers investment in small- and medium-cap growth stocks selected based on the Company's strength in research. The

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Company has thus made various proposals and recommendations to promote stocks as means of medium-tolong-termasset-formation.

. With regard to "Dream Collection," a fund wrap account vehicle, it has shown a favorable performance as a core asset in customers' medium- to long-term asset management. Its outstanding balance as of June 30, 2022 registered 191.0 billion yen, up 14.8% from June 30, 2021.

With respect to investment trust funds (other than Dream Collection), the Company has placed its priority on the promotion of funds investing in global public utilities, funds investing in stocks or domestic REIT funds with high potentials of prospective dividends or profit distributions and funds investing in global value stocks and global small- and medium-cap growth stocks. The outstanding balance of these funds as of June 30, 2022 was 739.5 billion yen, down 6.1% from June 30, 2021.

With respect to Ichiyoshi Asset Management Co., Ltd. the amount of assets under its management recorded 415.9 billion yen as of June 30, 2022, up 3.0%, as wrap-account contracts increased while net asset values of funds under management recorded a decline.

As a result of these activities, net operating revenue for the first quarter of fiscal 2022 amounted to 4,335 million, down 15.8% from the first quarter of fiscal 2021. Operating cost and expenses amounted to 3,952 million yen, down 7.4%. Hence, operating income registered 383 million yen, down 56.6%.

Customers' assets in custody as of June 30, 2022, amounted to 1,884.7 billion yen, down 3.4%. The Company regards the cost coverage ratio as an important management index which indicates the degree of the Company's advance towards the stability of its earnings structure and "Stock Type Business Model" (asset-accumulation type business model). The cost coverage ratio for the first quarter of fiscal 2022 was 51.8%, up from 50.1% for the year-earlier quarter. (The cost coverage ratio is the ratio at which the sum of fund management fees, trailer fees and

wrap-account fees cover operation cost and expenses.)

Set forth below are revenue sources, cost and expenses and financial condition.

i. Commissions

Total commissions for the first quarter of fiscal 2022 amounted to 4,243 million yen, down

15.2 % from the year-earlier quarter.

1. Brokerage commissions

Total brokerage commissions on stocks fell 23.0% to 1,086 million yen. Brokerage commissions on small- and medium-sized stocks (stocks listed on Standard Section and Growth Section of the TSE, Main Section and Next Section of Nagoya Stock Exchange) registered 161 million yen, down 44.1%, and accounted for 14.9% of total brokerage commissions on stocks.

(b) Commissions from underwriting and solicitation to specified investors

In the primary market, the Company participated in 4 initial public offerings (of which the Company lead-managed 2) on a management and underwriting basis as against 10 participations ( of which the Company lead-managed 2) in the year-earlier period. In the secondary market (for follow-on financing), the Company did not participate in any deal. As a result, commissions from underwriting and solicitation to specified investors amounted to 121 million yen, down 43.0% from the comparable period of fiscal 2021.

The cumulative number of companies whose offerings were lead- or co-managed by the Company stood at 1,194 (of which 66 were lead-managed by the Company) as of June 30,

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2022.

(c) Commissions from distribution and solicitation to specified investors

As commissions from distribution of investment trust funds recorded 791 million yen, down 25.7% from the year-earlier period, total commissions from distribution and solicitation to specified investors registered 804 million yen, down 25.5%.

(d)Commissions from other sources

The trailer fees related to the outstanding balance of investment trust funds under custody registered 1,006 million yen, down 0.3% from the year-earlier period. Investment trust management fees at Ichiyoshi Asset Management Co., Ltd. recorded 475 million yen, up 13.9%. With the addition of fund wrap-account fees of 567 million yen, down 20.2%, total commissions from other sources amounted to 2,186 million yen, down 3.6%.

ii. Gains or loss on trading

Trading in stocks, etc. recorded net gains of 1 million yen, down 92.8%. Trading in bonds and foreign exchange, etc. registered net gains of 5 million yen, up 139.4%. As a result, total net gains on trading amounted to 7 million yen, down 73.8%.

iii. Net financial revenue

Financial revenue decreased 23.2% to 44 million yen as the average outstanding amount of loans on margin transactions during the period declined. Financial expenses declined 27.2% to 9 million yen. As a result, net financial revenue registered 35 million yen, down 22.0%.

Resultantly, net operating revenue for the first quarter of fiscal 2022 amounted to 4,335 million yen, down 15.8%.

iv. Operating cost and expenses

Operating cost and expenses recorded 3,952 million yen, down 7.4%, as personnel-related expenses and real estate-related expenses fell.

v. Non-operating income and expenses

The Company recorded non-operating income of 16 million yen, mainly consisting of 11 million yen of dividends on investment securities. As a result, net non-operating income amounted to 16 million yen, down 70.4%.

Resultantly, current income for the first quarter of fiscal 2022 amounted to 399 million yen, down 57.4%.

vi Extraordinary income and loss

Mainly as a result of payment of a settlement money, the Company registered net extraordinary loss of 0 million yen, a decline of 136 million yen from the year-earlier period.

Resultantly, net income before taxes and tax adjustment for the first quarter of fiscal 2022 amounted to 399 million yen, down 62.8%. Net income attributable to owners of parent after deduction of corporate taxes, resident taxes and enterprise taxes, in the aggregate amount of 45 million yen and tax adjustment in the amount of 91 million yen amounted to 262 million yen, down 66.5%.

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