FUJITOMI SECURITIES CO., LTD. (E03728) Stock Price

Fujitomi Securities is a brokerage firm that operates investment services centered on financial instruments trading and commodity futures trading. The company executes trades on behalf of clients in foreign exchange margin trading (Click 365) and stock index margin trading (Click 365) handled by the Tokyo Financial Exchange, as well as futures contracts for precious metals, agricultural products, and energy commodities listed on the Osaka Exchange and Tokyo Commodity Exchange.

The company's revenue is primarily supported by commissions from individual investors and other clients. Specifically, it earns commissions by intermediating trades in precious metal futures such as gold and platinum, agricultural futures such as corn and soybeans, and energy futures such as crude oil and gasoline. Similarly, in foreign exchange margin trading, the company secures commission income from customer transactions.

The company operates two business divisions: Investment Services and Lifestyle and Environment. The Investment Services division handles commodity and margin trading commissions and also sells gold bullion, though this is currently suspended due to anti-smuggling and anti-money laundering measures. The Lifestyle and Environment division pursues business diversification by handling life insurance and casualty insurance sales, real estate leasing and sales, and selling solar power generators and LED lighting.

Fujitomi Securities is currently working to turn around its business amid a challenging operating environment. The company has posted operating losses for five consecutive periods, and there are significant concerns about its ability to continue as a going concern. Therefore, the top priority is to return to profitability as soon as possible and establish a stable revenue base. The company maintains a two-pillar business structure consisting of "Investment Services" and "Lifestyle and Environment Services," and aims to enhance corporate value by providing services that meet market and customer needs.

In the Investment Services business, the company is reducing its dependence on commodity futures trading and focusing on financial product trading. In response to new lifestyles brought about by the COVID-19 pandemic, the company is focusing on expanding customer touchpoints through internet channels and improving trading infrastructure through digitalization. While strengthening employee consulting capabilities and enhancing information services, the company plans to continue strengthening face-to-face sales, which is its core strength, while also considering the introduction of new product offerings.

In insurance brokerage operations, the company is expanding its scale by increasing sales staff and opening new sales offices. To meet diverse customer needs, the company is enhancing services around financial planning and is committed to customer-centric operations. In real estate, the company targets residential properties in the Tokyo metropolitan area as its main focus, and aims to secure stable profits by quickly responding to market changes while also considering investments in mid-sized properties.

In response to technological innovation, the company is promoting IT utilization in sales and operational efficiency improvements in management to align with changes in work practices that emerged during the pandemic. In insurance brokerage operations, the company is improving operational efficiency through IT and other tools, and is advancing digitalization across the organization to adapt to new lifestyles. However, since the company's core business of futures and financial product trading is heavily influenced by market trends, setting highly reliable numerical targets is difficult. The company has adopted a strategy of focusing first on achieving continuous profitability.