SBI Global Asset Management Co.,Ltd. Q2 FY2026 earnings call

• Upcoming Merger and Post-Merger Structure

  • SBIレオスひふみ will be merged via absorption into SBIグローバルアセットマネジメント, with SBIレオスひふみ delisting on November 27, 2025. Shareholders will receive 36 shares of SBIグローバルアセットマネジメント for every 100 shares of SBIレオスひふみ held, with automatic share conversion requiring no extra action from shareholders. Trading of SBIグローバルアセットマネジメント shares for converted holders will begin December 1, 2025.
  • The merged group will hold three core subsidiaries: レオス・キャピタルワークス, SBIアセットマネジメント, and SBI岡三アセットマネジメント, with combined total operating profit of ~6 billion yen and combined AUM of 10 trillion yen, making it a top 10 asset management firm in Japan. The merger was requested by parent SBI, not initiated by SBIレオスひふみ management, which had previously aimed for full independent listing.
  • レオス・キャピタルワークス will remain an operating subsidiary under the merged group, with existing management and corporate culture unchanged, and existing SNS and content operations will continue as before.

• Stated Merger Benefits for Shareholders

  • Increased scale will grant greater influence with distributor banks/securities firms and portfolio companies, improving business positioning.
  • Larger combined market capitalization will increase inclusion in index allocations by institutional investors, and higher PER is expected even with unchanged EPS, creating upward pressure on share price. Management judges upside risks for share price outweigh downside risks.

• Operational and Product Updates

  • Direct sales ratio and average investment trust fee have both increased, driven by intentional strategic shift to higher-fee, higher value-added products, resulting in higher profit margins against an industry trend of falling fees. The firm currently has 302 distributor partners, the largest network among the three group subsidiaries.
  • Cross-selling of products across the three subsidiaries' distribution channels will be enabled post-merger, expected to drive future growth.
  • つみえーる, an unprecedented product combining accumulative investment and insurance, launched June 30, 2025, with growth targeted over a 5-10 year timeline.
  • SBI group prioritizes expansion of cryptocurrency-related investment products, which will be added to the merged firm's product lineup as a new growth driver for the business and share price.

• Dividend Policy Outlook

  • SBIグローバルアセットマネジメント currently has a 100% payout ratio, while SBIレオスひふみ has a 50% payout ratio. Management expects the merged firm will likely adjust toward a higher payout ratio, with 75% or a level close to 100% considered likely to avoid negative share price impact from cutting existing SBIグローバルアセットマネジメント dividends. An upward revision to dividend payouts is expected in the short term, which is a positive factor for share price.

1. Core asset management business (SBIレオスひふみ / レオス・キャピタルワークス): Assets Under Management (AUM) reached 1.47 trillion yen at Q2 end, and currently exceeds 1.5 trillion yen (all-time high), with 1.6 trillion yen achievable with favorable market conditions. The half-year saw slight revenue decline due to Q1 Trump shock impacts, but October-November market conditions have improved performance to a relatively strong current state. Operating profit is approximately 2 billion yen as one of the three combined subsidiaries.
2. SBIアセットマネジメント: Operating profit of approximately 2 billion yen, part of the combined 6 billion yen total operating profit for the merged entity.
3. SBI岡三アセットマネジメント: SBI holds 51% ownership, operating profit of approximately 2 billion yen, part of the combined 6 billion yen total operating profit for the merged entity.
4. Key product segments:

• ひふみクロスオーバーpro: Grown from 0.8 billion yen to 37-38 billion yen, on track to reach 100 billion yen. It is Japan's first product allowing investment in unlisted stocks.
• YouTube channel お金のまなびば!: Reached 700,000 subscribers, the largest financial channel in the industry.

• AUM is expected to continue growing, with 1.6 trillion yen achievable for レオス・キャピタルワークス with continued favorable market conditions.
• ひふみクロスオーバーpro is expected to continue growing through new distributor adoption, moving toward the 100 billion yen AUM target, which will significantly increase the firm's presence in the unlisted equity space.
• The お金のまなびば! YouTube channel is expected to grow to 1 million to 2 million subscribers under the merged group, with SBI seeking to develop it as a financial entertainment service.
• Post-merger combined AUM of 10 trillion yen will establish the firm as a top 10 asset manager in Japan, with scale benefits driving improved influence and growth.
• Management expects upward pressure on share price from higher PER and potentially higher payout ratio post-merger, leading to attractive returns for shareholders.

• A potential bursting of the current AI bubble would negatively impact market levels and the firm's AUM and performance.
• The merger creates uncertainty around final dividend policy for the combined entity, though management expects it to trend toward higher payouts that benefit existing shareholders.
• Market volatility can impact AUM levels and therefore revenue and profit for the firm.
• The firm's AUM is dependent on overall equity market levels, so a broad market downturn would directly hurt financial performance.

Q: What is the firm's approach to portfolio companies that experience an accounting scandal like the current Nidec issue, and is Nidec still held in portfolios? / A: The firm had already reduced its holding in Nidec before the recent accounting issues became public, because red flags including a non-opinion from the auditor were already visible. Management says that while accounting fraud is never acceptable, it does not automatically mean immediate full sale of the position. Japanese fund managers should take responsibility for engaging with the company to push for reform, rather than just selling and exiting, though no formal fixed policy has been set yet. Each case will be evaluated on its own merits.

Q: Given the AI bubble appears overvalued on traditional metrics while the Tokyo Stock Exchange Growth 250 is deeply discounted from its highs, what is the recommended rebalancing approach for investors? / A: There is no way to predict how much more the AI bubble will grow: it could pop after two more "bubbles" or continue expanding to five, so the timing of a correction is impossible to predict. Currently it looks like two large bubbles have formed, so there is a good chance the rally has not yet finished, and could just be getting started. Warren Buffett holding 60 trillion yen in cash shows he is preparing for a potential correction, so referencing Buffett's positioning or buying Buffett-related stocks is a reasonable hedge. Selling overvalued large-cap AI stocks to buy discounted growth stocks is a valid strategy for investors that can accept time risk, echoing what many investors are already doing today.

Q: Could the allocation to Chinese stocks like Alibaba and Tencent increase in the ひふみワールド portfolio going forward? / A: It is possible that allocations to these Chinese companies will increase. With the recent political change, management expects the operating environment for Chinese firms to improve going forward, and will continue evaluating opportunities to increase exposure as conditions change.

Q: Will Fumino Fujino continue making public appearances and presenting after the merger? / A: Fujino says he is willing to present at merged firm events if asked by CEO Asakura, and has always enjoyed sharing straightforward views with investors. He expects to continue making public content through channels like the ひふみアカデミー YouTube channel even after the merger, though he will not lead formal quarterly earnings presentations.