(Bloomberg) -- One Japanese financial firm is riding the crypto wave like no other.

Shares of Monex Group Inc. have been tracking the ups and downs of Bitcoin, and have more than tripled since the cryptocurrency’s rally gained momentum in October. The online brokerage owns crypto exchange Coincheck Inc., whose profit has soared as clients flock to digital assets.

“People are starting to re-evaluate us” by realizing Monex isn’t just about stockbroking, said Chief Executive Officer Oki Matsumoto. “Our stock was underrated to begin with,” the former Goldman Sachs Group Inc. partner said in an interview on Feb. 18.

Investors have been pushing up shares of firms closely linked to digital tokens around the world, from U.S. crypto miner Marathon Patent Group Inc. to the U.K.’s On-Line Blockchain Plc. Bitcoin’s fivefold jump in the past year has come amid a flood of money pumped into the global financial system during the coronavirus pandemic.

Even after a pullback during a sell-off in Bitcoin in recent days, Monex is the most expensive stock on an index of Japanese securities companies, with a price of more than three times the book value of its assets.

The stock fell 6.4% at 10:36 a.m. in Tokyo on Wednesday, paring this year’s gain to 136% -- still the second-best performance on the benchmark Topix.

“There has been sharp growth in earnings at Coincheck,” SMBC Nikko analyst Takayuki Hara wrote in a Feb. 22 note, raising his target price for Monex shares. “The soaring price of Bitcoin has spurred trading activity and encouraged more individual investors to jump into the fray.”

Monex has been diversifying into crypto as intensifying competition dims prospects of its mainstay stock brokerage business. It bought Coincheck in 2018, when the exchange was regrouping after a costly hack. It received a license two years ago.

Crypto business, domestic brokerage services and U.S. trading operations now represent Monex’s “three main pillars” of growth, Matsumoto said.

Its crypto asset segment earned 2.4 billion yen ($23 million) in pretax profit in the quarter ended Dec. 31, reversing year-earlier losses and accounting for half of total group income, according to filings.

What Bloomberg Intelligence Says:

Share gains by Monex and Remixpoint top those of SBI, GMO Financial and other Japan bitcoin stocks year-to-date partly due to strong performances by the Coincheck and BITPoint bourses. But competition is becoming fiercer: online broker SBI offers a broader range of crypto services, and more global exchanges may seek inroads into Japan.

Francis Chan, senior BI analyst

While Matsumoto, 57, said it’s hard to assess the sustainability of Coincheck’s earnings growth, the unit is unlikely to post losses even in a calm market because of cost cuts and other steps taken in recent years.

“If they become able to secure a good volume of orders from clients even when crypto trading becomes sluggish overall, we can see it as evidence of revenue diversification,” said Kengo Sakaguchi, an analyst at Japan Credit Rating Agency. He rates Monex as BBB, two levels above junk.

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