Daiwa Securities Group Inc

8601: XTKS (JPN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	¥‎6,369.25	Wgvkd	Vsvmyxn

Japan Securities Firms’ Earnings: We Lift Our Fair Value for Daiwa After Big Buyback Announcement

Michael Makdad

Nov 2, 2023

We are raising our fair value estimate for Daiwa Securities to JPY 800, or 0.76 times book value, from JPY 650, or 0.62 times book value, while maintaining our estimate for Nomura Holdings at JPY 590, or 0.54 times book value. Daiwa’s September-quarter ROE of 8.0% outperformed Nomura’s 4.3% and our estimate of around 6% for the sector average. Daiwa’s earnings were well-balanced among its retail, wholesale, and asset-management segments, in contrast to Nomura, which lagged in its global wholesale business even as it enjoyed strong retail-segment profits in Japan.

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