Daiwa (8601) AI Stock Analysis

• Market Cap: ¥1.84T
• Dividend Yield: 4.19%
• Average Volume (3M): 5.10M
• Price to Earnings (P/E): 12.5
• Beta (1Y): 1.45
• Revenue Growth: -0.87%
• EPS Growth: 6.88%
• Country: JP
• Employees: 14,600
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Capital Markets
• EPS (TTM): 34.24
• Shares Outstanding: 1,569,378,800
• 10 Day Avg. Volume: 5,656,200
• 30 Day Avg. Volume: 5,101,593
• PEG Ratio: 0.31
• Price to Book (P/B): 0.85
• Price to Sales (P/S): 1.02
• P/FCF Ratio: -2.25
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: ¥1,468.00 ▲(7.78% Upside)

Daiwa's stock is supported by strong technical momentum and a reasonable valuation, making it attractive for growth and income-focused investors. However, financial risks due to high leverage and negative cash flow need to be monitored closely.

Positive Factors

Revenue Growth

Significant revenue growth indicates strong market demand and effective business strategies, supporting long-term expansion and competitiveness.

Profitability

Improved net profit margin reflects effective cost management and operational efficiency, contributing to sustainable financial health.

Return on Equity

Higher return on equity indicates better utilization of shareholder funds, enhancing investor confidence and long-term value creation.

Negative Factors

High Leverage

High leverage can increase financial risk, especially in volatile markets, potentially impacting the company's ability to finance future growth.

Negative Cash Flow

Negative cash flow suggests challenges in maintaining liquidity, which could hinder the company's ability to invest in growth opportunities.

Equity Ratio

A low equity ratio suggests vulnerability to financial instability, as the company relies heavily on debt financing, which could be risky in downturns.

Daiwa Business Overview & Revenue Model

Company Description

Daiwa Securities Group Inc. (8601) is a leading financial services firm based in Japan, primarily involved in securities, investment, and asset management. The company operates through various segments, including retail and institutional brokerage, investment banking, and asset management services. Daiwa provides a wide range of financial products and services, including equities, fixed income, derivatives, and investment advisory, catering to both individual and corporate clients.

How the Company Makes Money

Daiwa generates revenue through multiple key streams. The primary revenue source is brokerage commissions from trading activities conducted on behalf of clients, both individual and institutional. Additionally, the firm earns fees from asset management services and investment advisory, where it manages investment portfolios for clients and provides strategic advice. The investment banking segment contributes to revenue through underwriting fees and advisory fees related to mergers and acquisitions. Furthermore, Daiwa benefits from proprietary trading and interest income from its financing activities. Strategic partnerships with various financial institutions and technology firms also enhance its service offerings and can lead to additional revenue opportunities.

Daiwa Financial Statement Overview

Summary

Daiwa exhibits strong revenue growth and improved profitability, which are positive signs of business expansion. However, high leverage and negative cash flow reflect potential financial risk. While the company is on a growth trajectory, it must carefully manage its debt and improve cash flow to sustain long-term financial health.

Income Statement

Daiwa has shown substantial revenue growth over the past year, increasing from 773 billion to 1.37 trillion yen, representing a significant growth trajectory. The gross profit margin improved to 52.8%, indicating efficient cost management. The net profit margin also increased to 11.2%, showcasing enhanced profitability. However, the EBIT margin decreased slightly, suggesting potential pressure on operating efficiency.

Balance Sheet

The debt-to-equity ratio is notably high, reflecting considerable leverage which poses a risk if not managed well. However, the return on equity has improved to 9.4%, signifying improved profitability for shareholders. The equity ratio remains low at 4.6%, indicating heavy reliance on debt to finance assets, which could be a concern if market conditions worsen.

Cash Flow

The free cash flow has turned negative, indicating potential liquidity issues. The operating cash flow to net income ratio is negative due to significant outflows, suggesting cash management challenges. However, the company has managed its investing and financing activities to support strategic initiatives.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	689.97B	1.39T	1.30T	876.88B	632.52B	582.16B
Gross Profit	699.68B	780.06B	773.02B	606.48B	585.97B	527.05B
EBITDA	159.50B	264.85B	227.15B	142.54B	187.82B	186.90B
Net Income	107.82B	154.37B	121.56B	63.88B	94.89B	108.40B
Balance Sheet
Total Assets	34.62T	36.02T	32.03T	26.41T	27.53T	26.10T
Cash, Cash Equivalents and Short-Term Investments	19.29T	20.72T	4.96T	3.87T	4.59T	4.76T
Total Debt	3.17T	5.39T	5.17T	5.05T	5.52T	5.04T
Total Liabilities	32.72T	34.10T	30.24T	24.74T	25.89T	24.51T
Stockholders Equity	1.62T	1.65T	1.53T	1.42T	1.38T	1.34T
Cash Flow
Free Cash Flow	-622.91B	-622.91B	640.63B	-264.99B	-439.05B	332.38B
Operating Cash Flow	-576.09B	-576.09B	705.12B	-183.75B	-353.47B	390.98B
Investing Cash Flow	-353.44B	-353.44B	-223.99B	7.46B	-218.53B	-91.64B
Financing Cash Flow	199.02B	199.02B	-2.85B	-565.88B	377.09B	438.07B

Daiwa Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1362.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:8601, the sentiment is Positive. The current price of 1362 is above the 20-day moving average (MA) of 1329.05, above the 50-day MA of 1256.24, and above the 200-day MA of 1074.11, indicating a bullish trend. The MACD of 27.98 indicates Positive momentum. The RSI at 61.90 is Neutral, neither overbought nor oversold. The STOCH value of 54.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:8601.

Daiwa Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8707	81 Outperform	¥74.46B	9.27	―	5.84%	10.85%	30.77%
8609	78 Outperform	¥160.66B	13.44	―	4.13%	-2.39%	-4.54%
8601	76 Outperform	¥1.84T	12.48	9.37%	4.19%	-0.87%	6.88%
8604	76 Outperform	¥3.81T	10.72	10.65%	3.93%	-2.45%	35.60%
8628	69 Neutral	¥212.33B	19.75	14.00%	5.13%	3.27%	-1.81%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
8698	43 Neutral	¥181.53B	-42.35	-3.97%	4.32%	14.69%	-114.36%

Daiwa Corporate Events

Daiwa Securities Reports 2Q FY2025 Financial Results

Daiwa Securities Group Inc. announced its financial results for the second quarter of FY2025, highlighting its performance in various segments including wealth management and global markets. The announcement provides insights into the company’s financial management and operations, indicating a strategic focus on asset-based revenues and overseas operations, which may impact its market positioning and stakeholder interests.

Daiwa Securities Announces Increased Interim Dividend for FY2025

Daiwa Securities Group Inc. announced an interim dividend of 29 yen per share for the first half of FY2025, with payments commencing on December 3, 2025. This decision reflects a slight increase from the previous year’s interim dividend, indicating a positive financial performance and commitment to shareholder returns.

Daiwa Securities Group Reports Stable Financial Performance Amid Market Challenges

Daiwa Securities Group reported a slight increase in its consolidated operating revenue for the first half of fiscal year 2025, with a 1.7% rise from the previous year. Despite challenges in the market environment, the company maintained a stable profit attributable to owners of the parent, reflecting a strategic focus on maintaining dividend payouts and financial stability.

Daiwa Securities Reports on Capital Adequacy and Leverage Ratios

Daiwa Securities Group Inc. has released its report on the consolidated capital adequacy ratio and leverage ratio as of June 30, 2025, in compliance with the Financial Instruments and Exchange Act. This report highlights the company’s soundness in management, indicating a stable financial position and adherence to regulatory requirements, which is crucial for maintaining investor confidence and supporting its strategic objectives.

Daiwa Securities Completes Share Repurchase Program

Daiwa Securities Group Inc. has completed a share repurchase program, initially resolved by its Board of Directors in April 2025, acquiring 46,596,600 shares for approximately JPY 50 billion. This strategic move could impact the company’s stock market performance and shareholder value, potentially enhancing its market positioning.

Daiwa Securities Announces Progress in Share Repurchase Program

Daiwa Securities Group Inc. has announced the status of its share repurchase program, which was initially resolved by the Board of Directors in April 2025. During the period from September 1 to September 30, 2025, the company repurchased 5,324,300 shares of common stock for approximately JPY 6.23 billion. This move is part of a larger plan to repurchase up to 50 million shares by March 2026, with the aim of enhancing shareholder value and optimizing capital structure.