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Daiwa Inc (JP:8601)
:8601

Daiwa (8601) AI Stock Analysis

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JP

Daiwa

(OTC:8601)

66Neutral
Daiwa Securities shows strong revenue growth and profitability, supported by a solid valuation. However, high leverage and negative cash flows pose financial risks. The technical indicators suggest a bearish trend, but the earnings call highlights resilience and growth potential, particularly in retail and overseas operations.

Daiwa (8601) vs. S&P 500 (SPY)

Daiwa Business Overview & Revenue Model

Company DescriptionDaiwa Securities Group Inc. (8601) is one of Japan's leading financial services companies, providing a wide range of investment and financial solutions. The company operates in various sectors including retail, wholesale, asset management, and investment banking. Its core services include securities brokerage, investment advisory, and underwriting, catering to both individuals and institutional clients globally.
How the Company Makes MoneyDaiwa Securities Group Inc. generates revenue through a diverse range of financial services. The company's primary revenue streams include brokerage commissions from executing client trades, underwriting fees from assisting companies in issuing new securities, and advisory fees for providing investment management and financial consulting services. Additionally, Daiwa earns interest income from its trading and lending activities. Strategic partnerships and collaborations with other financial institutions also play a significant role in enhancing its service offerings and expanding its market reach, thus contributing further to its earnings.

Daiwa Financial Statement Overview

Summary
Income Statement
Balance Sheet
Cash Flow
Breakdown
TTMMar 2024Mar 2023Mar 2022Mar 2021Mar 2020
Income StatementTotal Revenue
1.06T1.28T606.48B585.97B527.05B475.18B
Gross Profit
585.14B200.01B292.21B495.09B430.23B226.76B
EBIT
157.03B153.71B41.19B86.25B100.97B45.40B
EBITDA
102.42B204.16B0.000.000.000.00
Net Income Common Stockholders
164.01B121.56B63.88B94.89B108.40B60.35B
Balance SheetCash, Cash Equivalents and Short-Term Investments
4.31T4.40T3.87T4.59T4.76T3.96T
Total Assets
36.71T32.03T26.41T27.53T26.10T23.82T
Total Debt
3.33T5.17T12.98T14.98T13.20T11.49T
Net Debt
-980.29B-4.94T8.57T9.83T7.95T7.11T
Total Liabilities
34.79T30.24T24.74T25.89T24.51T22.56T
Stockholders Equity
1.64T1.53T1.42T1.38T1.34T1.22T
Cash FlowFree Cash Flow
0.00640.63B-264.99B-439.05B332.38B109.22B
Operating Cash Flow
0.00705.12B-183.75B-353.47B390.98B167.19B
Investing Cash Flow
0.00-223.99B7.46B-218.53B-91.64B-215.40B
Financing Cash Flow
0.00-2.85B-565.88B377.09B438.07B-135.79B

Daiwa Technical Analysis

Technical Analysis Sentiment
Positive
Last Price939.70
Price Trends
50DMA
965.60
Negative
100DMA
991.24
Negative
200DMA
1008.25
Negative
Market Momentum
MACD
-6.70
Negative
RSI
51.02
Neutral
STOCH
23.60
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 939.7 is above the 20-day moving average (MA) of 915.45, below the 50-day MA of 965.60, and below the 200-day MA of 1008.25, indicating a neutral trend. The MACD of -6.70 indicates Negative momentum. The RSI at 51.02 is Neutral, neither overbought nor oversold. The STOCH value of 23.60 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

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
72
Outperform
$2.43T7.429.88%6.29%13.94%109.60%
66
Neutral
¥1.29T8.689.63%5.72%7.08%28.63%
66
Neutral
$2.62T12.327.82%1.95%18.56%44.11%
64
Neutral
$12.73B9.827.91%17015.08%12.18%-5.69%
62
Neutral
$9.28T10.508.56%3.30%22.26%36.36%
61
Neutral
$20.81T11.079.70%3.43%21.88%-3.60%
42
Neutral
¥268.41B-4.60%3.81%1.12%6.36%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:8601
Daiwa
951.30
-79.13
-7.68%
JP:8604
Nomura Holdings
841.20
11.21
1.35%
JP:8306
Mitsubishi UFJ Financial Group
1,839.50
286.45
18.44%
JP:8308
Resona Holdings
1,162.50
212.44
22.36%
JP:8411
Mizuho Financial Group
3,698.00
729.57
24.58%
JP:8304
Aozora Bank
1,962.50
-365.97
-15.72%

Daiwa Earnings Call Summary

Earnings Call Date:Apr 28, 2025
(Q3-2024)
|
% Change Since: -0.39%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with strong performance in asset-based revenue, overseas operations, and the investment division, but faced challenges in global markets, profit reduction, and wholesale division performance. Despite these challenges, the company shows resilience and potential for growth, particularly in the Retail Division.
Q3-2024 Updates
Positive Updates
Record High Asset-Based Revenue in Retail Division
Daiwa Securities Group posted record high asset-based revenue in the Retail Division due to increased sales of equity investment trusts and a high level of wrap account contracts.
Positive Performance in Overseas Operations
Ordinary income from overseas operations was JPY 6.4 billion, up 67.1% from the previous quarter, driven by revenue growth in Europe and strong performance in the Americas.
Significant Increase in Investment Division Revenue
Net operating revenues in the Investment Division were JPY 8.3 billion, up 83.1%, with ordinary income up 12.8%.
Retail Division's Strong Start in January
In January, Retail Division's performance expanded significantly with an approximately 40% increase in income from equity transactions and investment trust sales compared to Q3.
Negative Updates
Decline in Global Markets Revenue
Global Markets saw a decline in net operating revenues by 8.6% and ordinary income by 44.4% due to lower customer flows and a decrease in trading of Japanese equities.
Decrease in Profit Attributable to Owners
Profit attributable to owners of the parent company was JPY 28.4 billion, down 4.5% from the previous quarter.
Challenges in Wholesale Division
The Wholesale Division reported a decrease in revenues from the debt underwriting business due to a rise in interest rates and a reduced number of long-term bond issuances.
Company Guidance
During the third quarter of fiscal year 2023, Daiwa Securities Group Inc. reported net operating revenues of JPY 147.8 billion, a 2.5% increase from the previous quarter, and ordinary income of JPY 40.8 billion, reflecting a marginal 0.1% rise. However, profit attributable to owners of the parent company decreased by 4.5% to JPY 28.4 billion, leading to an annualized ROE of 7.7%. The Retail Division saw a 1% increase in net operating revenues to JPY 49.8 billion, with ordinary income rising 4.6% to JPY 12.5 billion, driven by high wrap account contracts and investment trust sales. Meanwhile, the Wholesale Division experienced an 8.6% decline in net operating revenues, totaling JPY 33.7 billion, and a 44.4% drop in ordinary income to JPY 5 billion, attributed to reduced customer flows and interest rate hikes. The Asset Management Division reported a 3.3% increase in net operating revenues, reaching JPY 18.6 billion, and ordinary income rose by 0.8% to JPY 11.6 billion. The company noted strong performance in overseas operations, especially in the Americas and Europe, with a remarkable 67.1% increase in ordinary income to JPY 6.4 billion. The group continues to focus on improving its income structure's sustainability and diversity, with a strategic emphasis on wealth management and expanding its business portfolio. Looking ahead, Daiwa aims to achieve an ROE exceeding its 8% to 9% cost of capital by the end of the fiscal year and is optimistic about maintaining growth in its Retail and Wholesale Divisions under favorable market conditions.

Daiwa Corporate Events

Daiwa Securities Announces Increased Year-End Dividend for FY2024
Apr 28, 2025

Daiwa Securities Group Inc. announced a year-end dividend of 28 yen per share for the second half of FY2024, matching the first half’s dividend and resulting in an annual dividend of 56 yen per share. This decision reflects an increase from the previous fiscal year’s annual dividend of 44 yen per share, indicating a positive financial performance and potentially enhancing shareholder value.

Daiwa Securities Announces Share Repurchase Plan
Apr 28, 2025

Daiwa Securities Group Inc. has resolved to repurchase up to 50 million shares of its common stock, representing 3.53% of its total shares outstanding. This move, aimed at enhancing shareholder returns and improving capital efficiency, will involve a total expenditure of up to JPY 50 billion, with the repurchase period spanning from May 16, 2025, to March 24, 2026.

Daiwa Securities Reports Strong Financial Performance for FY 2024
Apr 28, 2025

Daiwa Securities Group reported a strong financial performance for the fiscal year ending March 31, 2025, with increases in operating revenue, net operating revenue, and ordinary income compared to the previous year. Despite a decrease in cash and cash equivalents, the company increased its dividends per share, reflecting a commitment to shareholder returns. The company does not provide earnings forecasts due to market volatility.

Daiwa Securities and Bank of Iwate Forge Strategic Alliance for Regional Financial Growth
Mar 24, 2025

Daiwa Securities Co. Ltd. and The Bank of Iwate, Ltd. have entered into a final agreement for a comprehensive business alliance aimed at building a new collaboration model. This alliance seeks to address the challenges of a declining and aging population in Iwate Prefecture by enhancing financial literacy and providing tailored wealth management services. The collaboration will integrate securities-related accounts and entrust financial intermediary services to Iwate Bank, aiming to enrich local customers’ lives and contribute to the regional economy.

Daiwa Securities to Announce Q4 Earnings Results on April 28
Mar 21, 2025

Daiwa Securities Group Inc. is set to announce its fourth-quarter earnings results for the fiscal year ending March 31, 2025, on April 28, 2025. The announcement, which will be followed by a live audio webcast, is expected to provide insights into the company’s financial performance and could impact its market positioning and stakeholder interests.

Daiwa Securities Launches Emerging Managers Program to Boost Asset Management
Feb 28, 2025

Daiwa Securities Group Inc. has launched an Emerging Managers Program (EMP) to support emerging investment managers by providing seed money and growth capital. The first project under this initiative is an investment in Marathon No.2 Investment Limited Partnership, managed by Marathon Capital Partners. This program aims to enhance the asset management business, offer new investment opportunities, and contribute to Japan’s development as an asset management nation.

Daiwa Securities Announces Executive Changes to Boost Global Operations
Feb 27, 2025

Daiwa Securities Group Inc. announced a series of executive appointments and promotions effective April 1, 2025, aimed at strengthening its leadership team and enhancing its global operations. These changes reflect the company’s strategic focus on expanding its asset management and sustainability efforts, as well as bolstering its presence in international markets, which could have implications for its competitive positioning and stakeholder engagement.

Daiwa Securities Group Expands Stake in Global X LLC to Boost Asset Management
Feb 25, 2025

Daiwa Securities Group Inc. has converted its convertible bonds in Global X Management Company, Inc. into units of Global X Management Company LLC, acquiring a 20% stake. This move aligns with Daiwa’s strategic goal to enhance its asset management business and strengthen its position in the ETF market, particularly in the United States, which is the largest ETF market globally. The acquisition is part of Daiwa’s broader strategy to maximize customer asset value and transform its business model, aiming for further expansion in asset management.

Daiwa Securities Wins Silver at ESG Finance Awards for Sustainable Initiatives
Feb 19, 2025

Daiwa Securities Co., Ltd., a subsidiary of Daiwa Securities Group Inc., has been awarded the Silver Prize in the financial services category of the 6th ESG Finance Awards Japan, for its dedication to sustainable finance and efforts to prevent greenwashing. This recognition, along with being selected as an Environmentally Sustainable Company and an Environmental Disclosure Progress Company, highlights Daiwa’s commitment to environmental sustainability and enhancing corporate value through its Vision 2030 strategy.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.