Japanese stock report - Daiwa Securities Group


Daiwa Securities increases, lifts 3.0% for week January 19, 2018 15:00 JST


Daiwa Securities Group Inc. (TO:8601), the 2nd largest Securities & commodity futures company by market cap in Japan, has increased JPY7.10 (0.9%) from its last trading session of January 18 to close at JPY787.10. Compared with the Nikkei 225 Index which rose 73.5 points (0.3%) in the day, the relative price increase was 0.6%. The volume was 0.8 times the average daily trading volume of 8.2 million shares. The stock lifted 3.0% in the past week.

Highlights in today's Report:


Fundamentals, Undervaluation [compared with sector average], Technicals, High Performance Indicators


Fundamentals, Overvaluation [compared with sector average], Technicals, Overbought/Bearish/Resistance Signals, Low Performance Indicators


Momentum, Moving Annual Return, Beta, Turnover Rate & Turnover Period


Global, Independent Ratings


Financials Summary, Trailing 12 Months Dividends


Activities, Top Management, Issued Capital



1.1 Fundamentals:

+ The P/E of 12.5 multiplied by the P/NTA of 1.1 is 14.3. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.

+ The relative yield of the stock, defined by its yield of 3.3%, divided by average yield of dividend yielding stocks in the Nikkei 225 Index of 2.2% is 150.0%. This suggests the stock is undervalued in dividend yield terms.

+ Net profit margin has averaged 23.4% in the last 3 years. This is considered superior and suggests a high margin of safety.

1.2 Undervaluation [compared with sector average]:

+ Dividend yield of 3.3% [2.3%].

+ Price to EBITDA of 5.1 [5.8].

1.3 Technicals:

+ The price lifted 3.0% in the last week and jumped 9.9% in the last month.

+ Compared with the Nikkei 225 Index which rose 0.8% for the week and 4.2% for the month, this represented a relative price increase for Daiwa Securities stock of 2.4% for the week and 5.8% for the month.

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 761.49 minus the 26-day EMA of 739.59 is positive 21.91 suggesting a bullish signal. Both EMA prices are rising, another bullish signal.

+ Rises to Falls: in the past month the number of rises outnumbered falls 13:6 or 2.2:1.

+ The stock's relative price strength percentile is rising at 63 for 6 months, 73 for 3 months and 81 for 1 month.

+ The present value of JPY1,000 (PV1000) invested one year ago in Daiwa Securities is JPY1,152, comprising a capital gain of JPY107 and dividend reinvested of JPY45.

Nikkei 225 Index1,0081,0451,248

+ The present value of JPY1,000 (PV1000) invested twenty years ago in Daiwa Securities is JPY2,559, including a capital gain of JPY1,135 and dividend reinvested of JPY424.

+ 20 years Multiplier in JPY = 2.559x

+ Compound Annual Growth Rate (CAGR) in JPY = 4.8%

Present Value of USD1,000 invested 20 years ago:

+ The present value of USD1,000 (PV1000) invested twenty years ago in Daiwa Securities is $US2,959, including a capital gain of $US1,469 and dividend reinvested of $US490.

+ 20 years ago USD 1 equalled JPY 128.2051

+ 20 years Multiplier in USD = 2.959x

+ Compound Annual Growth Rate (CAGR) in USD = 5.6%

Jan 19, 2018: USD 1 equals JPY 110.88

1.4 High Performance Indicators:

DescriptionValueRank In Market
EBITDA Margin %42.4In Top 4%
Today's TurnoverJPY4.9 billion (US$44 million)In Top 4%
% Prem to Vol Wtd Price5.9In Top Quartile
Price/MAP501.1In Top Quartile


2.1 Fundamentals:

+ Total Liabilities/EBITDA of 70.8 which compares unfavourably with the Joseph Piotroski benchmark of 5.

+ As per the Du Pont analysis, Return on Equity of 8.3% is lower than sector average of 8.6%. This is computed as net profit margin of 16.9% times asset turnover [sales/assets] of 0.03 times leverage factor [total assets/shareholders' equity] of 15.7.

+ Revenue growth and EBITDA growth have shown signs of deterioration in recent years. [Year ended, all figures in %]

YearRevenue GrowthEBITDA Growth
Mar 17-5.7-7.8
Mar 1645.918,463.6

2.2 Overvaluation [compared with sector average]:

+ Return on Assets 0.5% [0.7%].

+ Return on Capital Employed 6.2% [7.3%].

2.3 Technicals:

+ The 0.6% discount to 12-month high of JPY792.0 against the 35.3% premium to 12-month low of JPY581.83 suggests the climb might be peaking.

2.4 Overbought/Bearish/Resistance Signals:

+ The Relative Strength Index (RSI) of 90.2 has penetrated the overbought line of 70, suggesting the price gain of 11.4% in the last 14 days is unusually high.

+ The stock is overbought according to the Williams % R indicator of -5.3, suggesting the price is close to its 14-day high of JPY792.0.

+ The Money Flow Index [MFI] is 88.8 suggesting an overbought 14-day trend, being above 80. The Money Ratio of 7.9 suggests positive money flow was 7.9 times negative money flow.

2.5 Low Performance Indicators:

DescriptionValueRank In Market
Total Debt to Equity7.6In Bottom 1%
Return on Assets [ROA] %0.5In Bottom 5%
Price to Sales2In Bottom Quartile


3.1 Momentum:

+ Volume: there were 6,200,000 shares worth JPY4.9 billion (US$44 million) traded today. In the past week, volume was 0.9 times average and the shares were up 3.0%. The volume was 0.8 times the average daily trading volume of 8.2 million shares.

3.2 Moving Annual Return

Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 3 of the last 5 years. An investment a year ago in 8601 would have produced a return of 14.3%.

8601Close (JPY)Dividends (JPY)Capital Gain / (Loss) %% YieldAnnual Return %
Jan 19787.12610.73.714.3
1 Yr ago711.09137.429.3
2 Yrs ago662.2833(21.1)3.9(17.2)
3 Yrs ago839.431(14.0)3.2(10.9)
4 Yrs ago976.4829129.56.8136.3

Close 5 years ago JPY425.45

3.3 Beta:

+ Beta: the Beta of Daiwa Securities stock is 1.2. A Beta greater than 1 suggests this is a high risk, high return stock with volatility greater than that of the market.

3.4 Turnover Rate & Turnover Period:

+ The turnover rate in the 12 months to date was 103.1% (or a turnover period of 11 months). This average length of ownership of the stock at 0.8 times the average holding period of 1 year 2 months for stocks in the Nikkei 225 Index suggests a larger number of speculators on the share register, making it less safe for long-term investors.


4.1 Global Rank [out of 47,418 stocks] and Rank in the Asia Region [out of 22,530 stocks]

DescriptionValueGlobal RankIn Asia Region
MCap (US$)12.1B1,356421
Total Assets (US$)178.5B36078
Revenue (US$)5.6B2,114729
Net Profit (US$)937M1,077296
Return on Equity %8.315,9528,660
Net Profit Margin %16.96,8973,093
Price to Book1.111,9276,722
Yield %3.37,4752,819
PV$1000 (1Year) US$*1,17319,3409,448
US$* Change (1Year) %12.620,35710,035

* 1 year ago USD 1 = JPY 113.39

Jan 19, 2018: USD 1 equals JPY 110.88

4.2 Independent Ratings

+ Brand Finance 500:

Daiwa Securities Group Inc. was ranked 132 in the Brand Finance list of the world's 500 Valuable Banking brands by brand value in 2015; a deterioration over a year from rank 131 in 2014. Brand Finance valued the brand at US$1,309 million.

+ Forbes 2000:

It is the 1285th largest by revenue in the Forbes Global 2000.

+ BSS/News Bites:

It is placed 2517/3463 in BSS News Bites' ranking of Japan performers in the past year, a percentile ranking of 28.

+ Vanguard Total World Stock ETF 7457:

The stock was one of 7457 global stocks selected by Vanguard Total World Stock ETF (VT). As at November 30, 2017, the Vanguard Total World Stock ETF held 439,000 shares worth $US2,761,981 or 0.02% by value of the ETF's portfolio [Ranked 904 out of 7457 by value and 95 out of 1285 for Japan].


5.1 Financials Summary

Year endedMar 2017Mar 2016Mar 2015
Sales (USD B)
Pretax (USD B)
Net (USD)935.6M1.1B1.4B
EPS (JPY)-67.663786.7246

Sales was down 5.7% from US$5.9 billion in 2016 to US$5.5 billion in 2017. Net profit was down 10.9% from US$1.1 billion in 2016 to US$935.6 million in 2017.

5.2 Trailing 12 Months Dividends

Trailing 12 Months ToValue (JPY)
19 Jan 201826
19 Jan 201713
19 Jan 201633
19 Jan 201531
19 Jan 201429


6.1 Activities

Daiwa Securities Group Inc. is a Japan-based security company engaged in the securities, investment, financing and service businesses. The Company, comprised of 46 consolidated subsidiaries and six associated companies, is engaged in the trading and brokerage of securities and derivatives, as well as the the underwriting, sale, offering and private offering of securities. It is also involved in the investment trust, information service, real estate leasing, venture capital, financing and clerical service businesses. The Company has operations in both domestic and overseas financial markets, including Japan, North America, Europe, Asia and Oceania. Daiwa Securities Group has a global network.

6.2 Top Management

The chairman is Takashi Hibino, the chief executive officer is Seiji Nakata and the chief financial officer is Mikita Komatsu.

6.3 Issued Capital

Based on 1,700,000,000 issued shares the market capitalisation is JPY1,338.1 billion (US$12.1 billion).


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January 05: Daiwa Securities: [Updated]Status of Share Repurchase


This is the correction notice of the "Status of Share Repurchase" dated January 4, 2018. Correction is as follows.

(Before Correction)

2. Total number of shares repurchased and total amount paid for repurchase as of November 30, 2017, pursuant to the Board of Directors' resolution above. (After Correction)

January 04: Daiwa Securities: Status of Share Repurchase


This document is an unofficial translation of a press release announced on January 4, 2018 by Daiwa Securities Group Inc. The original press release is in Japanese.

Daiwa Securities Group Inc. announces the status of share repurchase, as outlined below. The share repurchase was resolved by the meeting of Board of Directors on October 25, 2017 under the provisions of the Articles of Incorporation pursuant to Article 459, Paragraph 1 of the Companies Act of Japan.

November 02 2017: Daiwa Securities: Artificial Intelligence (AI) Prediction of Trading Volume on the Tokyo Stock Exchange for Algorithmic Trading

Daiwa Securities Co. Ltd. (Daiwa) has entered into an agreement with Cogent Labs (Cogent) for use of novel artificial intelligence (AI) technology in Daiwa's algorithmic trading platform. The technology was co-developed by Cogent in collaboration with Daiwa Securities, and gives Daiwa's trading algorithms access to real-time predictive capabilities utilizing deep learning.

Daiwa Securities has been actively engaged in a firm-wide effort to develop and deploy AI technologies in order to better assist our clients in their investment decision-making processes.

October 26 2017: Daiwa Securities announces dividend

Daiwa Securities today announced an interim dividend of JPY13.0 per share. The ex dividend date is Wednesday, September 27, 2017 and the record date is Saturday, September 30, 2017 and it is payable on Friday, December 01.

October 25 2017: Daiwa Securities: Report Regarding Situation of Soundness in Management as of June 30, 2017

In accordance with the Financial Instruments and the Exchange Act Article 57-17, 'Notification, etc., of Documents Describing Status of Soundnessin Management,' Daiwa Securities Group Inc. reports situation ofsoundnessin management as ofJune 30, 2017.

Contact: 81 35 55 51 11 1

Physical Address: 1-9-1 Marunouchi Chiyoda-ku Tokyo, 100-6751 Japan

State/Province/Country: TKY, Japan

Country of Incorporation: Japan

Exchange: Tokyo Stock Exchange

ISIN: JP3502200003

TO:8601; TYO:8601; T:8601; JP:8601; 8601.T

Daiwa Securities Group Inc

Source: www.BuySellSignals.com