大和证券FY2026一季度收入和EPS超预期但已接近高位定价

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Introduction & Market Context
Daiwa Securities Group Inc. (TSE:8601) presented its first quarter fiscal year 2026 earnings results on August 3, 2026, reporting what the company called a "strong start to the final year of the mid-term management plan." The presentation revealed broad-based growth across all business segments, with ordinary income more than doubling year-over-year and the company’s key stability metric—base income—reaching ¥62.8 billion, well ahead of its full-year target.
The results exceeded analyst expectations significantly, with earnings per share of ¥40.68 beating forecasts by 26.8% and revenue of ¥434.4 billion surpassing estimates by 134%. Following the announcement, shares edged up 0.28% to $1,812, trading near the top of the 52-week range of $1,036 to $1,886.50.
Quarterly Performance Highlights
The presentation slides detailed impressive year-over-year growth metrics for the first quarter ended June 30, 2026. Net operating revenues reached ¥220.3 billion, up 42.0% from the prior year period and 11.4% sequentially. Ordinary income surged 101.5% year-over-year to ¥88.0 billion, while profit attributable to owners of the parent increased 80.6% to ¥56.4 billion.
As illustrated in the following consolidated earnings comparison, all three key financial metrics showed substantial improvement from both the prior year and prior quarter periods:
Return on equity climbed to 12.7% on an annualized basis, up from 7.7% in the first quarter of fiscal 2025 and 11.5% in the fourth quarter of fiscal 2025. The company attributed the performance to "strong corporate and investor activity despite market uncertainty."
The quarterly trend data presented in the slides shows consistent improvement across the business. The following charts illustrate the progression of net operating revenues, ordinary income, and profit attributable to owners across recent quarters:
Total commission received increased 42.9% year-over-year to ¥143.4 billion, with brokerage commissions up 65.3%, underwriting and secondary offering commissions up 91.8%, and distribution commissions up 94.8%. Selling, general and administrative expenses rose at a more modest 20.0% to ¥142.9 billion, contributing to the strong margin expansion.
Building a Resilient Earnings Base
A central theme of the presentation was Daiwa’s progress toward building more stable, recurring earnings. The company’s base income—defined as the sum of ordinary income from the Wealth Management Division, Securities Asset Management, and Real Estate Asset Management—reached ¥62.8 billion in the first quarter, up 83.8% year-over-year and 15.5% sequentially.
This quarterly result puts the company well ahead of its medium-term management plan target of ¥150 billion for the full fiscal year. Management emphasized they are "building an earnings base that is less susceptible to external conditions."
The following charts demonstrate both the annual progression and quarterly trends in consolidated ordinary income and base income, showing the growing contribution of stable revenue sources:
Asset-based revenues, a key component of stable earnings, reached a record high of ¥35.8 billion with a fixed cost coverage ratio of 125.7%. This means recurring asset-based fees alone now cover more than the company’s entire fixed cost base, providing significant earnings stability.
Wealth Management Division Performance
The Wealth Management Division delivered ordinary income of ¥37.2 billion, up 88.9% year-over-year, with net operating revenues of ¥88.2 billion. The presentation highlighted that asset-based revenue reached record highs, driven by continued net inflows from both individual and corporate clients.
The division’s revenue composition by product shows balanced growth across multiple categories, as illustrated in the following breakdown:
Wrap account services saw particularly strong performance, with contract amounts of ¥357.7 billion and net inflows of ¥237.6 billion. Total wrap account assets under management reached a record ¥6.76 trillion. Equity investment trust sales totaled ¥582.2 billion with net inflows of ¥115.7 billion.
Net asset inflows continued their strong trend, as shown in the following visualization of corporate and individual client flows:
Daiwa Next Bank, the division’s banking subsidiary, contributed ¥7.3 billion in ordinary income, up 66.7% year-over-year. Deposits grew to ¥5.3 trillion, with higher policy rates expanding net interest margins and supporting revenue growth.
Asset Management Delivers Record Results
The Asset Management Division posted record ordinary income of ¥30.3 billion, up 105.5% year-over-year, with net operating revenues of ¥40.9 billion. All three sub-segments—Securities AM, Real Estate AM, and Alternative AM—contributed to the growth.
Securities Asset Management achieved record highs in both assets under management and ordinary income of ¥15.7 billion. Daiwa Asset Management’s public investment trust AUM surpassed ¥43 trillion for the first time, driven by net inflows of ¥422.4 billion in publicly offered equity investment trusts (excluding ETFs). The alliance with Japan Post Insurance also contributed to expansion in investment advisory assets.
The growth trajectory of Daiwa Asset Management’s assets under management is illustrated in the following chart:
Real Estate Asset Management exceeded its fiscal 2030 target early, with AUM reaching ¥1.8 trillion. Net operating revenues increased 37.9% to ¥13.3 billion, while ordinary income rose 41.8% to ¥9.8 billion. The presentation noted that gains on property sales at Daiwa Securities Realty and profits from managed REITs supported the strong performance.
Alternative Asset Management recorded ordinary income of ¥4.8 billion, a significant turnaround from the prior year, driven by capital gains from exits of certain investments.
Global Markets & Investment Banking Surge
The Global Markets & Investment Banking Division delivered the strongest year-over-year growth, with ordinary income of ¥22.7 billion, up 354.0% from the prior year period. Net operating revenues reached ¥76.5 billion, up 53.6%.
Within Global Markets, equity revenue increased significantly, supported by expanding client flows and active equity markets. The presentation noted "strong client flows from institutional investors and wealth management clients in Japanese and foreign equities" along with "high earnings contributed by elevated market volatility and successful position management."
FICC (Fixed Income, Currency and Commodities) revenues remained solid despite some moderation in client flows for domestic and foreign bonds. Derivatives client flows remained high, and overseas operations benefited from stabilizing market conditions.
Global Investment Banking earnings increased to ¥3.3 billion, driven by contributions from multiple large-scale deals. Notable transactions included JX Advanced Metals Corporation’s ¥250 billion Euro Yen convertible bond, Japan Airlines’ ¥200 billion bond-type class shares offering, and SoftBank Group’s ¥418 billion subordinated bond. However, M&A-related commissions declined 27.9% quarter-over-quarter to ¥12.5 billion.
Record Overseas Operations
Overseas businesses posted record high ordinary income of ¥13.1 billion, up 244.7% year-over-year and 90.0% sequentially. The regional breakdown showed divergent performance:
Asia and Oceania reached a record high ordinary income of ¥4.7 billion, up 90.9% year-over-year, supported by strong equity revenues. The Americas region delivered ¥8.9 billion, up 167.2%, driven by higher equity revenues. Europe, however, posted a loss of ¥409 million due to weak M&A performance attributed to geopolitical risks.
Financial Position and Capital Management
The company’s balance sheet remained strong with total assets of ¥39.9 trillion and net assets of ¥2.1 trillion as of June 30, 2026. Shareholders’ equity increased ¥33.2 billion from March 31, 2026, to ¥1.8 trillion. Management highlighted that 80.2% of total assets have high liquidity.
Regulatory capital ratios remained well above requirements, as shown in the following capital adequacy and liquidity metrics:
The consolidated common equity tier 1 capital ratio stood at 17.73%, with a total capital ratio of 20.06% and a leverage ratio of 5.10%. The consolidated liquidity coverage ratio was 133.6%, well above the 100% regulatory minimum.
Strategic Developments
The presentation announced the completion of ORIX Bank’s acquisition as a fully consolidated subsidiary on August 3, 2026. Earnings consolidation will begin in the second quarter. Management described this as an important step in the wealth management growth strategy, though specific financial impacts were not detailed in the slides.
The company also emphasized its shift toward "total asset consulting" that goes beyond product sales to identify customer needs across investment management, asset succession, real estate, and corporate transactions.
Outlook and Management Commentary
While the presentation did not provide specific numerical guidance for future quarters, management commentary suggested confidence in maintaining momentum. The company stated it is "progressing at a pace that significantly exceeds the final year target of ¥150 billion set in the Medium-Term Management Plan" for base income.
For individual divisions, the presentation indicated that wealth management is expected to continue at roughly the first quarter pace, asset management should continue benefiting from accumulated assets, and real estate asset management is expected to keep building on its earlier-than-expected progress toward the fiscal 2030 target. Global markets may run below the strong first quarter average, though client flows remain solid.
Management acknowledged that "uncertainty remains in the market" and noted some divisions started the new period below the strong first quarter average. Personnel expenses rose due to higher wages and performance-linked bonus increases, primarily in Japan, while trading-related costs also increased with higher business volumes.
The presentation emphasized that Daiwa is building "an earnings base that is less susceptible to external conditions" through its focus on asset-based revenues and stable fee income. With the first quarter base income already representing more than 40% of the full-year target, the company appears well-positioned to exceed its medium-term plan objectives in this final year of execution.
Full presentation:
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