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Nomura Group did the company perform as per Market expectation

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Nomura Group

Nomura Group is one of the leading Financial Services organizations operating across the world. Nomura was founded in 1925 in Japan and is a diversified Conglomerate with products and services in Banking, Financial Services, Financial Management, Consulting, Oil & Gas, Construction and Chemicals.

The company currently employs over 27000 employees and is headquartered in Tokyo, Japan. Nomura Holdings was in news in 2008 when it acquired majority of debt hit Lehmann Brothers Asian Operations together with its European equities and Investment banking units. As of March 2012, the company reported 18,51,760 Millions of Japanese Yen as revenue, a straight rise of over 33% y-o-y. The company’s net income has fallen significantly over 50% from the year 2011 and was reported at 11.6 billion Yen over 28.7 billion Yen the previous year.

Services Offered by Nomura Group

The Group is primarily divided into four main segments:

  • Retail
  • Wholesale
  • Asset Management
  • Global Research

1. Retail

Nomura delivers a broad range of financial services to its individual and corporate clients through its 173 branch offices (as of July 31, 2010), call centers, and online services. To offer appropriate and in-depth services tailored to each client’s needs, they provide consulting-based services at all their branch offices and have also established online and call center channels.

2. Wholesale

Nomura announced the formation of the Wholesale division, effective April 2010. This new division encompasses Global Markets, Investment Banking and other non-retail businesses in Japan, the Asia-Pacific, EMEA, and the Americas, which enables them to make faster decisions, deploy resources more efficiently and offer a broader array of solutions to corporate and institutional clients across the globe.

Further the wholesale segment is sub-divided into two different lines of business:

  • Global Markets deals with the solutions pertaining to the Fixed Income Securities, Equities and Asset Finance and
  • Investment Banking.

3. Asset Management

Nomura’s Asset Management division is engaged in the investment trust business for retail investors and the investment advisory business for institutional investors.

i) Their investment trust business offers a wide range of products that enables them to respond to the diversified needs of their customers through a broad array of distribution channels, including Nomura Securities and other brokerage houses, commercial banks, Japan Post Bank, and post offices throughout Japan.

ii) Through their investment advisory business, they provide advanced investment technologies and high-quality asset management services to a broad range of institutional investors, including domestic and overseas pension funds, government agencies and central banks, and financial institutions, including banks and insurance companies.

Company’s Financials

If we look at the company’s financial we see among its competitors, the company has performed well. However the company has underperformed, as per the expectation of the market. This is resulted in the company’s stock price which is less than the book value.

The selling and administrative expenses have increased heavily for the corporation which has led to slow to no growth in the income despite growth in revenue.

Valuation Measures

Market Cap (intraday):22.10B
Price/Sales (ttm):1.05
Price/Book (mrq):0.83
Enterprise Value/Revenue (ttm):-1.29

Fiscal Year

Fiscal Year Ends:Mar-30
Most Recent Quarter (mrq):Sep 30, 2012

Profitability

Profit Margin (ttm):2.66%
Operating Margin (ttm):45.14%

Income Statement

Revenue (ttm):21.28B
Qtrly Revenue Growth (yoy):33.20%
Gross Profit (ttm):18.66B
Net Income Avl to Common (ttm):566.78M
Diluted EPS (ttm):0.15

Balance Sheet

Total Cash (mrq):359.74B
Total Debt (mrq):310.07B
Total Debt/Equity (mrq):1,022.09
Current Ratio (mrq):1.41
Book Value Per Share (mrq):7.21

Cash Flow Statement

Operating Cash Flow (ttm):16.75B
Levered Free Cash Flow (ttm):N/A

Stock Price History

Beta:1.15
52-Week Change3:89.91%
S&P500 52-Week Change3:14.21%
52-Week High (Jan 2, 2013)3:6.14
52-Week Low (Jun 4, 2012)3:3.05

Share Statistics

Avg Vol (3 month)3:2,31,146
Avg Vol (10 day)3:7,06,233
Shares Outstanding5:3.69B

Dividends & Splits

Forward Annual Dividend Rate4:0.05
Forward Annual Dividend Yield4:0.70%
5 Year Average Dividend Yield4:2.50%
Payout Ratio4:17.00%

 

Competition Analysis

Direct Competitor Comparison

NomuraBank of America CorpDaiwa Securities Group
Market Cap:22.06B129.28B7.69B
Employees:3439527260014432
Revenue (ttm):21.28B80.66B5.51B
Operating Margin (ttm):0.450.180.22
Net Income (ttm):566.78M3.98B-452.01M
EPS (ttm):0.150.37-0.27
P/E (ttm):39.5432.42N/A

 

Global Research

Nomura’s global research offers investors a powerful combination of rigorous analysis and unique insights. Their researchers collaborate closely across regions and disciplines to track changes and spot future trends. The resulting value-added research is then quickly communicated to their clients to enable them to make informed investment decisions. In the past year, they significantly enhanced their research platform by adding key hires and further developing their research infrastructure. In line with the ongoing build out of their US operations, the group expanded their US fixed income research capabilities and are establishing a world-class equity research franchise in the United States. This growth will allow their global research team to provide their clients with broader, more in-depth analysis.

The global financial and economic environment continues to be challenging as regulatory tightening over financial institutions progresses and due to destabilizing factors such as the European sovereign-debt crisis. Although the market has been returning to stable growth since the beginning of 2012, complete recovery is expected to take considerable time.

PG

Niraj Satnalika

Niraj is an MBA in International Business (Finance). Prior to this he completed B.Tech in Electronics and Instrumentation. He is currently working with Confederation of Indian Industry (CII), Kolkata in capacity of Consultant. Satnalika is actively involved with an NGO and works towards promoting education among the underprivileged.

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