Core Insights - The research service "Asia Value & Moat Stocks" targets value investors looking for Asia-listed stocks with significant discrepancies between market price and intrinsic value, focusing on deep value balance sheet bargains and wide moat stocks [1][2] Group 1: Investment Focus - The service emphasizes purchasing assets at a discount, such as net cash stocks, net-nets, low price-to-book (P/B) stocks, and sum-of-the-parts discounts [1] - It also highlights the importance of acquiring earnings power at a discount in high-quality companies, including "Magic Formula" stocks and hidden champions [1] Group 2: Market Outlook - A previous update from May 27, 2025, suggested that an upward revision of the fiscal year 2025 outlook or achieving better-than-expected actual results for MFG is likely [1]

Financial Performance - Mizuho Financial Group raises its annual profit forecast [1] - Sumitomo Mitsui Financial Group's earnings exceeded expectations [1]

Financial Performance Highlights - Consolidated Net Business Profits decreased by 37% YoY, reaching JPY 3164 billion, impacted by Yen appreciation, but progress is at 24% vs FY25 Outlook of JPY 128 trillion[6, 9] - Profit Attributable to Owners of Parent increased by 04% YoY, totaling JPY 2905 billion, driven by net gains related to stocks and reversals in credit-related costs, with progress at 30% vs FY25 Outlook of JPY 094 trillion[6, 11] - TSE ROE increased by 12 percentage points due to profit growth and other factors, indicating improving capital efficiency[6, 12] Business Segment Performance - Customer Groups experienced strong interest income and fee business, contributing to largely flat YoY Consolidated Gross Profits, which decreased by 09%[7] - Retail & Business Banking Company (RBC) reported Profit Attributable to Owners of Parent of JPY 439 billion[18, 33] - Corporate & Investment Banking Company (CIBC) reported Profit Attributable to Owners of Parent of JPY 314 billion[18, 33] Balance Sheet and Asset Quality - Total Assets reached JPY 278 trillion, a decrease of 46%[19] - Loans in Japan showed a Loan and Deposit Rate Margin of 061%[21] - Loans outside Japan had a Loan and Deposit Rate Margin of 494%[24] - Non-performing Loans (NPL) Ratio stood at 073%[30] Non-Interest Income - Non-Interest Income reached JPY 3163 billion[27] - Global Corporate & Investment Banking Company (GCIBC) contributed JPY 1122 billion to Non-Interest Income[27] Future Outlook - The company revised its FY25 earnings outlook upward, anticipating further business growth, with a Consolidated Net Business Profits outlook of JPY 133 trillion and Profit Attributable to Owners of Parent outlook of JPY 800 billion[36]

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years. MFG currently has a forward P/E ratio of 10.80, while NU has a forward P/E of 23.07. We also note that MFG has a PEG ratio of 0.68. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio ...

Market Performance - The US stock market saw significant gains on July 23, with the Dow Jones Industrial Average rising by 507.85 points, or 1.14%, closing at 45010.29 points. The Nasdaq Composite increased by 127.33 points, or 0.61%, closing at 21020.02 points, marking its first close above the 21000-point threshold. The S&P 500 index rose by 49.29 points, or 0.78%, closing at 6358.91 points [1][3][4]. Trade Agreements - President Trump announced a trade agreement between the US and Japan, which has heightened market expectations for further trade agreements before the August 1 tariff deadline. The agreement includes a reduction of the reciprocal tariff rate from 25% to 15% and Japan's commitment to invest $550 billion in the US [2][6][7]. Sector Performance - In the S&P 500, nine out of eleven sectors experienced gains, with the healthcare and industrial sectors leading with increases of 2.03% and 1.75%, respectively. The utilities and consumer staples sectors saw declines of 0.79% and 0.07% [8]. - Major technology stocks mostly rose, with AMD increasing over 3%, and other companies like NVIDIA, Boeing, and TSMC rising over 2%. Financial stocks also saw gains, with Mizuho Financial up over 6% and UBS Group up over 3% [8]. Chinese Stocks - The Nasdaq Golden Dragon China Index rose by 0.75%, with notable increases in stocks such as iQIYI, which rose over 4%, and Tiger Brokers, which increased over 3%. However, some stocks like NIO and Li Auto saw declines of over 1% [9].

Core Viewpoint - Mizuho Bank has initiated a collaboration with SoftBank to develop a financial large language model, aiming to enhance financial services and customer interactions [1] Group 1 - The partnership between Mizuho Bank and SoftBank focuses on leveraging advanced AI technologies to improve financial operations and customer engagement [1] - The development of the financial large language model is expected to streamline processes and provide more personalized services to clients [1] - This collaboration reflects a growing trend in the financial industry towards integrating AI solutions to enhance efficiency and competitiveness [1]

Core Insights - Mizuho Bank plans to utilize artificial intelligence services developed by SoftBank and OpenAI [1] Company Strategy - The collaboration aims to enhance Mizuho Bank's operational efficiency and customer service through advanced AI technologies [1] Industry Implications - This initiative reflects a broader trend in the banking industry towards integrating AI solutions to improve service delivery and operational processes [1]

Group 1: Global Investor Sentiment - Global investor sentiment has reached its most optimistic level since February 2025, with the increase in profit optimism being the largest since July 2020 [1] - The proportion of cash in investment portfolios has dropped to 3.9%, typically indicating an overbought market and triggering a "sell signal" [1] - Investors have the highest overweight position in Eurozone assets since January 2005, despite viewing trade wars as the biggest potential systemic risk [1] Group 2: U.S. Debt and Fiscal Policy - Deutsche Bank forecasts that U.S. debt interest expenses will increase by approximately $100 billion this year, driven mainly by rising outstanding debt [2] - The passage of the "Inflation Reduction Act" has heightened concerns regarding U.S. fiscal health and debt sustainability [2] - The market expects the U.S. Treasury to rely more on short-term bonds to control interest costs in the short term [2] Group 3: Japanese Economic Policy - RBC indicates that the outcome of the Japanese Senate elections could lead to tax cuts and fiscal stimulus, potentially worsening fiscal conditions and delaying interest rate hikes by the Bank of Japan [3] - Japan's 20-year government bond yield has reached a new high of 2.657% since 1999, reflecting rising long-term financing cost pressures [3] Group 4: Asian Currency and Market Dynamics - Barclays notes that low yields on Asian currencies make them less attractive to yield-seeking investors, especially with potential increases in U.S. tariffs [3] - Discussions on de-dollarization are limited by insufficient liquidity and mature domestic markets in many Asian countries [3] Group 5: German Economic Outlook - The ZEW Institute reports that market sentiment is bolstered by hopes for a swift resolution to U.S.-EU tariff disputes and immediate investment stimulus plans from the German government [4] - Despite ongoing global trade conflicts, nearly two-thirds of experts predict an improvement in the German economy [5]

Core Viewpoint - Mizuho (MFG) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with near-term stock price movements [4][6]. - Rising earnings estimates for Mizuho suggest an improvement in the company's underlying business, likely leading to an increase in stock price [5]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) to Zacks Rank 5 (Strong Sell), and has a proven track record of performance [7]. - Stocks in the top 20% of Zacks-covered stocks, like Mizuho with its Zacks Rank 2, are positioned for potential market-beating returns [10]. Earnings Estimate Revisions for Mizuho - For the fiscal year ending March 2026, Mizuho is expected to earn $0.55 per share, which remains unchanged from the previous year, but the Zacks Consensus Estimate has increased by 12.2% over the past three months [8].

Core Insights - The article compares Mizuho (MFG) and Bank of Nova Scotia (BNS) to determine which stock is more attractive to value investors [1] Group 1: Zacks Rank and Earnings Outlook - Mizuho has a Zacks Rank of 2 (Buy), while Bank of Nova Scotia has a Zacks Rank of 3 (Hold), indicating a stronger earnings outlook for MFG [3] - The Zacks Rank focuses on companies with positive earnings estimate revisions, suggesting that MFG is likely experiencing a more favorable earnings outlook [3] Group 2: Valuation Metrics - MFG has a forward P/E ratio of 10.04, compared to BNS's forward P/E of 11.15, indicating that MFG may be undervalued relative to BNS [5] - MFG's PEG ratio is 0.63, while BNS's PEG ratio is 1.39, further suggesting that MFG has a better valuation considering expected earnings growth [5] - MFG's P/B ratio is 1, while BNS's P/B ratio is 1.28, reinforcing the notion that MFG is more attractively valued [6] Group 3: Overall Value Assessment - MFG earns a Value grade of B, while BNS receives a Value grade of C, indicating that MFG is currently the superior value option based on the analyzed metrics [6]