NH Investment & Securities H1 2025: Earnings Shock Analysis

The H1 2025 earnings report from NH Investment & Securities has presented a mixed picture. While revenue and operating profit showed growth, a sharp decline in net income delivered a significant blow to market expectations. These conflicting signals have created uncertainty for investors and complicate future investment strategies.

1. Unpacking the Earnings Shock

Several potential factors are being considered as key contributors to the sharp drop in net income:

  • • Significant One-off Expenses: Unexpected investment losses, increased provisions, or a surge in corporate tax expenses could have impacted net income.
  • • Losses in IB or Trading Divisions: Potential losses stemming from specific large-scale deals or market prediction errors cannot be ruled out.
  • • Deterioration of Asset Quality: The possibility of losses due to non-performing loans, including real estate project financing (PF), should also be considered.

2. Positive Factors and Growth Drivers

Despite the earnings shock, NH Investment & Securities still possesses positive attributes:

  • • Robust Performance in IB Division: The Investment Banking division continues to demonstrate strength, generating stable profits.
  • • Overseas Business Expansion: Expansion into international markets provides new avenues for growth.
  • • Accelerated Digital Transformation: Investments in digital transformation are strengthening the company’s future competitiveness.

3. Action Plan for Investors

Investors should be mindful of short-term price volatility and consider the following:

  • • Seek Additional Information: Further information regarding the specific causes of the net income decline should be sought.
  • • Maintain a Long-Term Perspective: Despite the current setback, consider the long-term growth potential of the company.
  • • Manage Risk: Prudent risk management is essential when making investment decisions.