Operating Margin - Nomura Real Estate Holdings Inc (TSE:3231)

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Price: 995.4 JPY 2.89%

Market Cap: 913.7B JPY

13.9%

Current

15%

Average

25.7%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

13.9%

Operating Profit

107.8B

Revenue

774B

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
JP		Nomura Real Estate Holdings Inc TSE:3231	853.5B JPY	14%
VN	V	Vingroup JSC VN:VIC	1 333.9T VND	-1%
HK		Sun Hung Kai Properties Ltd HKEX:16	289.8B HKD	32%
JP		Mitsui Fudosan Co Ltd TSE:8801	5.1T JPY	15%
JP		Mitsubishi Estate Co Ltd TSE:8802	4.9T JPY	19%
JP		Sumitomo Realty & Development Co Ltd TSE:8830	3.8T JPY	28%
JP		Daiwa House Industry Co Ltd TSE:1925	3.3T JPY	10%
IN		DLF Ltd NSE:DLF	1.7T INR	21%
HK		Swire Pacific Ltd HKEX:19	87.3B HKD	12%
CN		Shanghai Zhangjiang Hi-Tech Park Development Co Ltd SSE:600895	69B CNY	23%
HK	W	Wharf Holdings Ltd HKEX:4	67.6B HKD	49%

Nomura Real Estate Holdings Inc
Glance View

Market Cap

853.5B JPY

Industry

Real Estate

Nomura Real Estate Holdings Inc. stands as a prominent figure in Japan's bustling real estate sector, a testament to its enduring legacy and strategic acumen. Born from the roots of the Nomura Group, the company drove its first stakes into the Japanese real estate market in the mid-20th century. Over the years, Nomura has meticulously crafted a diversified portfolio that spans residential development, commercial properties, and property management. With iconic projects dotting the landscapes of Japan, it has capitalized on the country's unique demographic and economic fabric. From elegant high-rise condominiums and sprawling office complexes to vibrant retail spaces and innovative logistics facilities, Nomura's evolution embodies a harmonious blend of tradition and modernity. Its revenue streams are as diverse as its portfolio, drawing from property sales, leasing, and a robust suite of management services that ensure these properties remain in impeccable condition. At its core, Nomura’s business model thrives on a strategic cycle of land acquisition, development, and value addition. The company identifies and acquires prime sites often before demand surges, a strategy that requires both foresight and a keen understanding of market dynamics. With residential developments, it capitalizes on Japan's nuanced living preferences, offering everything from luxurious urban homes to comprehensive community projects. Similarly, the commercial division crafts spaces that cater to evolving business needs, particularly in major urban centers where demand is consistently high. Its asset management and development division underpins steady cash flows through long-term contracts and robust management systems. Furthermore, by leveraging its comprehensive real estate services – from property brokerage to facilities management and consulting – Nomura Real Estate continues to reinforce its position not just as a builder of structures, but as a creator of enduring value and community-centric environments.

View Nomura Real Estate Holdings Inc Analysis

Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

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Nomura Real Estate Holdings Inc
TSE:3231