Sumitomo Mitsui Trust: Fair Value Estimate Adjusts for Stock Split

Sumitomo Mitsui Trust Holdings', or SMTH's, shares have gone ex-stock split today, leading to an adjustment to our fair value estimate per share to JPY 3,420 from JPY 6,840. There is no other change to our views on SMTH. The stock is trading at around a 21% discount to our fair value estimate and is relatively attractive. We think the group is a beneficiary of an inflationary environment, given its exposure to real estate and asset management activities. A more diverse operational base also means that it is less sensitive to interest margins, which has resulted in underperformance versus traditional banking peers in 2023.