[Looking back on 2024] What are the “10 strongest stocks” of Japanese stocks? It also surged 6 times this year! Will 2025 be a further leap forward

moomooニュース日本株 wrote a column · 3 hours ago

2024 has entered its final month, and how do we seize new opportunities for 2025, which is approaching? Let's look back on trends in the Japanese stock market over the past year and search for clues to strategy for 2025.

The Nikkei Average year-to-dateAn increase of approximately 18%Doing it. However, if you look closely, the Nikkei Average is actually21% increase already in the first quarterThen, the next 3 quarters were hit by significant volatility, but total returns were negative.

[Looking back on 2024] What are the “10 strongest stocks” of Japanese stocks? It also surged 6 times this year! Will 2025 be a further leap forward

Reports that Mr. Buffett has invested in the five major trading companies have been reported since 23, and foreign investors followed suit in early '24The inflow of foreign capital was the main reason for the sharp rise in Japanese stocks in the first quarterIt became. However, the results of the “spring battle” were announced in March, and wage increases reached a high level for the first time in about 30 years, the Bank of Japan also announced the end of negative interest rates in the same month, global semiconductor stock adjustments in April, and deterioration of the situation in the Middle East led to a decline in the Nikkei Average. Although the yen has escaped negative interest rates, the interest rate difference between Japan and the US is still large, and the depreciation trend of the yen continues,The 38-year low was recorded on 7/3I did it. The depreciation of the yen boosted Japanese stocks in the third quarter,Nikkei recorded an all-time high of 42,426 yen on 7/11However, after that, it became a factor for semiconductor stocks to push down the index again.

Bank of Japan on July 31Raise interest rates unexpectedlyThe effects of the US economic indicators also overlapped, and finally on 8/5“Black Monday”Then, the Nikkei AverageA sharp drop of 4,451 yen in 1 dayRecord it,A historic crashIt became. The Japanese stock market finally recovered throughout the third quarter and regained stability. In September, Mr. Ishiwari Shigeru won the Liberal Democratic Party presidential election, and the market was temporarily concerned about changes in Japan's economic policy. In October, both the Liberal People's Democratic Party and the Komeito Party did not reach a majority of seats,It caused further turbulence in the political world. After the political situation settled down, the focus of the Japanese stock market in the fourth quarter shifted to the US. After Mr. Trump won the US presidential election, his policy changes had an impact not only on the United States but all over the world.Many Japanese companies operating in the US were affected。

Overall, however, Japanese stocks have maintained an upward trend this year, and are still popular with investorsLots of investment opportunitiesIt's bringing it.

The “explosion” ranking of Japanese stocks! A rising star in the new AI era, Defense Strikes Back, and entertainment stocks that surpass economic waves

●Is AI “favorite” a wire brand rather than a semiconductor?!

FirstIs a major electric cable company $Fujikura (5803.JP)$So what is the rate of increase5 times. The main optical fiber products took advantage of technical capabilities to capture demand for data centers.Increased demand for generative AI (artificial intelligence)Use it as a backgroundInfrastructure investmentswill be a tailwind.

The background is growing demand for transmission cable applications in data centers, etc. which are expanding due to the AI boom, and for EV (electric vehicle) wire harnesses (assembled electric wires). EVs require about 4 times as much copper as gasoline cars to manufacture. One reason for the tailwind is that copper prices are on an upward trend due to concerns about a shortage of copper supply associated with rising demand.

Other electric wire brands are also doing well. $Sumitomo Electric Industries (5802.JP)$, $Furukawa Electric (5801.JP)$Other than Fujikura“Densha Gosanke”with $SWCC (5805.JP)$Each year since the beginning of the year60%、216%、A sharp rise of 170%. They hit high prices since listing one after another.

Who is Atsushi Yamaguchi, senior analyst at SMBC Nikko Securities”The United States is working on optical line development across the country for '25. Expectations are growing that Japanese wire-related brands will also benefit” I will point it out.

●Defense-related stocks soar - geopolitical risks, AI era and Trump trade as tailwinds

2nd placeof $IHI (7013.JP)$and3rd placeof $Mitsubishi Heavy Industries (7011.JP)$、8thof $Kawasaki Heavy Industries (7012.JP)$etc.,Defense-related stocksalso came in at the top. IHI has strengths in defense equipment such as rocket-related productsOver 198%Mitsubishi Heavy Industries, which makes fighter jets and aircraft equipmentOver 176%Kawasaki Heavy Industries, which handles transport aircraft and submarinesOver 103% increaseDoing it. Sales revenue, which corresponds to sales of defense-related businesses for the fiscal year ending 2025/3, is expected to increase 25% from the previous fiscal year to 1 trillion511 billion yen for the total of the three companies.

This year,Increased geopolitical riskIt also attracted attention as a defense-related stock sinceElectricity demand associated with the spread of AIThe expansion will be a tailwind for energy-related businesses. In addition to that,Japan's defense budget expansionMarket attention has increased further due to expectations that it will continue. Meanwhile, due to the victory of former President Trump in the US presidential election, each company started from speculation that defense budgets would increase in Japan and the US”Trump TradeIt is also the target of”.

Meanwhile, $IHI (7013.JP)$While it is currently bustling as a defense-related stock,It also promotes choice and concentration. While focusing on the aero engine, rocket field, ammonia, etc., sales of subsidiaries and businesses with boilers, cranes, and lawnmowers were announced one after another after October alone. A review of the rational business structure has also led to investor evaluations, and it has risen by about 2 times since the beginning of the year. In addition, purchases spread to small and medium-sized defense-related stocks. Deliver control systems etc. to the Ministry of Defense $Nippon Avionics (6946.JP)$Is44% higher, rifle manufacturer's $Howa Machinery (6203.JP)$Is70% higheretc. are also rising.

● Entertainment stocks that surpass economic waves, take the market by storm with the power of overseas expansion and IP

Less susceptible to economic fluctuationsAs,Domestic entertainment stocksis also boomingthat's it. Domestic entertainment companiesIntellectual Property (IP)withOverseas strengtheningA growth strategy centered on Overseas licensing business etc. are doing well $Sanrio (8136.JP)$(5th place) since the beginning of the yearOver 126%, mobile soccer games, etc. are doing well $Konami Group (9766.JP)$(7th place)Over 104%It's rising.

Analyst Kenji Kido of Asset Management One says, “While there are elections in Japan and the US and the policy outlook is uncertain, there are aspects where funds have gone into entertainment-related stocks that are less likely to be influenced by the economy.” “Before $Nintendo (7974.JP)$Investments by large overseas investors, which were at the center, have spread to other stocks. There are also voices saying, “Trading by individual investors is also active.”

Other related stocks have also risen sharply. Anime distribution etc. will grow $Toei (9605.JP)$Has come to the beginning of the yearOver 56%、 $Toho (9602.JP)$butOver 43%、 $Nintendo (7974.JP)$butUp over 28%Then, the high price since listing was updated.

● Sanwa HD rose over 117% due to the benefits of a “strong America”

Meanwhile, Mr. Trump, who won the US presidential election, has set stimulus measures for the US economy, such as tax cuts and deregulation, as top priority policies. Investors' risk appetite has increased against the backdrop of a strong US economy, and there is a widespread view that Japanese stocks will follow the rise in the form of following US stocks. Shutters from a major company $Sanwa Holdings (5929.JP)$North America earns 40% of sales and 50% of operating profit (6th place). Industrial doors and the like, which have a high market share, are doing well, and stock pricesOver 117% increase since the beginning of the yearThe high price since listing was updated.

It is said, “As the US economy continues to be strong, Japanese foreign demand stocks with a high US production ratio will receive a tailwind.”

Japan large stock growth rate ranking! What are the chances to hide in the 10 trillion yen club

As for large Japanese stocks, the number of Japanese companies with a total market value of 10 trillion yen or more this year is increasing. Starting with 18 companies as of 12/16 and 10 companies at the end of 2023Almost doubledI did it. The faces with the highest market capitalization reflect the industrial structure and investors' growth expectations from time to time. $Hitachi (6501.JP)$and $Tokio Marine Holdings (8766.JP)$, general trading company's $ITOCHU (8001.JP)$etc. are the first time this year”10 trillion yen clubIt joined”.

● $Hitachi (6501.JP)$

FirstHitachi's total market capitalization reached 10 trillion yen for the first time in January, and 18 trillion yen as of December 16More than 80%It has been piled up. The stock priceNearly double from the beginning of the yearIt has become.

The reason why Hitachi's stock price has risen drastically this year is that business restructuring, power transmission and distribution, and the growth potential of the digital business have been evaluated, and it is attracting the attention of overseas investors. As a result of showing improved capital efficiency and ability to execute, it succeeded in structural reforms, making it a rare presence among large Japanese companies, and it is an opportunity for evaluations of Japanese stocks from overseas to change. In particular, a digital strategy centered on “LUMADA” is the key to improving market evaluations, and Hitachi is aiming to move from a conglomerate into a space between capital goods and technology.

Other in the form of following Hitachi's structural reformsMajor electronics companies have also started moving。 $NEC (6701.JP)$with $Fujitsu (6702.JP)$Sales and profit declined due to the effects of business restructuring, respectively since the beginning of the yearOver 57%、Up over 31%。

● $Recruit Holdings (6098.JP)$

Recruit for 2nd place tooNearly double from the beginning of the yearIt has become. On November 8, the 0.01 million yen mark was added for the first time. While the US Federal Reserve determines that there is a way to control inflation due to the high interest rate policy up until now, it decided to cut interest rates by 0.5% in September and an additional 0.25% interest rate cut in November to prevent the labor market from falling more than necessary. Also, due to the economic policies advocated by former Republican President Trump, who won the US presidential election,US employment is risingBuying into Recruit shares has intensified since this observation.

Furthermore, the consolidated earnings forecast for the fiscal year ending 2025/3 was revised upward, and the HR technology business centered on the US job search site “Indie” was strong, the high unit price strategy was successful, the launch of recruitment services using AI, changes in billing models, etc.Measures aimed at improving profitability have succeeded one after anotherDoing it.

● $Sumitomo Mitsui Financial Group (8316.JP)$& $Mitsubishi UFJ Financial Group (8306.JP)$

The Bank of Japan lifted negative interest rates in March, raised interest rates in July, and US interest rates are also expected to adopt an aggressive wealth policy due to the presidential election of former President TrumpStock prices of major financial stocks are on a full-scale upward trendI'm on board. Sumitomo Mitsui Financial Group is here at the beginning of the yearOver 63%Mitsubishi UFJUp over 53%Doing it.Effects of rising yen interest ratesSo both Mitsubishi UFJ and Sumitomo Mitsui Financial Group are around 70 billion yen for the full year, $Mizuho Financial Group (8411.JP)$It is also expected that earnings will rise by around 85 billion yen. others,Gains from sale of policy stocks will also raise earnings. Mitsubishi UFJ and Sumitomo Mitsui each contributed to an increase in profit on the scale of 200 billion to 300 billion yen.

● $Tokio Marine Holdings (8766.JP)$

Tokio Marine joined the 10 trillion yen club for the first time in May. Aggressive sales of policy holdings and improvements in overseas profitability have been evaluated.

Tokio Marine HD Senior Managing Director Kenji Okada said, “There was an increase in profit due to a drastic increase in profit from policy stock sales and the effects of the depreciation of the yen.”

Source: moomoo, Nihon Keizai Shimbun, MINKABU
This article uses automatic translation in part
-MOOMOO News Sherry

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