< The 2014 All-Japan Research Team

Masashi Kubota & team
Bank of America Merrill Lynch
First-place appearances: 0

Total appearances: 5

Team debut: 2009

In his first top-three appearance on this roster, Bank of America Merrill Lynch’s Masashi Kubota jumps from runner-up to claim second place. Demand has been an issue for companies in this changing sector, he advises. The market for smartphones is shifting from low-end products to higher-end goods, he notes, such as those employing long-term-evolution technology. LTE phones allow for faster uploading and downloading of data, and they “should be the key to stimulating component demand,” Kubota says. Automotive and home-appliance industries can further augment appetite for electronic components, he forecasts, citing growth in the hybrid cars business and stricter safety and emissions requirements as positive inputs. Against this backdrop, the analyst favors both TDK Corp. of Tokyo and Kyoto-based Rohm Co. In addition to being exposed to both the autos and smartphone segments, he explains, TDK has been enjoying improving margins since restructuring its passive-components business. He dubs Rohm a recovery story in which stronger positioning vis-à-vis the car market is boosting the manufacturer’s top line while management’s cost-cutting is enhancing the bottom line. Kubota anticipates faster profit growth this fiscal year than last for both companies. Clients appreciate what one dubs his “value-added insights.”