< The 2014 All-Japan Research Team
Merrill Lynch First-Place Appearances: 4
Total Appearances: 7
Analyst Debut: 2008 Akiko Kuwahara of Bank of America Merrill Lynch rules this roost for a fourth consecutive year, winning plaudits for her responsiveness to questions and for being “very consistent in her analysis, models and views,” as one money manager puts it. The 40-year-old analyst, who also repeats in third place in Ceramics & Glass, believes that the sector’s outperformance last year is unlikely to be repeated this year. Indeed, the group soared 74.5 percent in 2013, besting the broad market by 22.6 percentage points, and has since retreated by 15.4 percent, through mid-March, against the broad market’s 11 percent drop. Yen depreciation is driving up input costs for raw materials and fuel, Kuwahara explains. Moreover, although “demand might be good thanks to the economic recovery,” she notes, “volume upside could be limited and is already at full utilization ratios.” The analyst predicts that performance of textiles companies will be uneven in 2014, but she is still bullish on Tokyo-based Toray Industries, a maker of synthetic polymers and specialty plastics that she has recommended buying since August 2010. “We expect Toray to see comparatively good performance thanks to the news flow for [carbon-fiber reinforced plastics] demand expansion,” she explains. In addition, Toray’s profit structure has already been adjusted for the post-liquid-crystal-display era, and the company is enjoying robust growth in the textiles segment and boasts strong cost controls and inventory, Kuwahara says. Last year, Toray’s stock leaped 38.1 percent, but it had given back 9.3 percent by mid-March, to close at ¥660.
