< The 2016 All-Japan Research Team

Total appearances: 5

Team debut: 2011

For a third consecutive year, Kei Takahashi of Mizuho Securities Group earns second-place honors, impressing one advocate as “very knowledgeable and having a very good rapport with the management teams in the sector.” In his reporting on five Japanese telecommunications companies, the 47-year-old analyst “is anticonsensus — and therefore a very useful voice to consult with,” another fund manager remarks. For his part, Takahashi believes that “earnings and shareholder return perspectives seem very steady. As long as the recent risk-off market continues, the telecom sector should be one of the best sectors to invest in.” However, he cautions, “a major issue for mobile carriers is how well they differentiate their services from their competitors’.” Tokyo’s KDDI Corp. remains his most preferred name. A provider of mobile communications services and devices, as well as broadband, the company “could change its shareholder return policy in the coming new midterm business plan,” the researcher notes. In June and September, he highlighted his positive outlook and raised his price objective for the shares, from ¥2,970 to ¥3,270, then to ¥3,500. By mid-March the stock had gained 7.7 percent since that June reiteration and was trading at ¥2,998.50. During the same period, Japan’s telecoms overall slipped 2.8 percent, and its broad market tumbled 20.5 percent. “The major reason for the buy call is that KDDI’s free cash flow is expected to increase sharply from March 2017,” explains Takahashi. “It is more attractive than competitors based on a brilliant free-cash-flow perspective.”