< The 2016 All-Japan Research Team
Yasuo Nakane
Mizuho Securities Group
First-Place Appearances: 3
Total Appearances: 10
Analyst Debut: 2007
In second place the past two years, Yasuo Nakane climbs back to the top spot he held in 2013, when he was with Deutsche Securities. After 14 years spent tracking Japanese technology companies for that firm, he jumped to Mizuho Securities Group in August. His predecessor at the head of this lineup, four-time champion Eiichi Katayama, left Bank of America Merrill Lynch to become director of business development at Panasonic Corp. in January. Nakane, 48, wins praise from one manager for ”the depth of his reports.” Another supporter observes that he is “cognizant of the sector’s fundamentals and has proven he is very much in touch with market sentiment.” Foreign exchange rates represent one of the major factors influencing performance for Japan’s consumer electronics industry, the Mizuho researcher notes. Many of its end-products businesses — including personal computers, smartphones and televisions — are enjoying a boost from the strong yen, he explains, because their costs typically are denominated in dollars while revenues are reported in a wide range of monetary units. As a result, depreciation of the euro and other currencies versus the dollar has a significant impact on earnings. Moreover, Nakane adds, leading domestic manufacturers such as Osaka’s Panasonic and Tokyo-based Sony Corp. are likely to be able to reduce costs further as components makers lower prices to stimulate demand. Although these multinational producers’ components operations would be hurt, in turn, he believes that the positives outweigh the negatives for Sony, so deems it his favorite among the four companies under his coverage. “Though consensus sales and earnings numbers are too high, the business portfolio looks quite promising,” explains the analyst, citing growth drivers like games, image sensing technologies and music; as well as such highly profitable segments as digital cameras and financial services. Finally, given Sony’s being “led by the strongest top-level management ever, my sum-of-the-parts analysis shows the stock price is undervalued,” he concludes.