< The 2016 All-Japan Research Team
Sumito Takeda
UBS
First-Place Appearances: 2
Total Appearances: 2
Analyst Debut: 2015
For a second year running, Sumito Takeda of UBS occupies this winner’s circle. Japan’s Internet companies, particularly those with exposure to mobile commerce, should post strong performance, he forecasts, though not necessarily right away. The group rose 2.6 percent during the 12 months through mid-March, outperforming the broad domestic market by 19.4 percentage points. However, “a phase of volume growth in new smartphone users is ending,” says the analyst, 40. “Changes in the sector’s competitive strategies have been flagged by the strengthening of promotional measures for Yahoo! Premium members by Yahoo Japan [Corp.] and the Prime video and music services offered by Amazon. User acquisition cost is increasing in the shorter term, but we think [lifetime value per] user is also increasing in the longer term.” Yahoo Japan is his favorite player in this space. The Tokyo-based conglomerate provides advertising, broadband Internet, e-commerce, online auction and search engine services, among others. Its “future success hinges not simply on stimulating use,” Takeda advises, “but in integrating use over various, diverse areas — media, premium services, commerce and financial services. We believe the company is steadily preparing for this.” Yahoo Japan’s shares closed at ¥475 in mid-March, and he projects a rise to ¥600. Another preferred name among the 16 domestic stocks he monitors is Tokyo’s GMO Internet, which offers domain, media, mobile entertainment, security, server and settlement services to a corporate clientele. Touting the defensive growth of GMO’s Internet infrastructure business, the potential of its financial technology operations and management’s unique and strong leadership, the researcher assigns the stock a price objective of ¥1,900. It closed in mid-March at ¥1,395.