< The 2015 All-Japan Research Team
Kunihiro Matsumoto
SMBC Nikko Securities
First-Place Appearances: 8
Total Appearances: 13
Analyst Debut: 2003
Capturing the top spot on this roster for an eighth year running is Kunihiro Matsumoto of SMBC Nikko Securities. Matsumoto dubs Kanagawa-based Nifco, a producer of custom-molded plastic components and assemblies, a likely outperformer. The parts maker is on track to post record operating profits for a third consecutive year, he notes, with growth bolstered by Nifco’s exposure to North American markets — and from its Mexican manufacturing plant, in particular, which will be fully online this year. At the same time, the company is expanding its customer base globally to include Detroit’s Big Three and South Korean automakers Hyundai Motor Co. and Kia Motors Corp., he reports. Its executive team’s dividend policy is also a plus, as “management confirmed its payout ratio target of 30 percent,” explains the analyst. He projects a price of ¥4,600 for Nifco’s stock, which was trading at ¥4,290 late last month. Matsumoto, 49, also continues to recommend that investors overweight Tokyo’s Bridgestone Corp. Shares of the world’s largest tire maker rocketed 54.8 percent, to ¥4,768, during the 12 months through late March, besting the sector by 24.2 percentage points. He sees room for them to run to ¥5,400. Bridgestone has delivered continuously improving recurring profits for the past four fiscal years, and he expects that trend to continue, citing the weak yen and low-cost raw materials as key drivers of its profitability. In addition, the manufacturer benefits from technological advances in both high-performance and fuel-efficient tires, and management’s strategies of tailoring brands to particular markets and restructuring the supply chain are also paying off. Finally, says Matsumoto, Bridgestone’s leaders are “aware of the importance of returning profits to shareholders” in the form of higher dividends. Clients appreciate his insight. “He has strong relationships with auto parts suppliers in the Nagoya region, where Toyota’s headquarters is located,” observes one fund manager. “His information is always timely, and his long-term view is persuasive, as well.”