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The Tokyo Stock Exchange has been an exciting market for the past few years. In the last three years alone, the Nikkei 225 Index has doubled in value from roughly 9000 points to the current 17,980 points. With massive quantitative easing programme, many investors are still very optimistic about the Japanese market.

However, if you are unfamiliar with the Japanese market, here are two of the fastest growing corporation in Japan over the past decade.

 

UNIQLO

Fast Retailing Co. Ltd (9983:JP), the largest retailer in Japan, most famous for its brand, UNIQLO. The company has been growing its revenue at a pace of 15.4% annually for the past ten years and improved its earnings per share at a rate of 12.7% for the past decade. The company now booked a revenue of more than JPY1.38 trillion in the last financial year and still show no sign of slowing down. The company is already one of the largest corporation in Japan with a market capitalisation of more than JPY4.5 trillion.

However, due to its massive success over the past decade, the stock is not trading cheaply. Its price to earnings ratio is about 44.6 times and only offers a dividend yield of 0.7% for its shareholder.

 

Open Sesame

Being one of the first investor in Alibaba.com, Softbank CEO, Masayoshi Son, is seen by many as being the best investor in Japan. He has built Softbank into a massive player in the Telecommunication and IT space. Softbank Corp (9984:JP) saw its revenue grew by 28.1% compounded annually for the past decade. Its earnings per share grew at a more impressive rate of 31.1% over the same period. Today, Softbank Corp is the three largest company listed in the Tokyo Stock Exchange, smaller in term of market capitalisation only to Toyota Motor Corporation and Mitsubishi UFJ Financial Group. Over the past year, the company has gain its profile greatly from the Sprint USA takeover and the IPO of its investment, Alibaba.com.

Indeed, it seems shareholders in Softbank Corp has really found the gold mine. The company currently trades at a price to earnings ratio of 14 times and offers a dividend yield of 0.6%.

 

Value in Action

The Japanese Stock Market is a massive exchange with more than 100 companies with market capitalisation of above USD10 billion. For investors interested in the market, it is well worth your time to start with the blue chip in the country.

 
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All views and opinions articulated in the article were expressed in Stanley Lim’s personal capacity and does not in any way represent those of his employer and other related entities. Stanley Lim does not own any companies mentioned above

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