The 2014 All-Japan Research Team: Energy & Utilities, No. 3: Hiroyuki Sakaida
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The 2014 All-Japan Research Team: Energy & Utilities, No. 3: Hiroyuki Sakaida

< The 2014 All-Japan Research Team Hiroyuki Sakaida Goldman Sachs Japan Co. First-place appearances: 0

Total appearances: 8

Analyst debut: 2004 Advancing from runner-up to seize third place is Hiroyuki Sakaida of Goldman Sachs Japan Co., whose research is “timely and intensive,” one money manager offers. Sakaida helps “improve our earnings forecast models through the discussion on each variable factor,” this client adds. Power companies have been affected by the news flow around nuclear plant restarts, notes Sakaida. Japan’s utilities names fell 22.3 percent from their May high point last year through mid-March, while the broad market was down 9.1 percent. “The delays in safety checks by a regulator in the second half of 2013 drove the underperformance of the sector,” he explains. The analyst believes that the group’s stocks now reflect not just the relaunch of those operations but also profit recovery and potential dividend resumption. “Although the nuclear restart in 2014 may have a short-term positive impact on the share prices,” he cautions, “we think that they are not attractive from the valuation point of view.” Alternatively, Sakaida recommends gas companies going forward, especially Osaka Gas Co. and Tokyo Gas Co. “Both will be able to achieve long-term earnings growth in spite of the expected deregulation in the gas market,” he projects. “They will grow their profits by the shift to nonregulated businesses, including power generation, [liquefied-natural-gas] resale and overseas investment.” Osaka Gas was trading at ¥403 in mid-March, and he forecasts it will rise to ¥490. For Tokyo Gas, Sakaida has a target price of ¥670, representing a 30.4 percent upside to its mid-March value.

See also Hiroyuki Sakaida's profile in the 2012 All-Japan Research Team.

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