2015 All-Japan Research Team: Transportation, No. 1: Jun Harada
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2015 All-Japan Research Team: Transportation, No. 1: Jun Harada

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All-Japan Research Team Hall of Fame analyst Jun Harada of UBS rebounds from runner-up to post his 13th No. 1 finish since 2002.

< The 2015 All-Japan Research Team

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Jun Harada

UBS

First-Place Appearances: 13


Total Appearances: 16


Analyst Debut: 2000


All-Japan Research Team Hall of Fame analyst Jun Harada of UBS rebounds from runner-up to post his 13th No. 1 finish since 2002. “Sell-side analysts have a tendency to change their minds when share prices move against their expectations,” says one buy-side counterpart. “But when weird moves are caused by valuation and not a change in earnings forecasts, he sticks to his hypothesis. He has great confidence based on very deep fundamentals research.” Currently, Harada, 44, is advising clients to buy Tokyo-based Kintetsu World Express, a diversified global shipping and freight-forwarding concern. He is upbeat on the company in part owing to its “high-growth, low-risk business model.” KWE boasts an asset-light cost structure, and its freight-forwarding business has seen relatively high growth in sales revenue, he notes. Moreover, the logistics provider is positioned to benefit from a strong earnings revival resulting from “solid freight movement, margin recovery and yen depreciation effects,” the researcher contends. In addition, management announced in February that it would spend $1.2 billion to acquire Singapore-based Neptune Orient Lines’ APL Logistics, which he believes “complements its businesses well.” The two companies have few customers in common, Harada reports, and without significant overlap the merger should provide both synergies and revenue expansion. Although Japan’s manufacturing industry has migrated offshore, shrinking what he calls the “freight pie” of shipments out of Japan, that change could rebound to KWE’s advantage because only 36 percent of its total sales are generated in its home country. “Overseas markets, particularly in Asia,” he says, “still have ample growth potential.” Trading at ¥5,450 late last month, KWE’s stock earns a target price of ¥6,700. “He’s got a disciplined and consistent approach to earnings forecasts and valuations,” observes another fund manager. “And he’s gutsy, someone who’s not afraid to publish overly low or high earnings estimates and target prices based on his analyses.”



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