2016 All-Japan Research Team: Plant Engineering & Shipbuilding, No. 2: Hirosuke Tai
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2016 All-Japan Research Team: Plant Engineering & Shipbuilding, No. 2: Hirosuke Tai

Vaulting from runner-up to second place, Daiwa Securities Group’s Hirosuke Tai impresses clients with his contrarian views.

< The 2016 All-Japan Research Team

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Hirosuke Tai

Daiwa Securities Group

First-place appearances: 1


Total appearances: 14


Team debut: 2002


Vaulting from runner-up to second place, Daiwa Securities Group’s Hirosuke Tai impresses clients with his contrarian views. “His investment ideas are unique,” insists one fund manager. “While everyone expected good performance for factory automation names and was bullish, he has basically been negative, recommending more defensive names, preferring domestic exposure — and he has been right.” For his part, Tai, 44, reports that “since October I’ve been keeping a bearish stance for this sector because of the decline of oil prices, strong yen and many loss-making projects. I don’t have any bullish ideas for any names.” Tracking the same 19 Japanese plant engineering and shipbuilding companies as he did a year ago, he is advising investors to weight down or short every company in the space until the ratio of share price to book value for each stock drops to the level it held the year after U.S. investment bank Lehman Brothers collapsed. In particular, he is directing clients’ attention to heavy equipment makers IHI Corp. of Tokyo; Hyogo-based Kawasaki Heavy Industries; and Mitsubishi Heavy Industries, which is also headquartered in the nation’s capital. The price-to-book ratios for these manufacturers in 2009 were 0.5, 0.7 and 0.8, respectively. Today those metrics stand at 0.8, 1.2 and 0.9. “The market is shrinking quickly,” Tai cautions, “so I am trying to find the bottom for share prices and the timing” before changing that position.



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