Making waves
Nippon Nuggets - Saturday 6 Feb
NUGGETS
Small-cap Global Winners: According to METI, there are around 100 companies in Japan that are globally dominant niche companies. On average, these companies have 43% global share, 13% operating margins and over 45% of revenues from overseas. These businesses demonstrate market focus, a competitive edge, and a wide moat. So, if you have ever wondered how 7-11 manages to make so many tasty treats, then they are probably using automated kitchen factory equipment from Rheon Automatic Machinery – maker of the world’s first machine that wraps fillings in dough – who would not want one of those!
Read More on Global Niches, About Rheon (6272)
Wave Power: With Japan set to upgrade its energy policy mix later this year and growing pressure from Japan’s largest companies (Japan Climate Initiative), tidal energy is potentially a new opportunity. A Kyushu Electric subsidiary will carry out tests in early February off the coast of Goto, Nagasaki Prefecture. Commercialization of offshore wind is just around the corner, but tidal energy could be another way for Japan to meet its carbon neutral target by 2050.
Read More: Japan Times
Green Car: Nidec acquired MHI Machine Tool this week to further its goal of winning 35% global market share in EV traction motors. MHI Machine Tool brings expertise in gear cutting and grinding and skilled engineering talent, a scarce resource in Japan. Nidec’s E-Axles combine motors, inverters and gears and the latest Ni150Ex powers Geely’s C-class EVs.
Read More: Green Car Congress
The Ginza of Data Centers: Imagine a data center about seven times the size as the Tokyo Dome baseball park. Daiwa House, Japan’s largest homebuilder, is taking on this huge hyper-scale project. The project will cost around $1b and be in Inazi, Chiba, the same place that Google is eyeing for its next data center. The new data center is part of an expected 80% increase in floor space by 2025 as Japan gears up for an explosion in data from 5G, IoT and DX.
Read More: Kyodo News
Digital Transformation: METI plans to fully digitize applications for subsidies and benefits for small and midsize companies by fiscal 2023! Currently, only around 60% of small companies in Japan use the cloud for any services, so digitizing procedures for more government procedures should boost DX adoption.
Read More: Japan Times
SMALL CAP MOVERS
🔺+20% gremz (3150, $400m) a provider of efficient energy management solutions rose after reporting 41% profit growth for the first nine months of the year. The company saw firm demand for its consulting service, which helps companies minimize electricity bills.
🔺+19% SoldOut (6553, $180m) a provider of web marketing technology services for small companies rose every day last week after launching new services to integrate marketing and data management.
🔺+18% Avant (3836, $600m) a provider of business applications for accounting and planning continued its strong run. The company posted double digit interim profit despite COVID-19 headwinds.
🔺+16% Crowdworks (3900, $300m) the HR matching service, CrowdLink, for employers and prospective employees, launched in January 2020, signed up over 9000 users and over 400 companies to the platform. 🔺+16% Giftee (4449, $900m) Japan’s number one eGifting service rose after revising up its guidance for sales and profits, driven by a strong recovery over the corporate business, which had been weak due to COVID-19. ✅ No major losers this week!