Against the backdrop of declines in Japanese stock markets, with the Nikkei 225 Index and TOPIX both losing ground due to election uncertainties and inflationary pressures, investors are looking closely at fast-growing sectors such as technology for potential opportunities. In such a dynamic environment, identifying stocks that demonstrate strong innovation capabilities and adaptability to market changes can be critical to navigating the complexities of Japan’s evolving technology landscape.
Name
Sales growth
Profit growth
Growth assessment
Material group
20.45%
24.01%
★★★★★★
Hottolink
50.99%
61.55%
★★★★★★
eWeLLLtd
26.52%
27.53%
★★★★★★
f code
22.70%
22.62%
★★★★★☆
Mix
24.98%
30.36%
★★★★★★
Kanamic Network LTD
20.75%
28.25%
★★★★★★
Bengo4.com Inc
20.76%
46.76%
★★★★★★
Mental Health Technologies Ltd
27.88%
79.61%
★★★★★★
ExaWizards
21.96%
75.16%
★★★★★★
Money ahead
21.21%
70.32%
★★★★★★
Click here to see the full list of 120 stocks from our Japan High Growth Tech and AI stock screener.
Let’s take a look at some notable picks from our screened stocks.
Simply Wall St Growth Rating: ★★★★★☆
Overview: SAKURA Internet Inc. is a Japanese company specializing in cloud computing services with a market capitalization of ¥162.92 billion.
Operations: The company primarily generates revenue from its Internet infrastructure business, which amounts to ¥22.66 billion. This segment focuses on providing cloud computing services in Japan.
SAKURA Internet, in a volatile market, shows promising growth rates with expected sales and profit increases of 33.9% and 55.6% per year respectively, which is significantly better than the Japanese market averages of 4.2% and 8.7% . Despite past challenges, reflected in a -7.6% profit decline last year, the company’s aggressive R&D investments are in line with ambitious fiscal 2025 revenue forecasts of JPY 28 billion – a potential indicator of its commitment to innovation and market expansion. This strategic focus on development could position SAKURA as a resilient competitor in Japan’s technology landscape, capitalizing on upcoming product launches and enhanced service offerings forecast in their latest guidance.
TSE:3778 Earnings and revenue growth as of October 2024
Simply Wall St Growth Rating: ★★★★☆☆
Overview: Nissha Co., Ltd. operates in the industrial materials, devices, medical technologies, information and communications, and pharmaceutical and cosmetics sectors, both in Japan and internationally, with a market capitalization of ¥87.06 billion.
Operations: Nissha Co., Ltd. generates revenue primarily from industrial materials and equipment, with significant contributions from the medical technology segment. The industrial materials segment is the largest revenue generator at ¥72.03 billion, followed by the appliance segment at ¥63.30 billion.
Nissha’s performance in Japan’s fast-growing technology sector is underlined by robust expected annual earnings growth of 30.2%, significantly exceeding the Japanese market average of 8.7%. This growth is supported by an aggressive R&D strategy, with expenses notably accounting for a substantial portion of sales, reflecting the company’s commitment to innovation and technological advancement. Despite recent challenges, as evidenced by a one-off loss of ¥3.1 billion that affected past financial results, Nissha has been actively engaged in increasing shareholder value through strategic share buybacks, involving the buyback of 501,900 shares for ¥999.94 million was completed as part of its capital efficiency efforts. These moves highlight Nissha’s adaptive strategies and potential resilience in navigating market dynamics while promoting growth and innovation within Japan’s competitive technology landscape.
TSE:7915 Breakdown of income and expenditure as of October 2024
Simply Wall St Growth Rating: ★★★★☆☆
Overview: Shochiku Co., Ltd. operates in the audio and video, theater and real estate sectors, both in Japan and internationally, with a market capitalization of ¥142.23 billion.
Operations: Shochiku Co., Ltd. generates revenue through its diverse audio and video production, theater performance and real estate activities in Japan and international markets. The company’s business model responds to the demand of the entertainment industry while leveraging its real estate assets to support financial stability.
Moving through Japan’s competitive technology landscape, Shochiku is poised for significant growth with an expected annual profit increase of 82.2%. This optimistic projection complements revenue growth of 5.5% per year, surpassing the Japanese market average of 4.2%. The company’s commitment to innovation is evident in its substantial R&D expenditures, which are critical to maintaining long-term competitiveness and addressing unprofitability issues, as reflected in recent financial analyzes . Despite challenges in covering debt through operating cash flow and current unprofitability, Shochiku’s strategic focus on R&D could catalyze the transition to profitability and secure a stronger position within Japan’s fast-growing technology sector.
TSE:9601 Earnings and revenue growth as of October 2024
This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. We aim to provide you with targeted, long-term analysis based on fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or quality material. Simply Wall St has no positions in the stocks mentioned.
Companies discussed in this article include TSE:3778 TSE:7915 and TSE:9601.
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