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$4440.T WITZ — embedded-software specialist (automotive functional safety, cybersecurity) growing OP +26% with net cash = 56% of market cap. ~3.6x EV/EBIT, 10.8x P/E.
Top customers include Toyota, and Lasertec.
Management owns 27%, dividend tripled in 5 years,
beat initial guidance 4 of 5 years. Illiquid.
Ask an LLM to score a company and it hedges. Across 2,260 analyses from my Japan pipeline, 58% are HOLD. 643 are BUY, and 80% of those upsides sit between +20% and +60%.
So which of ~600 BUYs are actually the best?
Absolute scores collapse to the safe middle, especially on qualitative stuff like moat or management. But put two companies side by side and the model judges well. So I stopped scoring and started comparing.
What survived: companies that make physical things for factories, power grids and hospitals. Here are the AI-resilient tournament winners:
7131 Nomura: rice-bag machines and the bags. P/E 9.6, P/B 1.8, OP +26%/yr
6231 Kimura Kohki: factory HVAC. P/E 12.8, P/B 2.9, OP +43%/yr
6653 Seiko Electric: grid and data-centre power. P/E 13, P/B 1.4, OP +22%/yr
6643 Togami: switchgear. P/E 9.5, P/B 1.0, OP +29%/yr
6099 ELAN: hospital linen. P/E 16, P/B 2.9, sales +15%/yr
6365 JP, DMW - maker of the pumps used for flood-control. Asset rich, ~3.4x EV/EBIT, 9x P/E, sub book.
Tokyo just had 35 straight days of rain, the longest since 1886, partly blamed on a record El Niño.
This company is a beneficiary of extreme weather conditions.
20% of sales are overseas. Dividend raised 9 years in a row (¥65→¥210).
Most profit lands in Q4, so Q1 is usually near zero. This Q1 made ¥730m, already 24% of the full-year guide.
Illiquid.
4076 JP - IT consultancy, applied AI beneficiary - AI-related revenue grew from 17m to 416m in two years.
AI is a tailwind:
Revenue is project work, and CNS is increasingly pricing the deliverable instead of the human-hour.
The bottleneck is people. Only ¥22m of a ¥180m hiring budget could be spent, and ~400 outside contractors a month cost more than half of revenue.
Existing team will deliver more with AI assistance.
They guide revenue +19%, OP +41%. ~3x trailing EV/EBIT, ~2x on guidance.
Founder and president own 41%. Illiquid.
3150 JP grems - rooftop solar for Japanese SMEs, plus the electricity contract to go with it. OP compounded +26%/yr over 3 years on near-flat revenue; 5.6x EV/EBIT, 10.3x fwd P/E, ROE 27%, net cash = 20% of market cap.
Hikari Tsushin has raised its stake four times in a year, now 7.2%.
Founder owns 47%, dividend ¥19 → ¥93 in five years (3.9% yield), met or beat initial OP guidance 4 of 5 years. First grid-scale batteries coming online through Feb 2027.
GPT-6.1 Sol vs Claude Opus 5.5 in my Japanese stock-analysis pipeline:
Extracting 636 known facts from filings:
- sol: 604, 0.3% wrong
- opus: 604, 1.3% wrong
Analysis, 52 checks (pension traps, trust shares, locked-up cash, etc.):
- sol: 46/52, 88.5% accuracy
- opus: 42/52, 80.8%
Full analysis per company: opus costs ~3.6x more at API prices.
6643 JP Togami Electric — switchgear and automation gear for Japan's power grid, riding the utilities equipment replacement cycle. OP up 5 years straight (+29%/yr over 3y), net cash + securities = 37% of market cap. ~5x EV/EBIT, 9x P/E.
~20% price hike on high-voltage load switches since May, ahead of the second half when most of the year's sales land; backlog +12%. Now selling reclosers in the US: dealer network in 32 states.
CEO and his holding co own 15%, 6% of shares bought back and cancelled in 2 years, beat initial guidance 4 of 5 years. Illiquid.
NCS&A (9709 JP) Market cap 17.8B. Net cash 12.3B - ¥828 a share. EV/EBIT ~2.8, P/E 9, div 4.8%. They just retired ~8.5% of the share count.
What they sell: converting legacy core systems. Projects - 3 to 14 million lines of code, 15 to 48 months, life insurers, a regional bank.
Plus vertical software: their municipal benefits system runs in 124 of Japan's 1,724 municipalities, 47 of them in the home region, so most of the country is still untouched.
Over the last four years headcount is flat and operating profit doubled.
Guidance has been revised up mid-year five years running - most reliably in late February or March, sometimes alongside H1 results at the end of October. Q1 operating profit was +16% against full-year guidance of −3.5%.
2359 JP, CORE Corp, 5.5 EV/EBIT, 26% of market cap in net cash, 3.1% yield.
Embedded and industrial software for manufacturing, semiconductors, IoT, robotics, space and digital media. Notable sectors:
- Space: MADOCA-PPP GNSS receivers. Selected by JAXA to build an onboard PPP receiver for small satellites.
- Energy: transmission and distribution systems for utilities.
Q1 FY27: revenue +12%, operating profit +22%.
