Group 1 - There are over 2,700 hidden champion companies globally, with Japan ranking prominently among them. These companies typically have annual revenues not exceeding $5 billion but hold a top-three market share in their respective niches [1][3] - The Japanese stock market has recently gained attention, with Bank of America raising its year-end forecast for the TOPIX index from 2,850 to 3,050 and the Nikkei 225 index from 40,000 to 43,000 [1] - Keyence, a leading manufacturer of sensors and industrial automation systems, exemplifies a hidden champion with impressive performance, having a market capitalization exceeding $100 billion, making it Japan's third-largest company by market value [2][4] Group 2 - Keyence's revenue and net profit have grown by 110% and 130% respectively over the past decade, with an operating profit margin consistently above 50% [2][4] - Japan's hidden champions are characterized by their strong profitability despite smaller scale, with Keyence achieving a revenue of $4.68 billion and a net profit of $2.53 billion in the 2023 fiscal year, alongside a 54% operating profit margin [4] Group 3 - The success of Japan's hidden champions can be attributed to several factors, including a long-term perspective, craftsmanship spirit, technological innovation, and internationalization strategies [5][7] - Many hidden champions have a long history, often exceeding several decades, allowing them to develop core competencies in their specialized fields [5][6] - Companies like YKK and Nagase Integrex exemplify the craftsmanship spirit, focusing on high-quality products and precision engineering [6][7] Group 4 - Japanese hidden champions invest significantly in research and development, with Keyence allocating over 10% of its revenue to R&D annually, maintaining a competitive edge through continuous innovation [7] - The internationalization strategy of these companies allows them to expand their market presence and optimize resources, as seen with YKK's operations in over 70 countries [7]