关税不确定性下降背景下日本股票的投资机会-Investment Opportunities in Japanese Equities Amid Declining Tariff Uncertainty

Summary of Key Points from the Conference Call Industry Overview - Industry: Japanese Equities - Context: The analysis focuses on investment opportunities in Japanese equities amid declining tariff uncertainty following a 15% reciprocal tariff agreement announced on July 22, 2025, which significantly reduced trade-related uncertainty [1][7]. Core Insights - Earnings Performance: First quarter earnings exceeded expectations despite concerns, with recurring profit declining by 8.0% year-over-year but surpassing consensus expectations by 10.4% [8][48]. - Investor Positioning: The distortions in investor positioning caused by tariff concerns are expected to gradually unwind, particularly in sectors that were previously underweighted, such as the auto sector [6][9]. - Stock Screening: A screening of stocks was conducted to identify those likely to benefit from the unwinding of distortions, focusing on large cap, highly liquid stocks with strong recurring profit performance relative to full-year guidance [6][48]. Sector Analysis - Active Fund Positioning: There has been a decline in weights for Raw Materials & Chemicals, while increases were noted in IT & Services and Financials. The auto sector's weight change appears limited due to prior underweighting [12][19]. - Valuation Metrics: Sectors such as Foods, Pharmaceuticals, and Transportation & Logistics appear attractive based on Book-to-Price (B/P) and forward Earnings-to-Price (E/P) metrics, while sectors like Energy & Resources and Machinery are considered relatively expensive [21][23][39]. - Foreign Exposure: Japanese companies derive 44% of total sales from overseas, with 18% from the Americas and 16% specifically from the US. High exposure sectors include Rubber Products and Transport Equipment [31][34]. Investment Recommendations - Long Side Conditions: Stocks recommended for the long side must show a decline in global fund active weight, a valuation score of 70 or higher, a US sales ratio of 10% or more, and Morgan Stanley ratings of Overweight or Equal Weight [40][42]. - Short Side Conditions: Stocks for the short side should exhibit an increase in global fund active weight, a valuation score of 30 or lower, a US sales ratio below 10%, and Morgan Stanley ratings of Equal Weight or Underweight [40][43]. Performance Insights - Stock Performance: The long side has underperformed the universe (TOPIX500), while the short side has outperformed significantly, with a performance gap attributed to the period surrounding the announcement of reciprocal tariffs [44][46]. - Market Sentiment: Political optimism in Japan and a resilient tech sector are expected to support large cap, highly liquid stocks, with upward revisions in analysts' earnings forecasts anticipated due to stronger-than-expected first quarter results [50][49]. Additional Considerations - Sector-Specific Trends: While some sectors have shown improved investor preference, caution is warranted due to valuation levels. Individual stock assessments remain essential [39][48]. - Earnings Guidance: Corporate guidance has remained largely unchanged, but some companies have revised their outlooks upward, indicating milder-than-expected impacts from tariffs [49][50]. This summary encapsulates the key points discussed in the conference call regarding the Japanese equities market, focusing on the implications of tariff agreements, sector performance, and investment strategies.