2015 All-Japan Research Team: Plant Engineering & Shipbuilding, No. 2: Masanori Wakae

Masanori Wakae

Mizuho Securities Group

First-place appearances: 0

Total appearances: 9

Analyst debut: 2007

Masanori Wakaeof Mizuho Securities Group holds on to the No. 3 position he first earned in 2013, winning investor plaudits for his expertise as well as his excellent communication skills and client service. “He always makes himself available,” reports one supporter. “Whenever I need to know something, he gets back to me right away, and his answers are always on point.” One of Wakae’s favorite companies is Tokyo-based integrated industrial manufacturer Sumitomo Heavy Industries. He is forecasting that operating profits at Sumitomo will reach ¥50 billion ($416.5 million) for the fiscal year that ended last month, up from ¥34.3 billion in the year-earlier period, thanks mainly to profit margin gains in its mass-production machinery segment resulting from new products. Over the next year, the analyst believes, the heavy machinery operations will see similar improvement on the strength of structural reforms that management has been trumpeting. He also projects that Sumitomo will attain its operating profit goal of ¥52.5 billion by fiscal 2017, a year earlier than its stated target. On the other hand, the researcher is decidedly bearish on Mitsui Engineering & Shipbuilding, also headquartered in Tokyo, expecting the stock to underperform. Although the yen’s depreciation ought to be providing a tailwind for new shipbuilding business, “profitability has deteriorated,” reports Wakae, 47. In addition, Mitsui Ocean Development & Engineering Co., a subsidiary known as MODEC, “faces an uncertain business environment due to falling crude oil prices,” he advises. “The possibility that weak crude oil prices might prompt a reconsideration of plant projects needs to be taken into account.”