全球日本：尚未被定价的创新与增长阿尔法

Global Japan: Innovation and growth alpha yet to be priced-in Japanese companies are entering a new phase of global relevance, leveraging superiorquality and innovation, increasingly relevant international brand propositions to deliver broadbased international earnings growth. Rupal Agarwal+65 6326 7641rupal.agarwal@bernsteinsg.com Corporate Japan going global:Number of companies getting more than 51% of theirrevenue outside Japan ie. global have increased from 34% in 2018 to 47%/44% in2024/2025. While Japan Autos, Tech Hardware, Cap Goods and Materials always hadmore global oriented companies, over the years more of Japan Semis, Pharma, HealthcareEquipment, Food Beverage & Tobacco and Consumer have joined the cohort. Pharma/Healthcare moved from c.20% global companies in 2017 to 100% by 2024 and consumerdurable reached 80%. For Household & Personal Products it increased from 33% to67%, Media & Entertainment from 18% to 50%, F&B from 20% to 83%, Commercial &Professional Services and Consumer Discretionary Distribution from 0% to c.50%. Cheng Zhang, CFA, CQF+852 2123 2636cheng.zhang@bernsteinsg.com Global Japan, long-term winner vs. domestic Japan and opportunity for moreinnovative/high growth/high quality exposure:Since 2018, a portfolio of globaloriented Japanese companies has generated 5% CAGR vs. 4% CAGR by domestics. EvenYTD, global Japan portfolio is up 15% vs. domestic cohort up 4%. The global cohort tendsto give higher exposure to innovative, high growth and high quality companies with median3yr earnings growth expectations/ROIC of 37%pa/21% vs. 24%pa/16% for the domesticpool. We believe, expansion outside of Japan, opens up higher earnings growth marketssuch as US, India, Korea, Taiwan for Japanese companies. Japan innovation, a source of alpha but markets not pricing it in:While China/TW areahead of Japan in innovation as measured through R&D to sales, Japan is ahead of both USand Europe. However, Japan (16x fwd. PE) continues to trade at a discount to US/TW/IN(21x) and even TH (17x). Japan Healthcare Equipment & Services, Media & Entertainmentand Consumer Services are trading at a premium to their US/EU peers, justifiably so,given higher innovation and growth profile. However, industries like Consumer Durables &Apparel and Consumer Services which are better on both innovation and growth are stilltrading at a discount while the more innovative Japanese F&B industry is trading in line withEU/US. We also believe, Japan Pharma, Materials, Energy, Retailing and Insurance shouldcommand some premium given their better growth profile vs. similar industries in EU/US.Over the past 10yrs, portfolio of highly innovative companies in Japan has generated 7%annualized alpha and with more Japanese companies turning global, investors can getaccess to higher innovation exposure.Screen in Exhibit 15. Japan growth, another alpha at discount:In the last 10yrs, growth stocks in Japanhave generated 3.4%pa-3.8%pa alpha. Japan growth has been a simple case of takingless risk and getting less returns. However, on risk-adjusted basis, Japan GARP leads withinformation ratio of 0.7-0.75 in last 5-10yrs vs. US GARP at 0.4-0.9 and EU GARP at lessthan 0.3. Japan growth has always traded at a deep discount - US growth comes at thesteepest price, 50% 3yr EPS CAGR growth at 35x-45x fwd. PE while Japan offers lowergrowth of c.30% growth but at 10x fwd PE(India offers same growth at 30-35x fwd. PE).Currently, Japan growth/GARP is attractively valued at 0.76/0.73 PEG.We show globalJapan companies which are innovative & high growth in Exhibit 21. DETAILS JAPANESE COMPANIES ARE GOING GLOBAL Over the past 5yrs there has been a big shift in how Japanese companies are operating, and we see more and more of corporateJapan extracting their revenues outside of Japan. % of global companies in Japan ie. the ones having greater than 51% revenueoutside Japan has increased from 34% back in 2018 to 47% in 2023,2024 and 44% in 2025. This opens up a much broaderinternational earnings growth as a platform for Japanese companies to grow sustainably. Back in 2017, Autos, TechnologyHardware, Cap Goods and Materials had the most number of global companies. By 2025, participation from Cap Goods &Materials in global oriented portfolio is still high, though Auto’s global presence has declined somewhat. There is now higherrepresentation from Semis, Pharma, Healthcare Equipment, Food Beverage & Tobacco and Consumer Discretionary in theglobal oriented pool. (Exhibit 1-Exhibit 2) Industry specific change:Looking at what % of each industry had global vs. domestic oriented companies, we note thatindustries like Semis, Autos, Technology Hardware have always had a majority of companies generate sales outside of Japanbut industries like Pharma, Healthcare, Consumer Durables & Apparel have become more global over the years. Roughly85-100% of companies in Semis, Tech Hardware were global back in 2017 which has further increased to 100% acrossboth sectors by