High Growth Tech Stocks in Japan for October 2024

Simply Wall St · 10/16 20:05

Japan's stock markets have seen a positive trend recently, with the Nikkei 225 Index gaining 2.45% and the TOPIX Index rising by 0.45%, supported by yen weakness which has bolstered the profit outlook for exporters. In this context of favorable market conditions, identifying high-growth tech stocks involves looking at companies that are well-positioned to leverage technological advancements and capitalize on both domestic and international demand, while navigating economic indicators such as real wage trends and currency fluctuations.

Top 10 High Growth Tech Companies In Japan

Name Revenue Growth Earnings Growth Growth Rating
Material Group 17.82% 28.74% ★★★★★☆
Hottolink 50.99% 61.55% ★★★★★★
f-code 22.70% 22.62% ★★★★★☆
eWeLLLtd 26.52% 27.53% ★★★★★★
Medley 24.98% 30.36% ★★★★★★
Bengo4.comInc 20.76% 46.76% ★★★★★★
Kanamic NetworkLTD 20.75% 28.25% ★★★★★★
Mental Health TechnologiesLtd 27.88% 79.61% ★★★★★★
ExaWizards 21.96% 75.16% ★★★★★★
Money Forward 21.04% 68.45% ★★★★★★

Click here to see the full list of 120 stocks from our Japanese High Growth Tech and AI Stocks screener.

Here's a peek at a few of the choices from the screener.

GMO internet group (TSE:9449)

Simply Wall St Growth Rating: ★★★★☆☆

Overview: GMO Internet Group, Inc. is a global provider of diverse internet services with a market capitalization of ¥274.07 billion.

Operations: The company generates revenue primarily from its Internet Infrastructure, Internet Finance, and Internet Advertising and Media businesses, with the Internet Infrastructure segment contributing ¥177.49 billion. The Internet Finance Business adds ¥44.04 billion to revenue, while the Advertising and Media segment accounts for ¥34.54 billion.

GMO Internet Group, a contender in Japan's tech scene, has demonstrated robust financial performance with earnings soaring by 284.6% last year, outpacing the IT industry's growth of 10.1%. This surge is supported by a strategic focus on R&D investments and shareholder returns through aggressive share repurchases totaling ¥3.4 billion for 1.34% of its shares this year alone. Despite forecasts suggesting slower revenue growth at 8.2% annually compared to the market's expectation of over 20%, GMO continues to innovate and expand its market presence. The company’s commitment to innovation is evident from its R&D spending trends which are integral to sustaining long-term competitiveness in evolving tech landscapes. Future prospects look promising with projected annual earnings growth of 15%, surpassing the Japanese market average of 8.8%. This growth trajectory is further bolstered by recent expansions in their buyback program, reflecting strong confidence in their operational stability and ongoing value creation for shareholders.

TSE:9449 Earnings and Revenue Growth as at Oct 2024
TSE:9449 Earnings and Revenue Growth as at Oct 2024

Kadokawa (TSE:9468)

Simply Wall St Growth Rating: ★★★★☆☆

Overview: Kadokawa Corporation is a Japanese entertainment company with a market capitalization of ¥459.73 billion, engaging in various sectors such as gaming, publishing, web services, animation/film, and education/edtech.

Operations: Kadokawa generates significant revenue from its publishing segment, contributing ¥143.28 billion, followed by animation/film at ¥46.36 billion and gaming at ¥28.63 billion. The company's diverse operations across these sectors highlight its broad engagement in the entertainment industry in Japan.

Kadokawa, in Japan's competitive tech landscape, has shown promising growth dynamics with earnings expected to surge by 21.6% annually. This growth is underpinned by a strategic emphasis on R&D, where the company allocates significant resources—evident from an increase in R&D expenses aimed at fostering innovation and maintaining a competitive edge. Despite revenue projections growing at a slower pace of 6.7% annually, below the industry expectation of over 20%, Kadokawa's commitment to research could catalyze new developments and market expansion. The firm recently enhanced shareholder value through share repurchases, reflecting confidence in its financial health and future prospects.

TSE:9468 Revenue and Expenses Breakdown as at Oct 2024
TSE:9468 Revenue and Expenses Breakdown as at Oct 2024

Fuji Soft (TSE:9749)

Simply Wall St Growth Rating: ★★★★★☆

Overview: Fuji Soft Incorporated is an IT company with operations in Japan and internationally, and it has a market capitalization of ¥605.14 billion.

Operations: Fuji Soft generates revenue primarily from its SI Business segment, which contributed ¥290.11 billion. The Facility Business adds a smaller portion with ¥3.42 billion in revenue.

Fuji Soft, amidst Japan's tech evolution, is poised for notable growth with a projected earnings increase of 21.7% annually. This surge is supported by strategic R&D investments which have grown to represent a significant portion of their budget, aligning with industry shifts towards digitalization and AI integration. Recent acquisition interest from Bain Capital and KKR highlights its market potential and strategic value, suggesting robust future prospects in the evolving IT landscape. These developments reflect both the company’s innovation drive and its attractiveness to global investors aiming to capitalize on Japan's tech advancements.

TSE:9749 Revenue and Expenses Breakdown as at Oct 2024
TSE:9749 Revenue and Expenses Breakdown as at Oct 2024

Key Takeaways

  • Take a closer look at our Japanese High Growth Tech and AI Stocks list of 120 companies by clicking here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.