Whether Apple, Coca-Cola, HP or Kraft Heinz, Warren Buffett has a weakness for US brands that are successful across the world. Alongside such prominent stocks, the portfolio of Berkshire Hathaway, the star investor\u2019s holding company, has always included shares that enjoy less focus in the global economy and stock markets. They include a quintet from Japan that Buffett discovered for himself just under three years ago. On his 90th birthday in August 2020, he invested in Itochu, Mitsubishi, Mitsui, Sumitomo and Marubeni for the first time. These are the largest trading houses in Japan. By travelling to the Far East in April, Buffett leant weight to his convictions about the \u201cSōgō Shōsha\u201d companies. It was announced at practically the same time that Berkshire Hathaway had increased its stake in each of the five stocks to 7.4%.<\/p>\n
In taking this step, the legendary value investor gave wings to the Tokyo stock market in general and its local equities in particular. The same applies for Mitsubishi Corporation (MC): over the course of a month, the capitalisation of Japan\u2019s largest retail company increased by 18%. Founded in 1954, the company is a model example of Japan's \u201cSōgō Shōsha\u201d. \u201cMC has ten business groups that operate across virtually every industry,\u201d says the group\u2019s website. The spectrum of activities extends from natural gas and industrial metals through chemicals, infrastructure and mobility to foodstuffs, power stations and urban development. At the end of 2022, the conglomerate numbered more than 1,700 subsidiaries and equity investments. Almost 80,000 people in total work for MC.<\/p>\n
In May CEO Katsuya Nakanishi set out medium-term goals. Under the \u201cMidterm Corporate Strategy 2024\u201d, he is aiming for a double-digit percentage return on equity (ROE) and \u2013 regardless of market fluctuations \u2013 would like net earnings to increase constantly. \u201cThis is to be achieved by maintaining a sound profit base while investing in energy transformation, digital transformation and other growth areas,\u201d Nakanishi stated. The focus of investment is on the energy transition, with MC looking to put the equivalent of some USDbn 8.6 into this sector in the 2022 to 2024 planning period. Among other areas, the company is investing in the raw materials for batteries. The \u201crenewables\u201d sector already accounts for around 30% of the business portfolio. The CEO wants to see this share rise to 40% by the 2024 fiscal year. Going forward, he sees half of MC as a specialist in regenerative energy sources.<\/p>\n