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Matthews Japan Fund: New Buys

Holly LaFon

Holly LaFon

249 followers
Abenomics, the Bank of Japan’s quantitative easy and a weakening yen propelled the MSCI Japan Index up 27.35% for 2013. The Matthews Japan Fund (Trades, Portfolio) beat the index for the year, delivering a 34.03% return, primarily on the back of Japanese financial stocks. The firm continues to believe that Japan’s loose economic policy will be a net positive for the country’s fundamentals, saying in their fourth-quarter letter:

“The outlook for corporate earnings is strong and domestic loan growth has been accelerating. Additionally, higher U.S. interest rates prompted by the U.S. Federal Reserve’s tapering of bond purchases is likely to further weaken the yen. Although we believe Japan’s consumption Although we believe Japan’s consumption tax hike planned for April should pose significant challenges for growth over the following several quarters, we expect the Bank of Japan to implement further quantitative easing should the economy falter. In such an environment, we believe select Japanese companies could potentially experience more growth in both global and domestic markets. Finding such individual opportunities remains core to our strategy.”

In the fourth quarter, Matthews Japan Fund (Trades, Portfolio) added five new stocks to its $363 portfolio of 64 stocks.

The New Stocks

M3 Inc. (TSE:2413)

The firm purchased 2,152 shares of M3 Inc. in the fourth quarter, when the share price averaged 258,794 yen. The holding has a 1.5% portfolio weight, and the stock price has risen 17% from the average to 302,500 yen per share.

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M3 Inc. supplies medical information services for doctors through Internet.

M3 Inc. has a market cap of 487.35 billion yen; its shares were traded at around 3,02500.00 yen with a P/E ratio of 69.90 and P/S ratio of 15.50. The dividend yield of M3 Inc. stocks is 0.29%.

Rohto Pharmaceutical Co. Ltd. (TSE:4527)

The firm purchased 225,000 shares of Rohto Pharmaceutical Co. Ltd. In the fourth quarter when the share price averaged 1,507 yen. The holding is 0.95% of the portfolio, and the share price is up 9% from the average.

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Rohto Pharmaceutical Co. Ltd. manufactures and markets pharmaceuticals and cosmetics products.

Rohto Pharmaceutical Co. Ltd. has a market cap of 193.21 billion yen; its shares were traded at around 1,647.00 yen with a P/E ratio of 21.70 and P/S ratio of 1.43. The dividend yield of Rohto Pharmaceutical Co. Ltd. stocks is 0.98%.

ZENKOKU HOSHU Co. Ltd. (TSE:7164)

The firm purchased 75,800 shares of Zenkoku Hosho Co. Ltd. In the fourth quarter, when the price averaged 4,456 yen per share. The holding has a 0.92% portfolio weight, and the price has climbed 9% from the average.

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Zenkoku Hosho Co. Ltd. is a credit guarantee company. Zenkoku Hosho Co. Ltd. has a market cap of 169.22 billion yen; its shares were traded at around 4,840.00 yen. The dividend yield of Zenkoku Hosho Co. Ltd. stocks is 0.79%.

SUCCESS Holdings Company Limited (TSE:6065)

The firm purchased 130,000 shares of SUCCESS Holdings Company Limited in the fourth quarter, when the price averaged 1,1890 yen per share. The holding has a 0.64% portfolio weight, and the price has risen 3% from the average.

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SUCCESS Holdings Company Limited Provides nursing services for private and public nursery schools and related services for children. SUCCESS Holdings Company Limited has a market cap of 10.19 billion yen; its shares were traded at around 1,945.00 yen with a P/E ratio of 54.10 and P/S ratio of 1.23. The dividend yield of SUCCESS Holdings Company Limited stocks is 0.87%.

Oisix Inc. (TSE:3182)

The firm purchased 23,300 shares of Oisix Inc. in the fourth quarter when the price averaged $3,997. The holding has a 0.27% portfolio weight, and the share price has increased 4% from the average.

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Oisix Inc. is a natural and organic online food grocery in Japan. Oisix Inc. has a market cap of $23.35 billion; its shares were traded at around $4150.00 with a P/E ratio of 113.60 and P/S ratio of 1.43.

Matthews Japan Fund (Trades, Portfolio) commented on Oisix in its fourth quarter letter:

“ORIX, Japan’s largest non-bank financial company, appreciated substantially as valuations re-rated on the back of strong business performance. ORIX was among the Fund’s top holdings for both the year and the fourth quarter.”

 

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