Japan Quant Strategy MLCCs and supply bottleneck effect: Next candidates, momentum positions, and tailwind from long-term investors’ shift to Japan

研报英文原文证据摘录

Japan Quant Strategy MLCCs and supply bottleneck effect: Next candidates, momentum positions, and tailwind from long-term investors’ shift to Japan

ect a pattern in which these long-

term investors begin buying once a price correction has cooled the overheated market. In

addition, global active funds are continuing a rotation that reduces China's weighting in their

regional allocations and shifts it toward Japan, South Korea, and Taiwan as part of their

broader investment strategy. From a relative perspective as well, growth sectors such as

Japanese electrical equipment look well-positioned to benefit from this shift. From this

perspective as well, we think that Japan’s bottleneck-related stocks, such as MLCC makers,

have characteristics that are easy to sustain once momentum is maintained. However, given

their high Beta and low Quality, investors should be aware that corrections during cool-down

periods tend to be both rapid and severe. On the other hand, when considering taking profits

on MLCC-related companies, it could be appropriate to measure the situation based on three

factors: the position of the upstream semiconductor and manufacturing equipment cycles, the

allocation of long-term overseas capital, and the rise of the next bottleneck-related sector.

Figure 1: Similar patterns seen in the AI Boom and the EM Boom (example Figure 2: Similar patterns seen in the AI Boom and the EM Boom (example

of Japanese stocks) – The same behavior seen in current MLCC-related of Japanese stocks) – The “bottleneck cascade effect” during the EM

stocks also occurred among bottleneck stocks during the EM boom boom subsequently shifted its main focus to ocean freight rates

Source: Bloomberg Finance L.P., J.P. Morgan Global Markets Strategy Source: Bloomberg Finance L.P., J.P.