Must Reading for Investors in ORIX Corp

David Line of CFO Asia published a lengthy piece, typical of CFO Magazine, on ORIX Corporation (IX) but as is usually the case with CFO, the article was full of nuggets of valuable information and quotes. Even if you don't invest in ORIX directly there's a good chance you own shares by proxy if you invest in a Japan-related investment fund since ORIX has the highest rate of foreign investor ownership among all Japanese stocks.

The article (click here to access directly) is 8-screens long so I have only extracted some quoted statements of ORIX CFO Shunsuke Takeda. If you are considering investing in ORIX then this article is a great start for your research. There are a number of equity and credit analysts' comments throughout the article. ORIX's diversification strategy and its aim to maintain high profit margins are given thorough attention.

Note that ordinary shares of ORIX trade in Tokyo under code: 8591. It closed at 32,400 yen ($139.66 ADR equivalent fluctuating with exchange rate) up 0.78% in Friday trading. Two of its ADRs equal 1 ordinary share. As the article explains, ORIX is rated highly by the S&P for its corporate governance and also receives high credit ratings from S&P and Moody's.

Be forewarned as the article explains in the first page or so that ORIX has an equity arrangement with the investment fund that was formerly managed by activist Yoshiaki Murakami, who has been arrested on securities law violations related to insider trading.

Quoted statements by ORIX CFO Shunsuke Takeda:

We are subject to Japanese regulations, various US SEC requirements, and at the same time the Sarbanes-Oxley Act. So we are different from most other Japanese companies. We have a more extensive regulatory environment. This gives us a unique corporate-governance structure.

Our foreign shareholders regard Orix as a growth company. I as CFO have to take such initiatives to maintain a good balance between profitability, financial stability, and growth.

If we wish to improve this [ratio (~5:1 debt-to-equity)] further, we could. But achieving a lower ratio might jeopardize our growth strategy.

I am not personally satisfied with our level of [credit] ratings. But I think at the same time we should not necessarily achieve triple-A. Maintaining a triple-A rating is sometimes a trade-off between growth strategies and stability.

Orix is a very unique Japanese company. We're atypical in that we've been pursuing growth strategies, not reducing or downsizing our operations in an adverse economic environment.

Click here to visit ORIX's Investor Relations website.

ORIX Corp (IX) 1-year chart [08/18 intra-day A.M.]: