Is ORIX Corporation (IX) the Best Japanese Stock to Buy in 2025?

ORIX Corporation (IX), a leading Japanese financial services group, has been making waves in the market with its impressive financial performance and strategic focus on capital recycling and asset monetization. As we look ahead to 2025, investors may be wondering if ORIX is the best Japanese stock to buy. Let's examine the company's recent performance, strategic initiatives, and future prospects to help make an informed decision.

Strong Financial Performance

ORIX reported consolidated financial results for the nine months ended December 31, 2024, with revenue increasing by 5.4% year-over-year to ¥2.15 trillion. Net income attributable to ORIX Corporation shareholders grew by 24.0% to ¥271.77 billion, reflecting the company's strong earnings growth. The company's return on equity (ROE) improved to 9.2% from 8.4% in the same period in 2023, indicating that ORIX is effectively utilizing its shareholders' investments to generate profits.



Capital Recycling and Asset Monetization

ORIX's strategic focus on capital recycling and asset monetization has been a significant driver of its growth and resilience. In 2024, the company successfully implemented this strategy by realizing capital recycling of ¥5,200 billion and investing ¥6,200 billion in key projects and sectors such as aircraft, sea, and overseas renewable energy. This approach has allowed ORIX to maintain a strong financial position and adapt to changing market conditions.

Looking ahead to 2025, ORIX plans to continue its capital recycling strategy, with a global project pipeline of approximately ¥7,500 billion. The company will make investment decisions based on a thorough assessment of project profitability, liquidity, and exit strategies. This disciplined approach to capital recycling and asset monetization will enable ORIX to generate value for shareholders while maintaining its financial strength and flexibility.

Sustainability and ESG Principles

ORIX's commitment to sustainability and ESG principles has also influenced its business operations and financial performance. The company has identified ESG-related material issues and established key goals to address them, proactively working to strengthen governance and tackle climate change risks and social risks, including human rights. This commitment is reflected in the company's Integrated Report, which highlights its progress in addressing sustainability and sustainability-related issues.

One of the key ways ORIX has demonstrated its commitment to sustainability is through its approach to diversity and inclusion. The company has established policies to ensure diversity in appointing core personnel and has implemented measures to create an inclusive and equitable working environment that promotes flexible working styles and provides career development support, fair performance review and compensation schemes, and employee health support systems. This focus on diversity and inclusion has likely contributed to the company's strong financial performance, as a diverse workforce can bring a wider range of skills, experiences, and perspectives to the table, driving innovation and better decision-making.

Future Prospects

As we look ahead to 2025, ORIX Corporation's strong financial performance, strategic focus on capital recycling and asset monetization, and commitment to sustainability and ESG principles position the company well for continued growth and success. With a global project pipeline of approximately ¥7,500 billion and a disciplined approach to investment decisions, ORIX is well-equipped to generate value for shareholders and maintain its financial strength.

In conclusion, ORIX Corporation (IX) is a strong contender for the best Japanese stock to buy in 2025. Its impressive financial performance, strategic initiatives, and commitment to sustainability and ESG principles make it an attractive investment option for investors seeking steady growth and value creation. As the company continues to execute its strategic plan and adapt to changing market conditions, it is well-positioned to deliver strong returns for its shareholders in the coming year.