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Investing.com – Morgan Stanley recently selected five leading stocks in Japan’s IT and software sector, focusing on companies that can capitalize on the digital transformation trend and enterprise technology needs.

This list highlights companies that have strong profit-growth potential and a solid market position across various technology sub-sectors.

1. NRI - Morgan Stanley assigns the stock a “Buy” rating, expecting its three-year EBITDA compound annual growth rate to reach 11%, mainly driven by business platform services.

The company has established a business platform model, which gives it an advantage as an industry-standard infrastructure provider, and it also offers a comprehensive service framework in the security domain.

2. NEC - Rated as “Buy,” with an expected three-year EBITDA compound annual growth rate of 10%. As one of Japan’s largest IT and software providers, NEC delivers top-tier solution capabilities and has differentiated advantages in areas such as security and defense, supported by its unique and strong technological asset base.

In its recent announcement, NEC reported third-quarter earnings per share of 52.09 yen, beating analysts’ expectations.

3. Fujitsu - Morgan Stanley gives the “Buy” rating, with an expected three-year EBITDA compound annual growth rate of 16%.

The company has Japan’s largest engineering team, maintains an outstanding track record in industrial and social infrastructure, and provides industry-leading IT solution capabilities.

4. OBC - Rated as “Buy,” with an expected three-year EBITDA compound annual growth rate of 13%. As a top ERP provider for small and medium-sized enterprises, OBC benefits from structural back-office digital transformation trends.

Growth is driven by an increase in Bugyo Cloud penetration and growth in average revenue per user, while more than 80% of its recurring revenue share provides stability and support.

**5. Otsuka **- Morgan Stanley gives the stock a “Buy” rating, expecting its three-year EBITDA growth rate to be 10%.

The company’s medium-term growth outlook is driven by capturing small and medium-sized enterprise digital transformation needs through a one-stop solutions model. This model covers nearly all products required for office operations, giving it a unique advantage in capturing accelerating digital transformation needs of small and medium-sized enterprises.

This article is translated with the assistance of artificial intelligence. For more information, please see our Terms of Use.

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