Hitachi shares hit 20-year high as IT shift bears fruit
Hitachi is looking to transform itself from an industrial conglomerate to a services-driven company. © Reuters
YOICHIRO HIROI, Nikkei staff writer | Japan
TOKYO — Hitachi shares reached a roughly 20-year high in Tokyo trading on Friday, buoyed by forecasts that the company is headed toward a record net profit for the second year in a row for the 12 months ending March 2022.
The issue gained as much as 2% to 5,536 yen at one point before ending the session at 5,505 yen.
Since suffering a 787.3 billion yen ($7.23 billion) net loss in fiscal 2008 amid the global financial crisis, Hitachi has been shifting its focus toward information technology services. Market watchers believe that shedding noncore operations is bolstering the company’s profits.
The company announced this year that it will buy GlobalLogic, a U.S. digital engineering services company, for an estimated $9.6 billion. It has also decided to sell Hitachi Metals, a listed unit once considered to be among the group’s three crown jewels.
“Investors are responding positively to Hitachi’s structural reforms and the growth in its IT operations,” said Kota Ezawa at Citigroup Global Markets Japan.