This article reviews METAWATER and Kurita Water Industries from the perspective that the nature of their US exposure differs. On 29 October, both companies revised their full-year forecasts, and their subsequent market reactions also diverged.
METAWATER provides an integrated service covering the design, construction and operation of mechanical and electrical equipment for water purification and sewage treatment plants, with local governments nationwide as its main customers. Its interim report explicitly states that domestic public-sector projects account for most of its sales, and its possession of both mechanical and electrical capabilities is regarded as a strength.
Kurita Water Industries lowered its full-year operating profit forecast, citing increased additional costs for construction projects serving the North American electronics industry. By contrast, METAWATER raised its full-year earnings and dividend forecasts on the same day. In the market reaction from the following day onward, Kurita Water Industries fell to the limit-down range, while METAWATER at times reached the limit-up level.
The article points out that US exposure cannot simply be avoided, but that METAWATER's strong overseas order intake, despite having a US subsidiary, was one reason for its upward revision. It explains that the impact of US exposure varies depending on the nature of each stock.