Key Facts
• July 2025: Keyence’s operating profit margin reached 51.9%, leading domestic manufacturers.
• Cash and securities totaled ¥2.7 trillion by Q1 2025, tripling in 10 years.
• Shareholder return ratio was 21%, far below the Nikkei average of 57%.
• June 2025: CEO Yu Nakata’s reappointment approval dropped to 77.06% from 82.73%.
• Keyence’s stock underperformed, falling 17% in the past year, while TOPIX rose 18%.
• Analysts suggest Keyence needs bold actions like share buybacks to regain market favor.
• Average employee salary at Keyence is ¥20.39 million, far above Japan’s average of ¥4.6 million.
• Nintendo and Shin-Etsu Chemical face similar shareholder concerns over cash reserves.
• 262 TOPIX-listed companies are classified as “cash-rich,” with 135 having a PBR over 2x.
• Growth stocks, including Keyence, lag behind value stocks in recent market performance.
Summary
Keyence, a leading Japanese automation sensor company, is under growing shareholder pressure to improve financial returns. Despite its high profitability, with a 51.9% operating margin in 2025, its shareholder return ratio of 21% lags behind the Nikkei average. Investors are concerned about its ¥2.7 trillion in cash and securities, which has tripled over a decade. Analysts argue that Keyence’s financial strategy, including limited shareholder returns, is no longer acceptable. Similar issues are seen at Nintendo and Shin-Etsu Chemical. While Keyence’s growth and profitability remain strong, its stock has underperformed, dropping 17% in the past year. Analysts suggest bold actions like share buybacks are needed to reverse market sentiment. The broader market trend shows growth stocks underperforming value stocks, emphasizing the need for financial strategy adjustments.
