Noritsu Koki Co., Ltd.
Noritsu Koki Co., Ltd. engages in the manufacture and sale of environment solution, kitchen, and photo processing equipment. It operates through the following segments: Monodzukuri, Health Care, Drug Discovery, Senior Life, Agricultural Food, and Others. The Monodzukuri segment handles research, development, production, and sale of pens and cosmetic parts. The Health Care segment provides radiology services, survey data, and genetic testing. The Drug Discovery segment provides research, development and sale of biopharmaceuticals. The Senior Life segment handles publication and mail order services for seniors. The Agricultural Food segment produces and sells fresh vegetables. The Others segment handles investigation and investment of new growth areas. It also offers mail order for dental materials and development and sale of drug treatment database for insurance companies. The company was founded by Kanichi Nishimoto in June 1951 and is headquartered in Tokyo, Japan.
COMMENTARY
Market review
Global equity markets fell sharply in March as the escalation of the US-Iran conflict, culminating in the effective closure of the Strait of Hormuz, triggered the most violent repricing of energy markets in decades. US equities declined around 5%, while European and emerging market equities dropped more steeply. Brent crude rose over 60%, its largest monthly move since the 1970s.
The sell-off was broad but not uniform. Energy was the sole sector to finish higher, benefiting directly from the supply disruption. All other sectors finished lower, with technology and growth-oriented names hit hardest as risk appetite deteriorated sharply across global markets and shorting activity increased.
The rotation toward value and hard assets accelerated. Capital shifted from software and asset-light models toward commodity-linked and infrastructure exposures, adding urgency to the factor dynamics observed in recent months.
Central banks held firm despite the dislocation. The Federal Reserve maintained rates at 3.75%, preserving its outlook for one cut in 2026. The European Central Bank also held but signalled possible hikes as inflation projections rose, while the Bank of Japan left the door open to near-term tightening. A weaker Australian dollar partially offset currency headwinds present in prior months.
The speed of the repricing underscored the fragility of consensus heading into the second quarter, with energy supply risk now embedded as a structural rather than transient consideration.
Portfolio Commentary
The Fund held up better than its benchmark in March, as energy-linked holdings and a defensively positioned portfolio provided a degree of insulation during a month of severe dislocation. Several positions with direct or indirect exposure to energy infrastructure were among the primary drivers of relative outperformance.
Among the strongest contributors was Gaztransport et Technigaz, the French designer of membrane containment systems for LNG carriers, which reached an all-time high as the Strait of Hormuz crisis placed LNG infrastructure at the centre of global energy security concerns. The company holds a near-complete market share in its niche, and its royalty-based model continues to deliver exceptional incremental margins.
Nextpower, a US-based solar infrastructure company, also rallied to record levels as the energy crisis reinforced the structural case for domestic energy independence. A record backlog of over five billion dollars, strong US revenue growth and expanding gross margins demonstrated pricing power despite ongoing tariff headwinds.
Clarkson, the world’s largest shipbroker, advanced as the conflict drove shipping rates well above prior-year averages, expanding commission pools across its broking division. Strength in the financial division, which delivered record operating profit in the prior year, confirmed a higher earnings floor than previous cycles.
Detractors included ChemoMetec, the Danish cell counting instrument maker, which fell sharply after cutting revenue guidance for the third consecutive time. Management cited prolonged US customer caution and longer-than-expected validation timelines, with the revised outlook implying low single-digit organic growth versus an original target of nearly 20%. We exited the position given repeated guidance misses and the structural nature of headwinds facing the company’s growth platform.
Daktronics, the US LED display manufacturer, also weighed on performance as tariff-related margin pressure persisted, with operating margins falling well short of long-term targets. We continue to hold the position into the upcoming Investor Day where the new CEO will outline the strategic framework.
Portfolio activity was limited during the month, with no new positions initiated. Beyond ChemoMetec, we exited Vita Coco, the US coconut water brand, to crystallise gains. Turnover was modest, reflecting our preference to hold quality businesses through periods of macro-driven volatility rather than react to short-term dislocations.
Overall, the portfolio remains concentrated in high-quality small-cap companies with durable competitive advantages. The energy shock has reinforced the benefits of owning businesses with structural demand tailwinds, and the restraint in activity during March reflects our confidence in the underlying holdings.