Kurita: Water services expert with improving margins and benefiting from reshoring of semiconductor production

A water treatment expert providing resilience, diversified growth, a margin uplift story thanks to higher value added services and potential upside from semi reshoring in the West

Welcome to the 12th investment case and 11th resilience, 6th reshoring/sovereignty & 3rd China idea on Crack the Market (and the most comprehensive Kurita investment case you will find online)! Join me as I dissect a semiconductor/industry water treatment services company looking to unlock better profitability with ultra pure water/tool cleaning in electronics and CSV/environmental benefits in industry/chemicals.

Twice a week, I will release deep dives into stocks and sectors that fit into the three themes that I see winning in this age of tariffs and deglobalization: resilience, sovereignty & reshoring, China. I will then deep dive into the opportunities in the AI data center value chain.

Take advantage of this once in a generation opportunity to build long term wealth by investing in great stocks that will deliver returns for your portfolio for years to come.

You can already read my first 11 deep dives, all of which I see as winners in this new world of tariffs and deglobalization:

• ASML (reshoring & China idea): The most innovative company in the world will 2.5x its EPS by 2030.

• LKQ (resilience idea): The most defensive business in the auto industry is a tariff winner and could become a compounder.

• Atlas Copco (resilience & reshoring idea): The best industrials business in the world is on sale, extremely resilient and will benefit from US reshoring.

• Badger Meter (resilience idea): The perfect business in the perfect end market, water meters are the definition of resilience.

• Knorr Bremse (resilience idea): Who knew making brakes was this lucrative? Rerating with self help story and upside from German infra plan.

• Flex (reshoring idea): The electronics manufacturing giant building Nvidia’s servers and enabling reshoring is becoming a better business.

• Itron (resilience & reshoring idea): Riding the grid investment super cycle and enabling smart grids.

• Roper (resilience idea): A resilient cashflow compounder in the software space with inflecting growth.

• RELX (resilience idea): The company to own forever – one of the very best businesses on Earth.

• CPKC (resilience & reshoring idea): The rail connecting Canada/US/Mexico and benefiting from reshoring.

• Novo Nordisk (resilience idea): The most exciting pharma company in the world is misunderstood and its growth engine is ready to roar back to life.

After reading this article, you will understand why this company is so special thanks to a water services expertise, what it does, why it is so defensive with an improving quality profile, why it has just reset expectations, why it could be a beneficiary of semiconductor production in the West and why it is a strong business to own for the next decade.

Kurita is an expert in water treatment services to the electronics industry and general industry. The company is very service oriented (80% of sales) giving it a defensive quality. Kurita has particular strengths in waste water, reclamation and tool cleaning in the Electronics space with selective strengths in ultra pure water supply depending on the country and is trying to gain new customers which could accelerate given the semiconductor production reshoring in the West (like TSMC in EU/US). On the industry/chemicals part, the penetration of a new business, model called CSV (blending economic and environmental benefits for customers) is driving better profitability.

In this article I go through:

1. Kurita’s unique expertise helping businesses manage their water needs and improve their environmental footprint.

2. How the company is steadily improving its quality and margins thanks to an improving mix and new higher value added business models gaining traction.

3. Why its resilient and diversified business model with many growth drivers make it an attractive holding in an uncertain macro environment.

4. How the company could benefit from the push to bring back semiconductor manufacturing to the West thanks to its unique water services expertise in the space.

Kurita Investment Case