Hedge fund managers pitched a range of Japanese companies from machinery makers to software providers at the inaugural Sohn Tokyo Investment Conference on Friday.

The forum took place at a time of increased enthusiasm for Japanese stocks, which reached a record earlier this year. Inflation has boosted pricing power, and companies have been looking at ways to improve shareholder returns in response to efforts from authorities.

Hideki Kinuhata, chief investment officer of Silq Capital Co., touted Makino Milling Machine Co., saying the Japanese manufacturer is trading at an attractive valuation after fending off takeover attempts.

“Makino is no longer the sleepy traditional Japanese company that it was,” Kinuhata said. “It is razor-focused on profitability and growth.”Kinuhata said Makino’s main earnings driver is aerospace, where demand has broadened from commercial aviation to space, satellites and defense. He expects earnings to grow 80% over the three years to March 2028.

Riho Yokozawa, a portfolio manager at Japan Catalyst Inc., pitched OBIC Business Consultants Co. She said the accounting software company has growth prospects that are not yet reflected in the share price.

Yokozawa expects OBIC’s revenue to expand about 80% in the next few years, helped by strong pricing power. It managed to raise prices even after concerns about the threat from artificial intelligence became widespread in the industry, she said.

She wasn’t the only one to highlight software companies at the event, the first such gathering in Tokyo in support of the Karen Leung Foundation.

Marc Wallach, a partner and portfolio manager at Ruane Cunniff, vouched for Money Forward Inc., a developer of financial planning apps. He said Japan is a uniquely profitable market for software, and he expects Money Forward to generate much better margins in the future.

The Tokyo-based company is “a resilient software franchise with a long growth runway ahead,” including the potential for operating margin to reach 30% and earnings to expand as much as 25% a year, Wallach said.

TriVista Capital Inc. CIO Masaki Gotoh sees potential in Harmonic Drive Systems Inc., a maker of speed reducers for use in industrial robots. The company’s technology “basically drove the industrial robot revolution,” and can be used for the next revolution: humanoids or physical AI, he said. Not all the pitches were about Japan.

Thea Jamison, founder of Change Global Investment, said PT Telkom Indonesia is undervalued and investable, citing the country’s capital market reforms. She spoke as Indonesian stocks fell the most in 28 years after MSCI Inc. warned the nation’s emerging-market status was in jeopardy.

But Telkom already fulfills MSCI’s requirements, having implemented a plan to streamline the business and unlock value, according to Jamison. With a dominant domestic market share, the stock has a roughly 90% upside, she said.

Eduardo Marques, CIO at Pertento Partners, gave contrasting assessments on two South Korean groups. He favors industrial company Hanwha Corp. and its aerospace unit, and is bearish on manufacturer Ecopro Co. and Ecopro BM Co.

In an era of elevated defense spending, Hanwha is essentially a “weapons factory” and its aerospace arm is “very cheap,” Marques said. The company has a 100% upside based in part on its earnings growth, he said. Ecopro, by contrast, is expensive and faces declining profitability, heavy debts and excess capacity, he said.

Japanese financial group Orix Corp. was the pick for Polymer Capital Management’s Daisuke Nakayama. Orix is “transforming from a company that simply holds assets into one that generates earnings through external capital and leverage,” the portfolio manager said. That could unlock a different kind of growth and lead to a higher valuation multiple for the stock, he added.

Soren Aandahl, CIO at Blue Orca Capital, named three companies that he expects to benefit from their “” stakes in Toshiba, the Japanese conglomerate that was bought out and delisted after an accounting scandal.

An initial public offering by Toshiba would generate potential windfalls for Rohm Co., Chubu Electric Power Co. and TRE Holdings Corp. that are material to their current market caps, even after taxes, he said. Toshiba has been a major success in turning around its business, with various operations tied to AI, such as energy and hard disk drives, he said.

Meanwhile, Oasis Management Co. founder Seth Fischer stepped up his campaign at Kusuri no Aoki Holdings Co. The activist investor has been trying for years to remove members of the Aoki family from their namesake drugstore operator.

Fischer said he will continue to demand an explanation from the company on stock options issued to the Aoki brothers.