⚠ A Profit Is Not a ReturnLow threat

ITOCHU (8001) — threat to the moat

Profitable is a lower bar than profitable enough.

A group company that makes a profit may still earn less than its hurdle rate. ITOCHU's framework uses about 70 business-specific hurdle rates1, and the profitable share2 does not say how many clear them.

Group companies' profit (¥ bn, years to March)791.82025782.62026ITOCHU results presentation, May 2026
Group companies earned slightly less in total.

The Food division's margin of about 1.8% on revenue3 shows how thin a profitable business's return can be.

The company's own ROI figure for its non-resource investments, 10%4, is the aggregate version of this test. It clears the 8% cost of capital, but not by a wide margin.

The measure is the share of group companies above their hurdle rate, which ITOCHU does not publish.

References
  1. ReportedITOCHU's framework uses about 70 business-specific hurdle rates, and the profitable share does not say how many clear them.
    ITOCHU Corporation, CFO message, Integrated Report 2026 - the cost of capital of approximately 8%, about 70 business-specific hurdle rates, and the aim to sustain ROE at the 15% level. — 2026 · publ. July 2026 · source ↗
  2. ReportedITOCHU's framework uses about 70 business-specific hurdle rates, and the profitable share does not say how many clear them.
    ITOCHU Corporation, FY2025 Business Results and FY2026 Management Plan - shareholder returns (dividends, buybacks and payout), ROE, leverage and share-price performance against TOPIX. — FY to March 2026 · publ. 14 May 2026 · source ↗
  3. Moat Explorer calcThe Food division's margin of about 1.8% on revenue shows how thin a profitable business's return can be.
    Moat Explorer calculation from ITOCHU's reported figures. Trailing twelve months to June 2026: net profit 900.3 - 283.9 + 293.8 = 910.1; revenue 14,823.1 - 3,558.9 + 3,875.9 = 15,140.1; EPS 128.00 - 40.10 + 42.02 = 129.92. Market value at 24 September 2026: 6,993,053,267 shares x ¥2,220.5 = ¥15.53 trillion. P/E at March year-end: market value over net profit, e.g. 13,802 / 900.3 = 15.3 (2026), 6,090 / 820.3 = 7.4 (2022), 3,046 / 500.5 = 6.1 (2019). Non-resource share of profit: 774.7 / (774.7 + 133.3) = 85%. Segment net profit over segment assets, year to March 2026: Machinery 155.6 / 2,603.5 = 6.0%; Metals & Minerals 143.5 / 1,793.4 = 8.0%; ICT & Financial 93.0 / 1,577.2 = 5.9%; Food 92.1 / 2,403.4 = 3.8%; Energy & Chemicals 69.3 / 1,819.4 = 3.8%; General Products & Realty 60.8 / 1,628.7 = 3.7%; The 8th 45.0 / 2,197.3 = 2.0%; Textile 43.3 / 751.9 = 5.8%. Segment net margin on revenue: Food 92.1 / 5,134.2 = 1.8%; Energy & Chemicals 69.3 / 3,069.6 = 2.3%; Machinery 155.6 / 1,500.6 = 10.4%; Metals & Minerals 143.5 / 1,231.5 = 11.7%. Berkshire's market value over cost: 8,886 / 4,165 = 2.13 times; dividend on cost 181 / 4,165 = 4.3%. Self-tender: 82,735,750 x ¥1,813 = about ¥150.0 billion. Net profit growth since the year to March 2016: 900.3 / 240.4 = 3.7 times. Dividend growth: 42.0 / 10.0 = 4.2 times (split-adjusted). ROE spread over the company's cost of capital: 14.6 - 8 = 6.6 points. Equity growth: 6,590.0 / 5,755.1 = 1.15. Stake in DENTSU SOKEN at the tender price: ¥215.2 billion for 38%. ACG profit target over investment: ¥50 billion is the aerospace target, about ¥310 billion the ACG investment. Berkshire's stake at ¥2,220.5: 704,799,500 x 2,220.5 = about ¥1.565 trillion. ITOCHU over Marubeni net profit: 900.3 / 543.9 = 1.66. 8% hurdle on the CSN Mineração additional investment: 0.08 x 119.2 = 9.5. 8% hurdle on ¥215.2 billion: about ¥17.2 billion. — FY to March 2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in ITOCHU's financial statements, results decks and market data; operands shown in the source line.
  4. ReportedThe company's own ROI figure for its non-resource investments, 10%, is the aggregate version of this test.
    ITOCHU Corporation, FY2025 Business Results and FY2026 Management Plan - resource and non-resource profit, equity production volumes and sensitivities. — FY to March 2026 · publ. 14 May 2026 · source ↗
Sources
Generated September 24, 2026