Sumitomo CorporationNarrow moat

8053 — overall economic moat

Investment snapshot
Narrow moat→ Holding steadyConfidenceMediumValuationCheap
Strongest advantageThe world's second-largest aircraft leasing platform, a wholly owned IT company and contracted power, after exiting its largest loss-maker
Greatest threatLeverage raised by the SCSK and Air Lease purchases, the Middle East conflict and a trillion yen of low-return capital
Key metricROE against the 12% target (12.9%)
Verdict: Sumitomo is the trading house that learned from its mistakes: it sold its Madagascar nickel stake, took SCSK private and bought into the world's second-largest aircraft leasing platform. Return on equity is back above 12%, but the moat is narrow because each business has a larger or equal rival, and debt rose by over a trillion yen to pay for the change. At under 14 times earnings it is the cheapest of Japan's big five, a discount that reflects losses the company has worked to leave behind.
📈 8053 valuation, revenue & earnings — P/E, P/S, revenue, EPS →

Sumitomo Corporation is a Japanese trading house, established in December 19191, that has spent the past decade changing what it owns. It has 327 consolidated subsidiaries, 192 equity-accounted companies and 82,488 employees in the group2. In the year to March 2026 its revenue was ¥7,337.3 billion and its net profit a record ¥600.3 billion3, up from ¥386.4 billion two years earlier4.

Net profit by segment, year to March 2026 (¥ bn)Energy Transformation — 17%Transportation & Construction — 15%Mineral Resources — 14%Diverse Urban Development — 14%Steel and Automotive — 23%Other segments — 18%Other: Media & Digital, Chemical Solutions, Lifestyle and corporate; Sumitomo results
No segment above a sixth.

The profit is spread across nine segments, none more than a sixth of the total: power and energy, leasing and construction equipment, mining, real estate, steel, cars, media and digital, chemicals, and food and retail5. Its largest positions include the world's second-largest aircraft lessor, held through a partnership6; SCSK, an IT services company it now owns outright7; overseas power plants; and half of JCOM8. Japan provides 38.7% of revenue and the United States 19.0%910.

It got here by leaving things. Its history includes net losses of ¥73.2 billion and ¥153.1 billion in the years to March 2015 and 202111, and repeated charges on the Ambatovy nickel project in Madagascar121314, which it agreed to sell in May 202615. Return on equity was 12.9% in the latest year16, against a target of 12% or higher17.

The market values it at about ¥8.5 trillion, 13.90 times trailing earnings, the lowest multiple of Japan's five largest trading houses1819202122. Berkshire Hathaway's stake passed 10% in May 202623.

The cash behind the profit was strong in the latest year. Operating cash flow was ¥813,456 million, up from ¥612,281 million24, and free cash flow ¥657.6 billion25. Revenue was mostly the sale of goods, ¥6,508,037 million, with ¥829,222 million from services and other sources26. The parent company itself has 5,056 employees and offices in 123 locations across 62 countries and regions27.

Much of the profit comes from companies Sumitomo does not fully own. Its share of the profit of equity-accounted investees was ¥266.7 billion, about 38% of profit before tax of ¥702.0 billion2829.

The moat is narrow: scale in leasing, an owned IT franchise and contracted power, each with real competitors. The number that would falsify the thesis is return on equity as the balance sheet is repaired. The company expects around 13% this year with net debt to equity back to about 0.630; a return below 12% with leverage still high would say the rebuilt portfolio earns less than it cost.

The number that tests this moat
Reported
Revenue, and where it comes from
¥7,337.3bn; net profit ¥600.3bn

Revenue is a third Japanese; profit is spread across nine segments. Watch ROE as leverage falls.

Source: Sumitomo Corporation results, year to March 2026 ↗
Moat scorecardHow ratings work →
Switching costs5/10
Network effects3/10
Pricing power3/10
Hard to replicate6/10
Disruption resistance5/10
Overall durability6/10

Replication scores highest because the leasing scale, SCSK's customer base and the power contracts took decades and partners to build. Durability is middling: the portfolio is more diversified than it was, but the company lost money twice in twelve years and a tenth of its capital still earns almost nothing. Switching costs exist in IT services, leasing contracts and power purchase agreements. Pricing power is weak in most segments. Network effects are limited.

Dig deeper
DIG DEEPER 01
The Revenue Lines
Sumitomo's profit is spread across nine segments more evenly than its losses once were.
DIG DEEPER 02
The Moat
Sumitomo rebuilt itself around aircraft leasing, IT services and power after two decades of losses on a Madagascar nickel mine.
DIG DEEPER 03
Competitors
Sumitomo is the cheapest of Japan's five large trading houses because the market still remembers its losses.
DIG DEEPER 04
Major Clients
Sumitomo has no customer worth naming and a third of its revenue from Japan.
✦ Future bets — beyond today's moat
✦ FUTURE BET 01
The Future Bets
Sumitomo's plan needs another ¥20 billion of profit this year and a smaller balance sheet by 2029.
⚠ Threats to the moat
⚠ THREAT 01
The Middle East War
Sumitomo has set aside ¥30 billion for a war that has closed the Strait of Hormuz.
⚠ THREAT 02
Debt Rose ¥1.2 Trillion in Fifteen Months
Sumitomo borrowed over a trillion yen for its two largest deals, and its risk buffer shrank by two-fifths.
◆ What the market may be missing
◆ THE VARIANT VIEW
What the Market Isn't Pricing In
Berkshire has quietly passed 10% of Sumitomo while the market still prices it as the house that lost money in 2021.
◆ THE VARIANT VIEW
Inside the Latest Quarter (April-June 2026)
Sumitomo's first quarter hid a ¥40 billion rise in underlying profit behind a nickel loss, a tax gain and a currency gain.
References
  1. ReportedSumitomo Corporation is a Japanese trading house, established in December 1919, that has spent the past decade changing what it owns.
    Sumitomo Corporation company profile - establishment date, employees, offices, consolidated subsidiaries and associated companies. — March 2026 · publ. 2026 · source ↗
  2. ReportedIt has 327 consolidated subsidiaries, 192 equity-accounted companies and 82,488 employees in the group.
    Sumitomo Corporation company profile - establishment date, employees, offices, consolidated subsidiaries and associated companies. — March 2026 · publ. 2026 · source ↗
  3. ReportedIn the year to March 2026 its revenue was ¥7,337.3 billion and its net profit a record ¥600.3 billion, up from ¥386.4 billion two years earlier.
    Sumitomo Corporation, Consolidated Financial Results for the year ended March 31, 2026 (IFRS) - results, segment profit, the financial position, dividends, the share split and the forecast for the year to March 2027. — FY to March 2026 · publ. May 2026 · source ↗
  4. ReportedIn the year to March 2026 its revenue was ¥7,337.3 billion and its net profit a record ¥600.3 billion, up from ¥386.4 billion two years earlier.
    Sumitomo Corporation, Consolidated Financial Results for the year ended March 31, 2025 (IFRS) - including restated segment information for the year to March 2024. — FY to March 2025 · publ. May 2025 · source ↗
  5. ReportedThe profit is spread across nine segments, none more than a sixth of the total: power and energy, leasing and construction equipment, mining, real estate, steel, cars, media and digital, chemicals, and food and retail.
    Sumitomo Corporation, Annual Financial Report for the year to March 2026 - segment information and revenue by geography and type. — FY to March 2026 · publ. June 2026 · source ↗
  6. ReportedIts largest positions include the world's second-largest aircraft lessor, held through a partnership; SCSK, an IT services company it now owns outright; overseas power plants; and half of JCOM.
    Sumitomo Corporation, results presentation for the year to March 2026 - leasing and aviation: SMFL, SMBC Aviation Capital, the lessor rankings, Air Lease and the automotive businesses. — FY to March 2026 · publ. May 2026 · source ↗
  7. ReportedIts largest positions include the world's second-largest aircraft lessor, held through a partnership; SCSK, an IT services company it now owns outright; overseas power plants; and half of JCOM.
    Sumitomo Corporation, results presentation for the year to March 2026 - leasing and aviation: SMFL, SMBC Aviation Capital, the lessor rankings, Air Lease and the automotive businesses. — FY to March 2026 · publ. May 2026 · source ↗
  8. ReportedIts largest positions include the world's second-largest aircraft lessor, held through a partnership; SCSK, an IT services company it now owns outright; overseas power plants; and half of JCOM.
    Sumitomo Corporation, results presentation for the year to March 2026 - leasing and aviation: SMFL, SMBC Aviation Capital, the lessor rankings, Air Lease and the automotive businesses. — FY to March 2026 · publ. May 2026 · source ↗
  9. ReportedJapan provides 38.7% of revenue and the United States 19.0%.
    Sumitomo Corporation, Annual Financial Report for the year to March 2026 - segment information and revenue by geography and type. — FY to March 2026 · publ. June 2026 · source ↗
  10. Moat Explorer calcJapan provides 38.7% of revenue and the United States 19.0%.
    Moat Explorer calculation from Sumitomo Corporation's reported figures. Per-share figures divided by four for the 1 July 2026 split: EPS 499.09 / 4 = 124.77, 463.66 / 4 = 115.92; DPS 150 / 4 = 37.5. Trailing twelve months to June 2026: profit 600.3 - 170.9 + 190.1 = 619.5; revenue 7,337.3 - 1,787.9 + 1,949.4 = 7,498.8; EPS 124.77 - 35.29 + 39.95 = 129.43. Market value at March year-ends (close x shares issued, including treasury shares): 1,118.5 x 1,250.6m = ¥1,399bn (2016), 5,780 x 1,211.4m = ¥7,002bn (2026); P/E 1,399 / 74.5 = 18.8 and 7,002 / 600.3 = 11.7. Trailing P/E 8.51 trillion / 619.5 billion = 13.7; P/S 8.51 / 7.4988 = 1.13. Revenue by region, year to March 2026: Japan 2,840,605 / 7,337,259 = 38.7%; United States 1,391,341 / 7,337,259 = 19.0%. Equity-method profit over profit before tax: 266.7 / 702.0 = 38%. Mineral share of underlying profit: 99 / 524 = 19%. Profit growth over two years: 600.3 / 386.4 = 1.55. Profit against the plan target: 630.0 / 650.0 = 97%. Lifestyle and corporate band: 14.1 - 4.5 = 9.6 (2025) and -3.6 + 33.5 = 29.9 (2026). Largest four segments, year to March 2026: 102.4 + 88.9 + 82.3 + 81.5 = 355.1, 59% of 600.3. Berkshire market value over cost: 4,022 / 1,907 = 2.1 times; dividends on cost 102 / 1,907 = 5.3%. SCSK premium: 5,700 / 4,359 - 1 = 30.8%. Share count since 2013: 1,195.1m pre-split equivalent against 1,250.6m = -4.4%. Buyback: 47.65m shares against 4,780.5m issued = 1.0%. Q1 progress: 190.1 / 630.0 = 30%. Segment return on assets, year to March 2026: Energy Transformation 102.4 / 1,977.8 = 5.2%; Steel 74.3 / 1,199.5 = 6.2%; Automotive 63.2 / 861.7 = 7.3%; Transportation & Construction Systems 88.9 / 1,874.9 = 4.7%; Diverse Urban Development 81.5 / 1,792.9 = 4.5%; Media & Digital 51.2 / 1,492.7 = 3.4%; Mineral Resources 82.3 / 2,463.7 = 3.3%; Chemical Solutions 26.5 / 942.7 = 2.8%. Dividend per share, split-adjusted: 70 / 4 = 17.5 (2021) to 150 / 4 = 37.5 (2026) and 40 forecast; 37.5 / 17.5 = 2.1 times. Commercial Aviation underlying: 38.7 / 19.7 = 1.96 times. Eight growth areas: 382.7 / 279.9 - 1 = 36.7%. Low-ROIC capital: ¥3.0 bn / ¥1 trillion = 0.3%. Commercial Aviation forecast increase: 38.7 - 19.7 = 19.0; 19.0 / 330 = 5.8%. SCSK charge against comprehensive income: 722.7 / 1,029.6 = 70%. SCSK price rise: (5,700 - 5,050) x 154.7m = ¥100.6bn. Construction systems margin: 18.8 / 718.3 = 2.6%. Planned investment raised from 1.8 to 3.0 trillion = +67%. Low-return plus asset-turnover capital: (1.0 + 0.7) / 9.44 = 18%. Eight growth areas forecast increase: 382.7 - 305.0 = 77.7, against 15.0 added in the latest year. Forecast dividends over forecast profit: 191.0 / 630.0 = 30.3%. Value against the big three: 8.51 / 17.62 = 0.48, 8.51 / 14.63 = 0.58; their value over Sumitomo's 1.72-2.07; profit 619.05 / 936.38 = 0.66 and 619.05 / 895.86 = 0.69. Low-ROIC capital against total invested capital: 1.0 / 9.44 = 10.6%. — FY to March 2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Sumitomo Corporation's results, presentations, annual financial report and market data; operands shown in the source line.
  11. ReportedIts history includes net losses of ¥73.2 billion and ¥153.1 billion in the years to March 2015 and 2021, and repeated charges on the Ambatovy nickel project in Madagascar, which it agreed to sell in May 2026.
    Sumitomo Corporation, Financial Data workbook for the year to March 2026 - historical revenue, profit, EPS, ROE, balance sheet, cash flows and share prices from the year to March 2014, and the risk buffer against risk assets. — FY to March 2014-2026 · publ. May 2026 · source ↗
  12. ReportedIts history includes net losses of ¥73.2 billion and ¥153.1 billion in the years to March 2015 and 2021, and repeated charges on the Ambatovy nickel project in Madagascar, which it agreed to sell in May 2026.
    Bloomberg, 13 January 2016 - Sumitomo Corp withdraws forecasts after a ¥77 billion charge on the Ambatovy nickel project. — January 2016 · publ. 13 January 2016 · source ↗
  13. ReportedIts history includes net losses of ¥73.2 billion and ¥153.1 billion in the years to March 2015 and 2021, and repeated charges on the Ambatovy nickel project in Madagascar, which it agreed to sell in May 2026.
    Sumitomo Corporation release, July 2020 - impairment loss of approximately ¥55 billion on the Ambatovy nickel project in Madagascar in the first quarter of FY2020. — July 2020 · publ. July 2020 · source ↗
  14. ReportedIts history includes net losses of ¥73.2 billion and ¥153.1 billion in the years to March 2015 and 2021, and repeated charges on the Ambatovy nickel project in Madagascar, which it agreed to sell in May 2026.
    Sumitomo Corporation, Annual Financial Report for the year to March 2025 (English) - including the Ambatovy impairment of ¥75,462 million and the Myanmar telecom loss of ¥35,215 million in the year to March 2024. — FY to March 2025 · publ. June 2025 · source ↗
  15. ReportedIts history includes net losses of ¥73.2 billion and ¥153.1 billion in the years to March 2015 and 2021, and repeated charges on the Ambatovy nickel project in Madagascar, which it agreed to sell in May 2026.
    Sumitomo Corporation, results presentation for the year to March 2026 - mineral resources: copper, iron ore, aluminium, coal and the Madagascar nickel exit. — FY to March 2026 · publ. May 2026 · source ↗
  16. ReportedReturn on equity was 12.9% in the latest year, against a target of 12% or higher.
    Sumitomo Corporation, Consolidated Financial Results for the year ended March 31, 2026 (IFRS) - results, segment profit, the financial position, dividends, the share split and the forecast for the year to March 2027. — FY to March 2026 · publ. May 2026 · source ↗
  17. ReportedReturn on equity was 12.9% in the latest year, against a target of 12% or higher.
    Sumitomo Corporation, results presentation for the year to March 2026 - consolidated results, underlying profit, forecasts, sensitivities and the loss buffer. — FY to March 2026 · publ. May 2026 · source ↗
  18. ReportedThe market values it at about ¥8.5 trillion, 13.90 times trailing earnings, the lowest multiple of Japan's five largest trading houses.
    Sumitomo Corporation (TYO: 8053) market data - share price ¥1,768.50, market capitalisation 8.51T yen, trailing net income 619.05B yen, P/E 13.90, forward P/E 12.62, dividend ¥40.00 (2.26%), September 2026. — September 2026 · publ. 24 September 2026 · source ↗
  19. ReportedThe market values it at about ¥8.5 trillion, 13.90 times trailing earnings, the lowest multiple of Japan's five largest trading houses.
    Marubeni Corporation (TYO: 8002) market data - market capitalisation 8.09T yen, trailing net income 575.88B yen, P/E 14.19, September 2026. — September 2026 · publ. 24 September 2026 · source ↗
  20. ReportedThe market values it at about ¥8.5 trillion, 13.90 times trailing earnings, the lowest multiple of Japan's five largest trading houses.
    Mitsui & Co. (TYO: 8031) market data - market capitalisation 14.63T yen, trailing net income 936.38B yen, P/E 15.75, September 2026. — September 2026 · publ. 24 September 2026 · source ↗
  21. ReportedThe market values it at about ¥8.5 trillion, 13.90 times trailing earnings, the lowest multiple of Japan's five largest trading houses.
    ITOCHU Corporation (TYO: 8001) market data - market capitalisation 15.94T yen, trailing net income 910.11B yen, P/E 17.77, September 2026. — September 2026 · publ. 24 September 2026 · source ↗
  22. ReportedThe market values it at about ¥8.5 trillion, 13.90 times trailing earnings, the lowest multiple of Japan's five largest trading houses.
    Mitsubishi Corporation (TYO: 8058) market data - market capitalisation 17.62T yen, trailing net income 895.86B yen, P/E 20.12, September 2026. — September 2026 · publ. 24 September 2026 · source ↗
  23. ReportedBerkshire Hathaway's stake passed 10% in May 2026.
    Yahoo Finance - Berkshire Hathaway raised its stake in Sumitomo Corp. to 10.05% as of May 7, up from 9.30% in March. — May 2026 · publ. May 2026 · source ↗
  24. ReportedOperating cash flow was ¥813,456 million, up from ¥612,281 million, and free cash flow ¥657.6 billion.
    Sumitomo Corporation, Annual Financial Report for the year to March 2026 - consolidated financial statements and notes, including the SCSK acquisition accounting. — FY to March 2026 · publ. June 2026 · source ↗
  25. ReportedOperating cash flow was ¥813,456 million, up from ¥612,281 million, and free cash flow ¥657.6 billion.
    Sumitomo Corporation, Consolidated Financial Results for the year ended March 31, 2026 (IFRS) - results, segment profit, the financial position, dividends, the share split and the forecast for the year to March 2027. — FY to March 2026 · publ. May 2026 · source ↗
  26. ReportedRevenue was mostly the sale of goods, ¥6,508,037 million, with ¥829,222 million from services and other sources.
    Sumitomo Corporation, Annual Financial Report for the year to March 2026 - segment information and revenue by geography and type. — FY to March 2026 · publ. June 2026 · source ↗
  27. ReportedThe parent company itself has 5,056 employees and offices in 123 locations across 62 countries and regions.
    Sumitomo Corporation company profile - establishment date, employees, offices, consolidated subsidiaries and associated companies. — March 2026 · publ. 2026 · source ↗
  28. ReportedIts share of the profit of equity-accounted investees was ¥266.7 billion, about 38% of profit before tax of ¥702.0 billion.
    Sumitomo Corporation, Consolidated Financial Results for the year ended March 31, 2026 (IFRS) - results, segment profit, the financial position, dividends, the share split and the forecast for the year to March 2027. — FY to March 2026 · publ. May 2026 · source ↗
  29. Moat Explorer calcIts share of the profit of equity-accounted investees was ¥266.7 billion, about 38% of profit before tax of ¥702.0 billion.
    Moat Explorer calculation from Sumitomo Corporation's reported figures. Per-share figures divided by four for the 1 July 2026 split: EPS 499.09 / 4 = 124.77, 463.66 / 4 = 115.92; DPS 150 / 4 = 37.5. Trailing twelve months to June 2026: profit 600.3 - 170.9 + 190.1 = 619.5; revenue 7,337.3 - 1,787.9 + 1,949.4 = 7,498.8; EPS 124.77 - 35.29 + 39.95 = 129.43. Market value at March year-ends (close x shares issued, including treasury shares): 1,118.5 x 1,250.6m = ¥1,399bn (2016), 5,780 x 1,211.4m = ¥7,002bn (2026); P/E 1,399 / 74.5 = 18.8 and 7,002 / 600.3 = 11.7. Trailing P/E 8.51 trillion / 619.5 billion = 13.7; P/S 8.51 / 7.4988 = 1.13. Revenue by region, year to March 2026: Japan 2,840,605 / 7,337,259 = 38.7%; United States 1,391,341 / 7,337,259 = 19.0%. Equity-method profit over profit before tax: 266.7 / 702.0 = 38%. Mineral share of underlying profit: 99 / 524 = 19%. Profit growth over two years: 600.3 / 386.4 = 1.55. Profit against the plan target: 630.0 / 650.0 = 97%. Lifestyle and corporate band: 14.1 - 4.5 = 9.6 (2025) and -3.6 + 33.5 = 29.9 (2026). Largest four segments, year to March 2026: 102.4 + 88.9 + 82.3 + 81.5 = 355.1, 59% of 600.3. Berkshire market value over cost: 4,022 / 1,907 = 2.1 times; dividends on cost 102 / 1,907 = 5.3%. SCSK premium: 5,700 / 4,359 - 1 = 30.8%. Share count since 2013: 1,195.1m pre-split equivalent against 1,250.6m = -4.4%. Buyback: 47.65m shares against 4,780.5m issued = 1.0%. Q1 progress: 190.1 / 630.0 = 30%. Segment return on assets, year to March 2026: Energy Transformation 102.4 / 1,977.8 = 5.2%; Steel 74.3 / 1,199.5 = 6.2%; Automotive 63.2 / 861.7 = 7.3%; Transportation & Construction Systems 88.9 / 1,874.9 = 4.7%; Diverse Urban Development 81.5 / 1,792.9 = 4.5%; Media & Digital 51.2 / 1,492.7 = 3.4%; Mineral Resources 82.3 / 2,463.7 = 3.3%; Chemical Solutions 26.5 / 942.7 = 2.8%. Dividend per share, split-adjusted: 70 / 4 = 17.5 (2021) to 150 / 4 = 37.5 (2026) and 40 forecast; 37.5 / 17.5 = 2.1 times. Commercial Aviation underlying: 38.7 / 19.7 = 1.96 times. Eight growth areas: 382.7 / 279.9 - 1 = 36.7%. Low-ROIC capital: ¥3.0 bn / ¥1 trillion = 0.3%. Commercial Aviation forecast increase: 38.7 - 19.7 = 19.0; 19.0 / 330 = 5.8%. SCSK charge against comprehensive income: 722.7 / 1,029.6 = 70%. SCSK price rise: (5,700 - 5,050) x 154.7m = ¥100.6bn. Construction systems margin: 18.8 / 718.3 = 2.6%. Planned investment raised from 1.8 to 3.0 trillion = +67%. Low-return plus asset-turnover capital: (1.0 + 0.7) / 9.44 = 18%. Eight growth areas forecast increase: 382.7 - 305.0 = 77.7, against 15.0 added in the latest year. Forecast dividends over forecast profit: 191.0 / 630.0 = 30.3%. Value against the big three: 8.51 / 17.62 = 0.48, 8.51 / 14.63 = 0.58; their value over Sumitomo's 1.72-2.07; profit 619.05 / 936.38 = 0.66 and 619.05 / 895.86 = 0.69. Low-ROIC capital against total invested capital: 1.0 / 9.44 = 10.6%. — FY to March 2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Sumitomo Corporation's results, presentations, annual financial report and market data; operands shown in the source line.
  30. ReportedThe company expects around 13% this year with net debt to equity back to about 0.6; a return below 12% with leverage still high would say the rebuilt portfolio earns less than it cost.
    Sumitomo Corporation, results presentation for the year to March 2026 - cash allocation, asset replacement, shareholder returns and the financial-soundness target. — FY to March 2026 · publ. May 2026 · source ↗
Sources
Generated September 24, 2026