AI Sparks New Investment Trend! HALO Trading on the Rise, Asset-Heavy Powerhouse Japan Poised to Become the Ultimate Winner

Glonghui, February 28｜While global investors are frantically chasing asset-light tech companies amid the AI wave, a countercurrent is quietly reshaping market logic. Some media have pointed out that companies with "heavy asset, low attrition rate" (HALO) characteristics are becoming the new favorites for capital risk aversion, and the Japanese stock market, with its deep industrial accumulation, is expected to become the ultimate winner in this strategic shift. The industrial disruption triggered by AI is forcing investors to reassess risks. Morgan Stanley was the first to propose the HALO trade concept, advocating for the allocation of high-barrier physical assets such as electricity and railways to hedge against the risks of technological iteration. A recent report from Goldman Sachs further confirms this trend: under the triple pressures of rising interest rates, geopolitical fragmentation, and surging AI capital expenditure, the market is experiencing a "repricing of scarcity," with tangible production capacity becoming a scarce resource. Goldman Sachs analysts point out that investors are no longer blindly chasing the asset-light narrative; the market is starting to reward hard-to-replicate production capacity, networks, and infrastructure. This shift is particularly evident in the Japanese market. Traditional manufacturers, once criticized as "zombie companies," have unexpectedly gained capital favor due to their highly specialized equipment and high industry barriers. Well-known Japanese stock strategist Pelham Smithers notes that Japan has retained the full industry chain skills urgently needed worldwide. As the US pushes for reindustrialization, it finds that Japan has long cultivated the industrial gaps it desperately needs. A typical example is the large gas turbine project newly built in the US. To meet the massive energy demand required for AI computing power, this project relies heavily on Japanese precision machinery technology support. Even deeper competitiveness lies upstream in the supply chain. The semiconductor boom has given specialty material manufacturers absolute bargaining power, with companies like Mitsui Metals and Nitto Boseki monopolizing key raw materials for AI chip manufacturing. Among the seven major sectors covered by the Morgan Stanley HALO Index, including materials and utilities, the proportion of Japanese companies has increased significantly. The price-to-book ratio (P/B) of the Tokyo Stock Exchange's main board has rebounded 32% from last year's low, reflecting a revaluation of its industrial value by capital. Behind this reversal is a qualitative change in industrial logic. After the bubble economy, the Bank of Japan continued to provide debt extensions for heavy asset companies. This seemingly conservative strategy actually preserved precision manufacturing capabilities. Now, these companies, with their irreplaceable technological barriers, hold the bargaining initiative in the global supply chain reconstruction. However, the HALO strategy is not a universal insurance box; its core assumption is based on the continued deepening of AI disruption. If there is a sudden shift in technology or market preferences, Japanese stocks may come under pressure again. Smithers warns that the HALO status of Japanese companies has been maintained amid criticism, and criticism could resurface at any time. Currently, from factories roaring with gas turbines to semiconductor clean rooms, Japanese manufacturing is ushering in a long-awaited value discovery. As global capital rediscovers the defensive appeal of heavy assets, Japan, once thought to be lagging behind the times, may be writing a new growth legend as an industrial giant.