Japan has no set definition of HALO. We defined it as companies with heavy assets that keep earning from assets competitors find hard to build. AI read 325 reports, and with the numbers we list 12.
HALO stands for Heavy Assets, Low Obsolescence: companies with heavy assets that do not go out of date quickly. Capital spending is heavy, and physical assets cannot be built as fast as software, so barriers to entry are high.
The term spread in February 2026. Software stocks fell on fears that AI would take over their work, and investor Josh Brown used the term. Goldman Sachs picked it up, and in July argued that HALO companies also benefit from AI investment, with data centers, chips, utilities and defense making up over 40% of global capital spending this year.
In Japan, trading houses, heavy industry, railways and retailers are all named as HALO stocks, but there is no set definition and the lists differ by article. Goldman's report reportedly measured heaviness with ratios such as plant and equipment to total assets, tangible assets per employee, and capital spending to sales. Katana shows plant and equipment at a median 19% of total assets for listed non-financial companies, against 9% at Sumitomo Corporation, 10% at Mitsubishi Heavy Industries and 76% at JR East. Companies called by the same name differ this much.
Price is also a concern. Asset manager Orbis said in May that 10 Japanese HALO stocks were all cyclical yet priced like growth stocks. In September, the Nikkei reported that major power stocks hit highs on hopes for stronger pricing power.
Some companies already show it in results. Operating profit for April to September 2026 rose 15.0% at Oriental Land and 25.8% at SKY Perfect JSAT.
Being hard for AI to replace is not the same as being profitable. Heavy assets cost money to build and to maintain.
So we searched annual reports for companies with heavy assets that mainly earn from assets competitors cannot easily build, then checked how much operating profit those assets have produced.
“We want companies with heavy physical assets that competitors cannot easily build, and that have kept earning from those assets.”
Entered in Japanese; English translation.
We used annual report figures to keep companies with heavy physical assets, entered one question in English for the 325 with a market value of ¥30 billion or more, and had the AI read each report. We narrowed the 71 supported or needing review to 17 by operating profit on physical assets, checked the text, and list 12. For power companies without a line for property, plant and equipment, we subtracted intangible assets and investments from noncurrent assets. Claude ran the judgments with Katana's own judgment system. Latest results come from earnings reports and news coverage. Judgments as of November 6, 2026; financial data as of October 30, 2026.
Katana computes its metrics for every company.
AI reads each annual report and judges support and counterevidence.
The question was entered in English. After the judgment, we kept companies whose operating profit was 10% or more of property, plant and equipment, both as a nine-year median and in the latest year.
read the filings and supported 50.
Of 325 companies, 50 were supported, 21 need review and 254 had counterevidence. First come one company each from theme parks, railways, satellites, racecourses, waste and natural gas.
Says it operates mainly in the Maihama area, with theme parks making up over 80% of sales and operating profit.Filing ↗
Says it runs the Tokaido Shinkansen and conventional lines in the Tokai region, along with bus and other businesses.Filing ↗
Says its space business uses communications satellites in geostationary orbit to serve government bodies, companies and mobile users.Filing ↗
Says it owns Oi Racecourse and other facilities and leases them to the local-government body that runs the races under the Horse Racing Act.Filing ↗
Says it owns facilities for intermediate treatment of many kinds of waste and holds a license to handle specially controlled industrial waste.Filing ↗
Says it sells domestic natural gas and regasified LNG through its own gas pipeline network of more than 800 km.Filing ↗
Says its main businesses are gas, from development to supply, and iodine made from brine produced with natural gas.Filing ↗
Says iodine is an underground resource found unevenly around the world, with Chile, Japan and the US as the main producers.Filing ↗
Says about half of its limestone, which makes up 17.1% of sales, is produced at the Torigatayama mine.Filing ↗
Says it spent ¥23.4 billion in its gas segment, mainly on extending its pipeline network, along with a US shale gas stake.Filing ↗
Says waste treatment requires a license, and that building or expanding treatment facilities also requires permission from local governments.Filing ↗
Notes that anyone opening a radio station must obtain a license from the Minister of Internal Affairs and Communications.Filing ↗
Of the 17, we left out 5 whose main business, such as condominium sales, fuel sales or leased capacity, did not read as earning mainly from hard-to-build assets they own.
View detailed resultsThis report is based on annual securities reports as of November 6, 2026.
Of the 71 that read as owning hard-to-build assets, 17 kept operating profit at 10% or more of physical assets both as a nine-year median and in the latest year. Across all heavy-asset companies the median is 9.2%, with the bottom quarter under 4.7% and the top quarter at 15% or more.
Within industries, companies in the top half in the first five years mostly stayed there in the next five (376 of 512 stayed on the same side). The gap is not one year's luck.
Latest results for the 12 listed show that companies whose assets serve customers and projects mostly grew profit, while resource and gas companies moved widely with markets. Reporting periods differ by company.
| Company | Asset | Op. profit on assets (median to latest) | Latest op. profit |
|---|---|---|---|
| SKY Perfect JSAT | Satellites | 16% to 23% | +25.8% |
| Okinawa Cellular | Network | 36% to 45% | +25.6% |
| Midac | Disposal sites | 26% to 20% | +18.2% |
| Oriental Land | Theme parks | 20% to 20% | +15.0% |
| Daiseki | Treatment plants | 28% to 27% | +12.0% |
| Tokyotokeiba | Racecourse | 16% to 17% | +3.9% |
| JR Central | Shinkansen | 12% to 13% | -1.5% |
| Nittetsu Mining | Mines | 16% to 17% | +40.5% |
| K&O Energy | Gas fields | 10% to 25% | Roughly flat |
| Shizuoka Gas | Pipelines | 14% to 23% | -10.4% |
| Ise Chemicals | Iodine wells | 20% to 57% | -15.2% |
| JAPEX | Oil and gas fields | 10% to 10% | -62.9% |
Nittetsu Mining's profit is up, but last year's gain owed partly to copper and gold prices, and it forecasts lower profit this year. The cyclical character Orbis pointed to shows clearly on the resource side.
Power companies are not among the 12. Their operating profit on physical assets has a nine-year median of about 1.5% to 4%. But that is a past figure and says nothing of what lies ahead. Japan's grid organization expects data centers and chips to add about 7.15 GW of demand by fiscal 2034, and eight major utilities have decided to build or expand substations at 30 sites. Current results are still driven by other factors: on fuel costs linked to the Middle East, operating profit fell 69.9% at Kansai Electric and 49.4% at Hokkaido Electric in April to September 2026, and TEPCO posted a loss. AI demand has yet to reach earnings.
Of the 71 that read as owning hard-to-build assets, 17 have kept earning from them. Even among those, latest results split between companies earning from customers and projects and those moving with resource markets. Whether AI can replace a company does not reveal this gap. Looking at a company under the HALO name means checking what it earns from.
We sorted the 12 by why their assets are hard for competitors to build, based on what their reports say.
| Why hard to build | Company | In the report | Op. profit |
|---|---|---|---|
| Permit required | Midac | Special waste license | +18.2% |
| Permit required | Daiseki | Permits for new plants | +12.0% |
| Law or license | Okinawa Cellular | Radio station license | +25.6% |
| Law or license | Tokyotokeiba | Leases Oi Racecourse | +3.9% |
| Unique location | Oriental Land | Maihama: 80%+ of sales | +15.0% |
| Unique location | JR Central | Tokaido Shinkansen | -1.5% |
| Long experience | SKY Perfect JSAT | Satellites, 40 years | +25.8% |
| Local pipelines | Shizuoka Gas | Extending pipelines | -10.4% |
| Scarce resources | Nittetsu Mining | 23.3 km conveyor | +40.5% |
| Scarce resources | K&O Energy | Gas and iodine in Chiba | Roughly flat |
| Scarce resources | Ise Chemicals | Iodine in few countries | -15.2% |
| Scarce resources | JAPEX | Fields, 800 km+ pipelines | -62.9% |
The 4 resource companies have hard-to-build assets, but markets set the price of what they sell. We believe this is why their latest results vary so widely. The 4 relying on permits or licenses all grew profit. Reporting periods differ and the group is small, so this alone is not a trend. Still, what moves results at a resource company differs from what moves them at a permit-based one.
Katana narrows companies with its own metrics, and AI reads annual reports to judge qualitative conditions. For complex theses and company profiles, the selection you used to do one company at a time, AI now runs across the Japanese market.
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