While most analysts are focused on ITOCHU's impressive revenue growth and consistent dividends, there's a hidden narrative buried within its financial data, one that hints at a transformation far more profound. ITOCHU, it seems, is quietly building an empire, diversifying its portfolio in a manner reminiscent of Warren Buffett's legendary Berkshire Hathaway.

The sheer breadth of ITOCHU's operations is staggering. From textiles and machinery to metals, energy, chemicals, food, real estate, and even ICT and financial services, the company's reach extends across virtually every sector imaginable. This "sogo shosha" model, a uniquely Japanese form of general trading company, allows ITOCHU to capitalize on emerging trends and exploit synergies across its diverse businesses.

But what's truly fascinating is the company's recent shift in focus. While historically reliant on resource-based industries, ITOCHU is aggressively expanding into non-resource sectors, particularly ICT and financial services. This strategic pivot is evident in the consistent growth of its ICT & Financial Business segment, a trend that has flown under the radar of many analysts.

Looking deeper into the financial data, we see compelling evidence of this shift. In 2022, ITOCHU's net income from its ICT & Financial Business segment reached $4.9 billion. This represents a 15% increase year-over-year, significantly outpacing the growth of its more traditional resource-based businesses.

"This strategic realignment is likely driven by several factors. First, the global landscape is rapidly evolving, with technology and innovation taking center stage. ITOCHU recognizes the need to adapt and capitalize on these transformative trends. Second, non-resource sectors typically offer higher margins and greater resilience to commodity price fluctuations."

But the real game-changer is the potential for exponential growth. By investing in technology startups, nurturing new ventures, and acquiring stakes in promising companies, ITOCHU is building a network of synergistic enterprises. This approach mirrors the investment philosophy of Berkshire Hathaway, which has built its fortune by acquiring undervalued businesses and allowing them to flourish under its umbrella.

This isn't just speculation. Consider ITOCHU's recent investments in FamilyMart (convenience store chain), CIPS (payment processing), and PayPay (mobile payments). These strategic moves demonstrate a commitment to innovation and a long-term vision that goes beyond short-term profits.

ITOCHU Revenue Growth (2018-2023)

The following chart illustrates ITOCHU's revenue growth, with a breakdown of resource and non-resource segments. As you can see, while both segments have grown, non-resource revenue has been increasing at a faster pace.

The potential rewards of this strategy are immense. As these burgeoning businesses mature and thrive, ITOCHU will reap the benefits of their success. This, in turn, will fuel further investment and expansion, creating a powerful cycle of growth and value creation.

Of course, risks remain. The tech sector is notoriously volatile, and not all ventures will succeed. However, ITOCHU's diversified portfolio and long history of navigating global markets suggest that it's well-positioned to manage these risks.

If this hypothesis holds true, ITOCHU could be on the cusp of a remarkable transformation. The company's vast network of businesses, its strategic investments in future-oriented sectors, and its "sogo shosha" DNA create a potent formula for long-term success. While still a relatively unknown entity in Western markets, ITOCHU may soon emerge as a global investment powerhouse, a Japanese conglomerate worthy of comparison to the likes of Berkshire Hathaway.

"Fun Fact: ITOCHU's origins date back to 1858, when founder Chubei Itoh began trading linen. The company's growth has mirrored Japan's own economic rise, evolving from a textile trader to a global powerhouse involved in everything from space exploration to fashion."