Water technology is a critical yet underappreciated pillar of the global industrial economy. As water scarcity intensifies and demand continues to rise, industries face mounting risks tied to water access and quality. From semiconductors to power generation, water plays an indispensable role in production processes, with ultra-pure water (UPW) systems standing out as essential for high-precision industries. Despite its importance, water is still undervalued, and investment in water infrastructure lags other sectors, creating both challenges and opportunities for investors.

Our latest report highlights the growing economic case for water technology investments, particularly in digital solutions, advanced treatment systems, and desalination. Unlike traditional water utilities, which pose significant challenges for investors due to fragmented markets and undervalued pricing structures, water technology addresses scarcity and quality concerns while enabling cost savings and operational efficiencies. By focusing on the industrial applications of water technology, where innovation drives resilience and profitability, investors can benefit from direct investment in problem-solving technologies.

One specific niche in this growing universe of water technologies that is particularly interesting is ultra-pure water treatment solutions. Among the key players in ultra-pure water systems are three Japanese firms: Kurita Water Industries, Organo Corporation, and Nomura Micro Science. Each company offers a distinct business model. Kurita provides broad-based solutions but achieves moderate growth and returns. Organo specializes in high-value markets like semiconductors and pharmaceuticals, demonstrating superior margins and capital efficiency. Nomura focuses narrowly on semiconductor ultra-pure systems, delivering exceptional growth but with significant cyclicality. Of these, Organo emerges as the most compelling investment opportunity due to its balanced approach, structural margin improvements, and strong positioning in high-growth markets.

Ultimately, this report underscores that water technology is a necessity and a strategic opportunity for investors. As industries grapple with increasing water-related risks, companies that integrate advanced water management solutions into their operations will gain a competitive edge. For investors seeking exposure to this critical sector, firms like Organo represent an attractive blend of innovation, profitability, and resilience in an increasingly water-constrained world.

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