Research Coverage of Japanese Listed Companies, Shared Research Inc

Shared Research

Research Coverage of Japanese Listed Companies

Shared Research Inc

Pioneering research coverage of Japanese listed companies. Now customizable and interactive for global institutional investors. Corporate access reimagined.

Equity Bottom-Up

<ul><li>The company achieved 112.6% of its sales target, leading to a revision of the full-year forecast.</li><li>Semiconductor Equipment-related business saw increased sales in vacuum products and semiconductor manufacturing materials, boosting segment performance.</li><li>The company raised its sales forecast by JPY30.0bn, anticipating strong demand from Chinese manufacturers in 2H FY03/25.</li></ul>

The company achieved 112.6% of its sales target, leading to a revision of the full-year forecast.Semiconductor Equipment-related business saw increased sales in vacuum products and semiconductor manufacturing materials, boosting segment performance.The company raised its sales forecast by JPY30.0bn, anticipating strong demand from Chinese manufacturers in 2H FY03/25.

Ferrotec Corp (6890 JP): 1H FY03/25 flash update

Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

<ul>
<li>Delivered FY’23 net sales of ¥$211 billion, up 57.5% sequentially.</li>
<li>FY'23 operating profit of ¥35 billion was up 63% sequentially</li>
<li>Our favourite Japanese semi stock with a TTM P/E &lt;5</li>
</ul>


Delivered FY’23 net sales of ¥$211 billion, up 57.5% sequentially.
FY'23 operating profit of ¥35 billion was up 63% sequentially
Our favourite Japanese semi stock with a TTM P/E &lt;5


Ferrotec. Accelerating Growth Across Multiple Niche Semi Segments

<ul><li>Q1 FY03/25 results: Sales JPY61.1bn (+16.9% YoY), Operating profit JPY7.0bn (-1.4% YoY), Recurring profit JPY8.2bn (+7.7% YoY), Net income JPY4.8bn (+11.6% YoY).</li><li>Segment sales: Semiconductor Equipment-related JPY39.9bn (+33.6% YoY), Electronic Device JPY10.0bn (+8.7% YoY), Automotive-related JPY5.8bn (-21.2% YoY), Others JPY5.4bn (-7.4% YoY).</li><li>Revised 1H FY03/25 forecast: Sales JPY120.0bn (+13.8% YoY), Operating profit JPY13.0bn (-0.3%), Recurring profit JPY14.5bn (-4.7% YoY), Net income JPY8.5bn (+1.3% YoY).</li></ul>

Q1 FY03/25 results: Sales JPY61.1bn (+16.9% YoY), Operating profit JPY7.0bn (-1.4% YoY), Recurring profit JPY8.2bn (+7.7% YoY), Net income JPY4.8bn (+11.6% YoY).Segment sales: Semiconductor Equipment-related JPY39.9bn (+33.6% YoY), Electronic Device JPY10.0bn (+8.7% YoY), Automotive-related JPY5.8bn (-21.2% YoY), Others JPY5.4bn (-7.4% YoY).Revised 1H FY03/25 forecast: Sales JPY120.0bn (+13.8% YoY), Operating profit JPY13.0bn (-0.3%), Recurring profit JPY14.5bn (-4.7% YoY), Net income JPY8.5bn (+1.3% YoY).

Ferrotec Corp (6890 JP): Q1 FY03/25 flash update

Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Senior Technology Analyst, Japanese Equities

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>Ferrotec shares have dropped by a third since last July and are now selling at 8.2x EPS guidance and 0.6x book value.</li>
<li>Sales and operating should start to recover in 2H of FY Mar-24, led by power semiconductor substrates.</li>
<li>Buy for the upturn in the semiconductor cycle and capacity expansion in Japan, China and Malaysia. No significant damage from the Noto Peninsula earthquake has been reported.</li>
</ul>


Ferrotec shares have dropped by a third since last July and are now selling at 8.2x EPS guidance and 0.6x book value.
Sales and operating should start to recover in 2H of FY Mar-24, led by power semiconductor substrates.
Buy for the upturn in the semiconductor cycle and capacity expansion in Japan, China and Malaysia. No significant damage from the Noto Peninsula earthquake has been reported.


Ferrotec (6890 JP): Return to Growth Led by Power Semiconductor Substrates

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>Quiddity's "<strong>Who is Ready</strong>" series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.</li>
<li>In the last few days, <a href="https://www.smartkarma.com/entities/sunwels-co-ltd" target="_blank" data-smartkarma-citation="entities:43702:1" rel="noopener">SUNWELS Co (9229 JP)</a> and <a href="https://www.smartkarma.com/entities/macbee-planet-inc" target="_blank" data-smartkarma-citation="entities:39863:1" rel="noopener">Macbee Planet (7095 JP)</a> have announced their moves to TSE prime which would eventually trigger a TOPIX Inclusion event.</li>
<li>
<a href="https://www.smartkarma.com/entities/macbee-planet-inc" target="_blank" data-smartkarma-citation="entities:39863:1" rel="noopener">Macbee Planet</a> was in our highest conviction list but <a href="https://www.smartkarma.com/entities/sunwels-co-ltd" target="_blank" data-smartkarma-citation="entities:43702:1" rel="noopener">SUNWELS Co</a> was not. In this insight, we have made some modifications to our methodology to improve future hit rates.</li>
</ul>


Quiddity's "Who is Ready" series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
In the last few days, SUNWELS Co (9229 JP) and Macbee Planet (7095 JP) have announced their moves to TSE prime which would eventually trigger a TOPIX Inclusion event.

Macbee Planet was in our highest conviction list but SUNWELS Co was not. In this insight, we have made some modifications to our methodology to improve future hit rates.


TOPIX Inclusions: Who Is Ready (July 2024)

Japan

Ferrotec Corporation develops, manufactures, and sells equipment that incorporates magnetic fluid (ferrofluid) technology. The Company manufactures and processes electronics components, manufactures machine tools, and cleans parts used in semiconductor manufacturing equipment as CMS (contract manufacturing service) business in China.

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Ferrotec Corp (6890 JP)