Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Equity Bottom-Up

<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>The growth rates the previous year were equally as impressive               </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
The growth rates the previous year were equally as impressive               


Ferrotec. Accelerating Growth Across Multiple Niche Semi Segments

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)

<ul>
<li>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.</li>
<li>
<a href="https://www.smartkarma.com/entities/furuya-metal-co-ltd" target="_blank" data-smartkarma-citation="entities:5196:1" rel="noopener">Furuya Metal (7826 JP)</a> and <a href="https://www.smartkarma.com/entities/visional-inc" target="_blank" data-smartkarma-citation="entities:32977:1" rel="noopener">Visional (4194 JP)</a> are expected to be included in the TOPIX index at the end of January 2024</li>
<li>There are couple of other pre-event names that we have been tracking for the past few months.</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.

Furuya Metal (7826 JP) and Visional (4194 JP) are expected to be included in the TOPIX index at the end of January 2024
There are couple of other pre-event names that we have been tracking for the past few months.


TOPIX Inclusions: Who Is Ready (Jan 2024)

Index Rebalance

<ul>
<li>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.</li>
<li>The TOPIX Inclusions of <a href="https://www.smartkarma.com/entities/baudroie-inc" target="_blank" data-smartkarma-citation="entities:44459:1" rel="noopener">Baudroie (4413 JP)</a> and <a href="https://www.smartkarma.com/entities/jx-advanced-metals-corporation" target="_blank" data-smartkarma-citation="entities:44346:1" rel="noopener">JX Advanced Metals (5016 JP)</a> are expected to take place at the end of April 2025.</li>
<li>Separately, the 0.75x TOPIX Liquidity Factor removal event will also take place at the same time. We expect one-way flows of US$514mn for this event.</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.
The TOPIX Inclusions of Baudroie (4413 JP) and JX Advanced Metals (5016 JP) are expected to take place at the end of April 2025.
Separately, the 0.75x TOPIX Liquidity Factor removal event will also take place at the same time. We expect one-way flows of US$514mn for this event.


TOPIX Inclusions: Who Is Ready (Apr 2025)

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Ferrotec Corp (6890 JP)

Ferrotec. Accelerating Growth Across Multiple Niche Semi Segments

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...

William Keating

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

The share price has dropped by 33% since last July while sales and profits have started to recover. Demand for power semiconductor substrates is...

Scott Foster

TOPIX Inclusions: Who Is Ready (July 2024)

We have revised our framework to improve the weightings for the key factors in the TSE Prime transfer requirements. Now we see 81 names that can...

Janaghan Jeyakumar, CFA

TOPIX Inclusions: Who Is Ready (Jan 2024)

There are currently 70 names that satisfy all 6 key Segment Transfer requirements based on current data. Another 78 names can satisfy 5 out of 6...

Janaghan Jeyakumar, CFA

TOPIX Inclusions: Who Is Ready (Apr 2025)

There are currently 91 names that satisfy all 5 key Segment Transfer requirements based on current data. Another 127 names can satisfy 4 out of 5...

Janaghan Jeyakumar, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)