Market Overview

Investment Bridge Announces Investment Opinion: Bridge Report on Ferrotec Holdings Corporation Issued: Fiscal Year March 2018 Earnings Results


Investment Bridge, one of Japan's leading IR services companies, has
issued a "Bridge Report" on Ferrotec Holdings Corporation (JASDAQ: 6890)
reviewing its earnings results for the fiscal year March 2018 and its
earnings estimates for the fiscal year March 2019.

*Bridge Report is an issuer-sponsored third party coverage report.
Payment is made to us by the company we are covering.
Therefore, we
recognize Bridge Report as "a minor non-monetary benefit" under MIFID 2

To view the full report, please go to the website at the URL listed

Report Highlights

・ Sales and operating income rose by 22.7% and 48.6% year-on-year
respectively during fiscal year March 2018, marking the fifth
consecutive year of increases in both sales and profits, and the third
consecutive year that both of them hit record highs. Highly active
investments for semiconductor and high levels of semiconductor
manufacturing activities contributed to a strong 36.9% year-on-year
increase in sales of equipment related business. At the same time, all
business segments recorded increases in sales. Increases in operating
losses of photovoltaic related business, arising from the booking of
disposal loss on slow moving inventories, were successfully absorbed to
allow continued improvement in operating income margin. A dividend
payment of ¥12 per share is expected to be paid at the term end for a
full year dividend payment of ¥24 including the first half dividend
which was raised by ¥6 from the previous term (Dividend payout ratio of

・Ferrotec's earnings estimates for fiscal year March 2019 call for sales
and operating income to rise by 8.2% and 16.2% year-on-year
respectively. These estimates are based on the outlook for 1.8% and
33.0% increases in the electronic device and equipment related
businesses respectively, and a 22.6% year-on-year decline in sales of
the photovoltaic related business. With regard to profit, higher overall
sales, conclusion of adjustments to the photovoltaic related business,
and increases in value addition of thermoelectric module application
products are expected to allow operating income margin to improve a step
further from 9.3% to 10.0%. The Company expects to pay ¥12 dividends per
share at the end of both the first and second halves, for a full year
dividend of ¥24 (Dividend payout ratio of 16.8%).

・Ferrotec is expected to be able to achieve its targets of ¥100.0 and
¥10.0 billion in sales and operating income respectively in the near
future due to highly aggressive capital investments in semiconductor
applications within China sparked by the Chinese Government's national
policy of achieving "Made In China 2025". In addition, the Company is
endeavoring to establish an earnings structure that is resilient to
fluctuations in capital investments by strengthening and developing
consumable materials used in the production process for semiconductors,
cleaning of equipment parts business, and wafer related business. At the
same time, efforts are made to expand the businesses of high value added
thermoelectric module application products and automobile realm, to
become a second cornerstone of business in line with the semiconductor
related business. Ferrotec is currently on target with its growth
trajectory scenario and future developments should be watched closely.

About Investment Bridge:
Investment Bridge was founded in August
2000 and is one of Japan's leading independent IR support services
companies. Investment Bridge specializes in providing various solutions
to Japan's publicly traded companies with the goal of expanding our
clients' shareholder base and liquidity through increased recognition
and understanding of companies.

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