Nittobo (3110): Briefing: Growth prospects for NER glass cloth have improved

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Nittobo (3110): Briefing: Growth prospects for NER glass cloth have improved

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Nittobo (3110)

Briefing: Growth prospects for NER glass

cloth have improved

Maintain Rating: BUY | PO: 32,000 JPY | Price: 29,000 JPY

12 May 2026

Earnings: Weak profit outlook is negative Equity

Nittobo’s operating profit (OP) for FY3/26 came in at ¥20.8bn, broadly in line with our

estimate of ¥20.5bn. Company guidance for FY3/27 OP is ¥26.0bn, below consensus of Takashi Enomoto >>

¥28.9bn and our prior estimate of ¥28.0–30.0bn. Nittobo has factored in supply‑chain ResearchBofAS JapanAnalyst

risk related to Middle East developments of ¥1.0–2.0bn, which we see as the key reason +81 3 6225 8362

for the gap versus our prior forecast. The company has revised FY3/28 targets to OP of takashi.enomoto@bofa.com

¥36.0bn (consensus ¥38.2bn) and capital expenditure of around ¥40.0bn (vs. FY3/27 plan NiimaResearchKomuraAnalyst>>

of ¥45.0bn). While the weak profit outlook and weaker‑than‑expected FY3/28 volume BofAS Japan

+81 3 6225 7725

growth for T‑glass cloth (as discussed below) are negative, the volume outlook for NER niima.komura@bofa.com

glass cloth is significantly stronger than expected, which we view positively. Kyoji Chiba >>

Research Analyst

Briefing (see from p3): Spike in NER glass cloth demand BofAS+81 3 6225Japan7189

Key points from the briefing are as follows. Volumes of T‑glass cloth are expected to kyoji.chiba@bofa.com

rise by around +25% YoY in FY3/27 and +35% to +40% YoY in FY3/28, while NER glass

cloth volumes are projected to increase by around +60% YoY in FY3/27 and close to

+100% in FY3/28. NER glass cloth is expected to be used not only in 800GbE but also in Stock Data

1.6TbE switches and routers, extending its lifecycle. Capacity for T‑glass cloth will