Fujikura "Medium-term plan outlines large-scale investment scenario...."

研报英文原文证据摘录

Fujikura "Medium-term plan outlines large-scale investment scenario...."

cable segment. Although

the new medium-term plan clarified the schedule for this expansion, our impression is that

uncertainty remains in regard to cost increases and risks associated with the external procurement of

materials and optical fiber core wires. While there is no change in the top-line growth scenario, we

believe that margin assumptions will likely require careful assessment. Clarifying the scenario for

returns commensurate with risk-taking will likely be the next key focus.

Within the medium-term plan are: 1) financial targets for FY3/29, including OP of ¥315.0bn

(¥188.7bn in FY3/26), of which the target for telecommunications systems OP is ¥285.0bn

(¥152.7bn), and ROE of 28.5% (32.5%), 2) projected cumulative operating cash flow (CF) over three

years of ¥620.0bn, with fund allocation comprising ¥530.0bn for investments and ¥220.0bn for

shareholder returns (dividend payout ratio of 40%). With a target of a 50% equity ratio, the

company plans to consider additional investments and shareholder returns, 3) expectations for a

strong growth rate in sales during the covered period. The planned increase in optical fiber/cable

(SWR / WTC) volume is expected to be accomplished on the back of productivity improvements at

existing facilities and the external procurement of fiber cores under long-term contracts. In optical

multi-fibre connectors, most of the additional sales volume is expected to come from high-value-

added MMC products, and 4) as an initiative to increase revenue, the goal of market share through

developing its business as a total solution provider by combining high-value-added optical fiber

fusion splicers where it holds a strong market share with engineering services.