We Raise Our Forecasts Factoring for Wider Optical Components Sales

研报英文原文证据摘录

We Raise Our Forecasts Factoring for Wider Optical Components Sales

IdeaM

Investment summary

Upward revisions to guidance

On 18 June, Fujikura revised up F3/27 guidance, raising 1H OP guidance from ¥92bn to

¥174bn (+89% vs. the previous plan) and full-year guidance from ¥211bn to ¥310bn

(+47%). The upward revision was driven by project orders from hyperscalers for optical

component products in the Telecommunication Systems business that had not been

assumed in the initial plan, higher selling prices, and an easing of the previously

anticipated impact from hydrogen shortages.

Our view: We see three factors behind guidance hikes: 1) large project orders for optical

component products, 2) higher selling prices, and 3) an easing of the anticipated impact

from hydrogen shortages. Although Fujikura did not disclose the impact of each factor on

its revisions, based on its comment that “without the hydrogen impact, SWR/WTC sales

volumes could increase by around 10%,” we estimate that the company had factored in a

negative impact of at least ¥15bn from hydrogen shortages at the start of the fiscal year.

Assuming the benefits from higher selling prices and the easing hydrogen impact are

evenly split between 1H and 2H, we calculate that large projects are expected to

contribute ¥65bn in 1H. We therefore estimate that the upward revision can be broken

down as follows: 1) +¥65bn from large project orders, (2) +¥19bn from higher selling

prices, and (3) +¥15bn from the easing hydrogen impact.

We estimate the sales value of large project orders at ¥149bn, all booked in 1H. Based on

the corresponding OP contribution of ¥65bn, this implies an operating margin of roughly

44% for large projects—an extremely high level. This is well above Fujikura’s overall