Fujikura has signed a framework agreement with UK Industrial Fusion Solutions Ltd. for the supply of High Temperature Superconductors on May 22, 2025. The company got selected through a competitive bidding process to supply HTS for the Spherical Tokamak for Energy Production program, which is being advanced by UKIFS.
Fujikura Ltd., established in 1910 and headquartered in Koto-ku, Tokyo, is a technology focused company with business philosophy centered around ‘tsunagu’ (connecting) technologies to solve social problems. The Telecommunication Systems Business provides optical wiring solutions for building information infrastructure platforms. The Electronics Business offers cutting-edge applications with advanced precision processing technology, while the Automotive Products Business provides solutions for the automotive industry. The Power Systems Business offers supply of infrastructure products, and the Real Estate Business is centered around leasing and management.
Segment-wise Telecommunication Systems contributed to bulk of the revenue with 46% of sales in FY 24; Electronics, 19%; Automotive Products, 18%; Power Systems, 15%; Real Estate, 1%; and Other, 1%.
Telecommunication to drive FY 25 performance
Fujikura reported impressive performance in FY 24 with gains in margins and profits and achieved the targets for the final year of the 2025 Mid-term Management Plan one year early. Net sales rose 22.5% y/y to JPY979.4bn, driven by continued demand for data centers owing to the increase of generated AI in Telecommunication Systems. Operating profit jumped 95% to JPY135.5bn, with margins rising by 5.1% to 13.8%. Net income therefore surged by 78.6% to JPY91.1bn in FY 24. In the same time ROE improved significantly from16.7% to 24.4%.
The group anticipates net sales and operating profit to increase in Telecommunication Systems in FY 25, driven by sustained demand for data centers. However, net sales and operating profit in Electronics is expected to decrease due to the impact of FX and concern of supply management in downstream. As a result, Fujikura anticipates net sales of JPY481bn in H1 25 and JPY957bn in FY 25. Operating profit is expected to reach JPY58bn in H1FY 25 and JPY122bn in FY 25.
Progressive dividend policy
The company has a progressive dividend policy and in the 2025 Mid-term Management Plan maintained a dividend payout of 30%. Fujikura declared annual dividends of JPY100 per share in FY 24, reflecting a yield of 1.7%. However, the management plans to set the payout at 40% for FY 25, supported by robust performance in FY 24. Therefore, based on FY 25 forecasts, the dividend would be JPY130 per share.
Positive long-term trajectory
Fujikura posted a decent revenue CAGR of 13.5% over FY 21-24 to reach JPY979.4bn. Operating income outpaced revenue growth significantly, with a CAGR of 52.4% over the same period, reaching JPY135.5bn in FY 24, along with a robust increase in margins by 8.1% to 13.8%. Net income therefore surged at a CAGR of 32.6% to JPY91.1bn in FY 24.
Earnings growth has helped to solidify the cash position of the group, strengthening over 2x to JPY185bn as of end-FY 24 from JPY91bn as of end-FY 21. The cash profile has also been bolstered by decent cash generation from operations and offset by increasing capital expenditures.
On the other hand, Nichicon, the company’s local peer, outperformed with a revenue CAGR of 16.1% over the past three years, reaching JPY182bn in FY 24. Operating income jumped at a CAGR of 79% to JPY8.5n in FY 24. Net income therefore posted a CAGR of 69.2% to reach JPY8.3bn in FY 24.
Positive fundamentals driving stock price
Over the past one year, the company’s stock has delivered staggering returns of approximately 103%, reflecting a positive fundamental trajectory. In comparison, Nichicon’s stock fell by about 6% over the same period.
The sharp run-up in share prices has pushed the valuation higher compared to its historical average and Nichicon. Fujikura is currently trading at a P/E of 20.7x, which is higher than its 3-year historical average of 11.6x and Nichicon’s valuation of 11x.
Likewise, in terms of EV/EBITDA, the company is currently trading at 11.1x, which is higher than its 3-year historical average of 5x and that of Nichicon (4.5x).
Fujikura is mostly liked by nine analysts, with all of them having ‘Buy’ ratings for an average target price of JPY7,490, implying upside potential of 25% from the current price. Their views are further supported by an anticipated EBITDA CAGR of 12.7% over FY 24-26, reaching JPY199.4bn, with margins of 18.2% in FY 26. In addition, analysts estimate a net profit CAGR of 14.1%, reaching JPY118.7bn with margins of 10.8% in FY 26, with EPS expected to increase to JPY430.5 in FY 26 from JPY330.3 in FY 24. Likewise, analysts estimate an EBITDA CAGR of 19.2% and a net profit CAGR of 11.3% for Nichicon.
Overall, the company reported solid performance in FY 24, exceeding 2025 Mid-term Management targets, supported by high demand for data centers in the Telecommunication Systems business. In addition, the other business verticals complemented growth in fundamentals. However, the group is prone to few risks including FX volatility, US tariff risks and supply chain challenges.
