Investment Bridge Announces Investment Opinion: Bridge Report on Ferrotec Corporation: Strong Growth in FY3/16, the Company Continues to Expect Steady Growth in FY3/17

Investment Bridge, one of Japan’s leading IR services companies, has issued a "Bridge Report” on Ferrotec Corporation (JASDAQ:6890) reviewing its earnings results for the fiscal year March 2016 and its earnings estimates for the fiscal year March 2017.

Report Highlights

• Sales and operating income in the fiscal year March 2016 rose by 17.6% and 140.8% year-on-year respectively.
• Ferrotec’s earnings estimates call for sales and operating income to rise by 8.0% and 24.2% year-on-year respectively during fiscal year March 2017.
• Ferrotec will endeavor to achieve its sales and operating income targets of ¥100.0 and ¥8.0 billion respectively in fiscal year March 2019.

Ferrotec Corporation manufactures and sells silicon single and multiple crystal manufacturing equipment and other products in the photovoltaic related products segment, semiconductor manufacturing equipment, flat panel display (FPD) manufacturing equipment parts, semiconductor materials, and various thermoelectric temperature controllers widely used in personal computers, cellular telephones, and devices using liquid crystal and plasma technologies.

Sales and operating income rose by 17.6% and 140.8% year-on-year respectively during fiscal year March 2016. Growth in automobile seat automated heating and other applications of thermoelectric modules allowed sales of the electronic device business to rise by 37.7% year-on-year, and favorable demand for materials used in semiconductor manufacturing process allowed sales of the production device business to grow by 18.2% year-on-year. With regards to the photovoltaic related business, growth in sales of quartz crucibles in China and India offset difficulties in photovoltaic silicon and silicon crystals and allowed this segment’s sales to rise by 3.1% year-on-year. An increase in the share of the production device and electronic device businesses relative to total sales allowed gross profit margins to improve. Dividend payment is expected to be raised by ¥2 per share to ¥10.

Ferrotec’s earnings estimates call for sales and operating income to rise by 8.0% and 24.2% year-on-year respectively during fiscal year March 2017. Peaking out of both the strength of the yen and automobile sales in North America and subsequent lower sales of thermoelectric modules are expected to contribute to an 8.5% year-on-year decline in electronic device business sales. However, original equipment manufacturer (OEM) and other applications of photovoltaic use silicon and photovoltaic use cells, which have been drivers of growth in China and India, are expected to allow sales of the photovoltaic related business to rise by 27.3% year-on-year. Furthermore, the outlook for the photovoltaic related business to turn profitable is expected to allow operating income to recover to the ¥5.0 billion level for the first time since fiscal year March 2011. Dividend is expected to be raised by ¥2 per share to ¥12 (¥6 per share paid at the end of both the first half and full year).

Ferrotec will endeavor to achieve its sales and operating income targets of ¥100.0 and ¥8.0 billion respectively in fiscal year March 2019. Growth in OEM applications of photovoltaic use multiple crystal silicon (Wafers) sold to major North American customers are expected to grow, along with a shift from crucibles and silicon pulling equipment to semiconductor related applications. In the production device business, manufacturing and sales of eight inch wafers used in semiconductor applications will begin. The range of applications of CVD-SiC products used in nuclear power generation, aeronautics and space development and other non-semiconductor applications will be expanded. In the electronic device business, efforts will be made to expand applications of thermoelectric modules in the realms of automobile related (Electric power, cooling), units, and high power device substrates.

To view the full report, please go to the website at the URL listed below.
http://www.bridge-salon.jp/report_bridge/archives/eng/6890/20160808.html

About Bridge Report:
Bridge Report is produced by Investment Bridge Co., Ltd. and provides accurate and objective information about the earnings, business strategies, and other information of publicly traded Japanese companies. 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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