Investment Bridge Announces Investment Opinion: Bridge Report on Ferrotec Holdings Corporation Issued: Fiscal Year March 2018 Earnings Results

Investment Bridge, one of Japan’s leading IR services companies, has issued a "Bridge Report” on Ferrotec Holdings Corporation (JASDAQ: 6890) reviewing its earnings results for the fiscal year March 2018 and its earnings estimates for the fiscal year March 2019.

*Bridge Report is an issuer-sponsored third party coverage report. Payment is made to us by the company we are covering.
Therefore, we recognize Bridge Report as "a minor non-monetary benefit" under MIFID 2 regulation.

To view the full report, please go to the website at the URL listed below.
http://www.bridge-salon.jp/report_bridge/archives/eng/6890/20180731.html

Report Highlights

· Sales and operating income rose by 22.7% and 48.6% year-on-year respectively during fiscal year March 2018, marking the fifth consecutive year of increases in both sales and profits, and the third consecutive year that both of them hit record highs. Highly active investments for semiconductor and high levels of semiconductor manufacturing activities contributed to a strong 36.9% year-on-year increase in sales of equipment related business. At the same time, all business segments recorded increases in sales. Increases in operating losses of photovoltaic related business, arising from the booking of disposal loss on slow moving inventories, were successfully absorbed to allow continued improvement in operating income margin. A dividend payment of ¥12 per share is expected to be paid at the term end for a full year dividend payment of ¥24 including the first half dividend which was raised by ¥6 from the previous term (Dividend payout ratio of 31.1%).

·Ferrotec’s earnings estimates for fiscal year March 2019 call for sales and operating income to rise by 8.2% and 16.2% year-on-year respectively. These estimates are based on the outlook for 1.8% and 33.0% increases in the electronic device and equipment related businesses respectively, and a 22.6% year-on-year decline in sales of the photovoltaic related business. With regard to profit, higher overall sales, conclusion of adjustments to the photovoltaic related business, and increases in value addition of thermoelectric module application products are expected to allow operating income margin to improve a step further from 9.3% to 10.0%. The Company expects to pay ¥12 dividends per share at the end of both the first and second halves, for a full year dividend of ¥24 (Dividend payout ratio of 16.8%).

·Ferrotec is expected to be able to achieve its targets of ¥100.0 and ¥10.0 billion in sales and operating income respectively in the near future due to highly aggressive capital investments in semiconductor applications within China sparked by the Chinese Government’s national policy of achieving "Made In China 2025”. In addition, the Company is endeavoring to establish an earnings structure that is resilient to fluctuations in capital investments by strengthening and developing consumable materials used in the production process for semiconductors, cleaning of equipment parts business, and wafer related business. At the same time, efforts are made to expand the businesses of high value added thermoelectric module application products and automobile realm, to become a second cornerstone of business in line with the semiconductor related business. Ferrotec is currently on target with its growth trajectory scenario and future developments should be watched closely.

About Investment Bridge:
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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