Investment Bridge Announces Investment Opinion: Bridge Report on Ferrotec Holdings Corporation: The Company Continues to Expect Strong Growth in FY3/18

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 2017 and its earnings estimates for the fiscal year March 2018.

Report Highlights

• In fiscal year March 2017, Sales and operating income rose by 6.3% and 41.1% year-on-year respectively.
• Ferrotec’s earnings estimates call for sales and operating income to rise by 12.4% and 26.8% year-on-year respectively during fiscal year March 2018.

Ferrotec Holdings 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.

During fiscal year March 2017, sales and operating income rose by 6.3% and 41.1% year-on-year. Increases in profitability of the Equipment Related and electronic device businesses, and an improvement in the profitability of the photovoltaic related business allowed operating income to rise by a large margin. Also, an increase in earnings form equity accounting method allowed ordinary income to rise by 48.5% year-on-year. With regard to sales, the consolidation of the industrial use cleaning equipment manufacturer and sales company Asahi Seisakusho Co., Ltd. yielded a large contribution. Yearend dividend payment was raised by ¥6 including a ¥2 per share commemorative dividend to celebrate the implementation of a holding company structure, bringing the anticipated yearend dividend payment to ¥12 per share and the full year dividend to ¥18 (A ¥8 increase from the previous term).

Ferrotec’s estimates call for 12.4% and 26.8% year-on-year increases in sales and operating income during fiscal year March 2018. And while sales of photovoltaic related business are expected to decline by 20.1% year-on-year due to restructuring efforts, strong demand for various products responding to increases in capital investments is expected to allow sales of the Equipment Related business to rise by 27.9% year-on-year, and sales of the electronic device business are expected to rise by 6.5% based on an assumption of slowing automobile sales in North America. Economies of scale and automation are expected to allow operating income margin to improve a step further, and operating income to continue to grow. Dividend is expected to be raised by ¥2 to ¥20 per share (¥10 dividends at both the interim and yearend).

Demand for data center memory equipment and smartphone application semiconductors are growing. Expansion in IoT applications for industrial machinery and the appearance of self-driving cars are expected to contribute to strong long term growth in semiconductor demand. At the same time, Ferrotec boasts of similar levels of manufacturing and marketing as local companies in China and should therefore fully benefit from the Chinese Government’s "Made in China Plan”.

To view the full report, please go to the website at the URL listed below.
http://www.bridge-salon.jp/report_bridge/archives/eng/6890/20170726.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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