DD Evolution — 2026-05-20
2026-05-20 19:16 · 12.6 KB
Type: Deep Evolve | Stocks: 6702.T (Fujitsu), 4047.T (Kanto Denka Kogyo), 5805.T (SWCC)
Previous data_date: 2026-04-14 (36 days stale) | Updated: 2026-05-20
Executive Summary
Three stocks evolved today. All had FY2026 annual results released in May 2026 since last review.
| Ticker | Company | Prev. Conviction | New Conviction | Thesis Status |
|---|---|---|---|---|
| 6702.T | Fujitsu | HIGH | HIGH | HOLD — PE re-rated 12.9x→18x; adj. margin 11.2% milestone |
| 4047.T | Kanto Denka Kogyo | MEDIUM | HIGH | UPGRADED — Mitsui exit confirmed, Rapidus sole supplier confirmed |
| 5805.T | SWCC Corporation | MEDIUM | MEDIUM | HOLD — Record FY2026 but FY2027 deceleration + capacity hangover |
6702.T — Fujitsu
FY2026 Results (April 28, 2026)
| Metric | FY2026 Actual | YoY | Notes |
|---|---|---|---|
| Revenue | ¥3,502.9B | -1.3% | Missed topline |
| IFRS Op. Profit | ¥348.3B | +31.4% | Strong |
| Adj. Op. Profit | ¥390.5B | +27.1% | Record; margin 11.2% — first time >10% in history |
| IFRS Net Income | ¥449.4B | +104.5% | CAUTION: includes ~¥146.3B divestiture gains (SHINKO Electric + General Inc.) |
| Recurring NI | ~¥303B | — | Ex-divestiture; matches FY2027 guided ¥310B |
| Core FCF | ¥289.9B | +24.1% | Strong cash generation |
| Dividend | ¥55/share | +10% |
Metric Changes
| Metric | Previous (Apr 14) | Updated (May 20) | Source |
|---|---|---|---|
| PE (TTM) | 12.9x | 17.95x | StockAnalysis |
| Forward PE | 13.8x | 18.12x | StockAnalysis |
| P/B | 2.9x | ~3.7x | Implied (mkt cap/equity) |
| ROE | 22.7% | 15.8% | Fujitsu IR FY2026 |
| Op. Margin (adj.) | 8.6% | 11.2% | Fujitsu IR FY2026 |
| D/E | 59.0% | 7.0% | StockAnalysis (net cash ¥317B) |
| Div. Yield | 1.5% | 1.79% | ¥55/share |
| FCF | +¥390B | +¥290B (core) | Fujitsu IR (core FCF definition) |
Supply Chain — Verified
| Customer | Product | Status | Date |
|---|---|---|---|
| NVIDIA | Sovereign AI servers — HGX B300 + RTX PRO 6000 Blackwell | ✅ confirmed | 2026-02-12 |
| RIKEN | FugakuNEXT zettascale supercomputer (prime contractor) | ✅ confirmed | 2025-06-18 |
| NEDO/METI | FUJITSU-MONAKA 1.4nm AI chip via Rapidus (2/3 cost funded) | ✅ confirmed | 2026-Q1 |
| Japan AI Foundation | Sovereign AI infrastructure (SoftBank/NEC/Sony/Honda consortium) | ✅ confirmed | 2026-04 |
| UK Post Office | Horizon IT extension — reputational liability | ⚠️ risk | 2025-10 |
Catalysts
- Fired: FY2026 results (Apr 28) — profitability beat, revenue miss
- Upcoming: Mid-to-Long-Term Management Plan May 28, 2026 — new ROE targets, AI revenue roadmap
- Upcoming: Kasashima PCB assembly for Blackwell servers June 2026
- FY2027: FUJITSU-MONAKA 1.4nm tape-out via Rapidus
Thesis: HOLD
The original "cheap PE" thesis (12.9x) no longer holds — PE has re-rated to 17.95x. This is now a quality/momentum/structural-transformation story. Adj. margin 11.2% is a genuine milestone. Net cash ¥317B + ¥150B buyback are shareholder-friendly. Sovereign AI position (Blackwell servers, FugakuNEXT, MONAKA chip) is confirmed and growing.
Thesis breaks if: Revenue stagnation persists in FY2027 without AI segment disclosure showing inflection; or UK Horizon liability forces unexpected provision >£500M.
Risk Flags
- NI INFLATION: Reported NI ¥449.4B includes ~¥146.3B divestiture gains (SHINKO, General Inc.). NOT recurring. FY2027 guided ¥310B (-31%). Do not anchor valuation to FY2026 NI.
- PB guardrail: PB ~3.7x above GuruFocus historical peak 3.02x. ROE 15.8% not yet at target >20%. Premium requires sustained ROE improvement.
- UK Post Office: £0 of ~£2B redress contributed. No provision. Lost Centrica deal. Parliamentary scrutiny ongoing. Unquantified tail risk.
4047.T — Kanto Denka Kogyo
FY2026 Results (May 15, 2026)
| Metric | FY2026 Actual | YoY | vs Guidance |
|---|---|---|---|
| Revenue | ¥65.4B | +4.9% | Beat |
| Op. Profit | ¥5.48B | +28.2% | +22% vs guidance ¥4.5B |
| Ordinary Profit | ¥6.629B | +47.1% | Beat consensus by ~20% |
| Net Income | ¥3.79B | +17.0% | — |
| EPS | ¥65.95 | — | — |
| Dividend | ¥20/share | — | Raised from ¥18 |
FY2027 Guidance — Explosive
| Line | Guidance | YoY |
|---|---|---|
| Revenue | ¥95B | +45% |
| Op. Profit | ¥10B | +82.5% |
| Net Income | ~¥6.8B | +79.7% |
| Dividend | ¥36/share | +80% |
⚠️ Analyst vs management gap: Company FY2027 EPS implied ~¥118; analyst consensus ¥52 — 127% divergence. Key uncertainty.
Metric Changes
| Metric | Previous (Apr 14) | Updated (May 20) | Source |
|---|---|---|---|
| PE (TTM) | 19.6x | 26.5x | Stock re-rated to ¥1,772 |
| Forward PE | N/A | ~15x (co.) / ~34x (analyst) | Guidance vs consensus |
| P/B | N/A | 1.68x | Kanto Denka IR |
| ROE | N/A | 5.0% | Kanto Denka IR FY2026 |
| Op. Margin | ~16% | 8.4% | FY2026 actual |
| D/E | N/A | 54.0% | Derived from equity ratio |
| Div. Yield | N/A | 1.1% | ¥20/share |
| FCF | N/A | -¥3.9B | Heavy capex cycle |
| Conviction | MEDIUM | HIGH | Structural monopoly confirmed |
| Weight | 5% | 7% | Upgraded |
Supply Chain — Verified
| Customer | Product | Status | Date |
|---|---|---|---|
| TSMC Japan (JASM Kumamoto) | NF3 for CVD chamber cleaning | ✅ confirmed | 2025-08-14 |
| Rapidus (Chitose, Hokkaido) | High-purity NF3 for 2nm EUV — SOLE domestic supplier | ✅ confirmed | 2025-08 |
| Samsung | NF3 for semiconductor fabs | ✅ confirmed | 2025-08-14 |
| Kioxia / Sony / Micron | NF3 for NAND/image sensor/memory | ✅ confirmed | 2025-08-14 |
| Mitsui Chemicals | NF3 exit COMPLETE — Kanto Denka sole domestic producer | ✅ structural catalyst | 2026-03 |
Catalysts — All Fired or Active
- Fired: Mitsui Chemicals NF3 exit complete March 2026 — Japan domestic monopoly achieved
- Fired: Full production restoration January 6, 2026 — fire risk resolved
- Fired: FY2026 earnings beat (May 15) — OP +22% vs guidance
- Active: Rapidus IIM-1 ramp 2027 — sole supplier, zero domestic alternative
- Upcoming: Q1 FY2027 earnings (August 2026) — first read on +45% revenue guidance track
Thesis: UPGRADED to HIGH
Japan's sole domestic NF3 producer. Sole Rapidus supplier for 2nm EUV. All three original thesis catalysts have now fired. The earnings inflection (+82.5% OP guided FY2027) reflects the structural monopoly taking effect. Dividend +80% signals management confidence.
Thesis breaks if: (1) Q1 FY2027 revenue materially below ¥23B pace, suggesting guidance was too aggressive; (2) another production incident at Shibukawa plant; (3) Korean/Chinese NF3 imports capture >20% Japan domestic market share.
Risk Flags
- Guidance vs analyst gap (MAJOR): Company FY2027 NI +79.7%, EPS implied ~¥118 vs analyst consensus ¥52 — 127% divergence. Market is not fully pricing in company guidance. Valuation outcome is bifurcated.
- Single-plant concentration: 100% NF3 from Shibukawa (Gunma). August 2025 fire caused 4-month disruption. This structural vulnerability remains.
- FCF negative: -¥3.9B during heavy capex cycle. Monitor if semiconductor demand cycle turns before new capacity utilized.
- PB above history: PB 1.68x is not elevated in absolute terms but ROE only 5.0% (FY2026) suggests limited current return on equity despite future potential.
5805.T — SWCC Corporation
FY2026 Results (May 14, 2026)
| Metric | FY2026 Actual | YoY | Notes |
|---|---|---|---|
| Revenue | ¥277.74B | +16.8% | Record |
| Op. Profit | ¥27.32B | +30.5% | Record |
| Net Income | ¥18.84B | +65.3% | Record |
| EPS | ¥636.48 | — | |
| Dividend | ¥223/share | +64% | Significant increase |
FY2027 Guidance — Deceleration
| Line | Guidance | YoY | vs FY2026 |
|---|---|---|---|
| Revenue | ¥325.0B | +17.0% | Strong topline |
| Op. Profit | ¥28.5B | +4.3% | DECELERATION — market disappointed |
| Dividend | ¥250/share | +27 yen | Continued growth |
Stock reaction: -10.7% on May 14 earnings day. OP guidance +4.3% vs expectations of higher continuation.
Metric Changes
| Metric | Previous (Apr 14) | Updated (May 20) | Source |
|---|---|---|---|
| PE (TTM) | 25.39x | 22.2x | StockAnalysis (stock pullback) |
| Forward PE | N/A | 18.6x | StockAnalysis consensus |
| P/B | 4.14x | 3.92x | IFIS/Minkabu |
| ROE | N/A | 18.1% | StockAnalysis |
| Op. Margin | N/A | 9.84% | FY2026 actual |
| D/E | N/A | 49.0% | StockAnalysis |
| Div. Yield | N/A | 1.61% | ¥223/share at ¥16,680 |
| FCF | N/A | +¥11.1B | OCF-Capex TTM |
| Market Cap | N/A | ¥402B | Minkabu |
Supply Chain — Verified
| Customer | Product | Status | Date |
|---|---|---|---|
| Japanese utilities (TEPCO/KEPCO/CEPCO) | Aging 275kV XLPE cable replacement (¥400B mkt through 2045) | ✅ confirmed | 2025-12-15 |
| Data centers / AI hyperscalers | e-Ribbon® optical fiber (7x capacity by FY2030, ¥20B investment) | ✅ confirmed | 2026-02-27 |
| Semiconductor / EV (via TOTOKU) | Precision specialty wire | ✅ confirmed | 2025-03-27 |
| SFCC (Showa Furukawa Cable) | General-purpose power cables — now 100% subsidiary | ✅ confirmed | 2026-03-31 |
Thesis: HOLD
Execution confirmed (record FY2026). Aging cable replacement oligopoly moat is structural. e-Ribbon + TOTOKU diversify away from commodity power cable. But near-term earnings momentum has peaked (FY2027 OP +4.3% after +30.5%). Market already repriced (-10.7%). Wait for Q1 FY2027 to determine if grid modernization demand can re-accelerate.
Thesis breaks if: FY2027 actual OP falls below ¥25B (further miss on guidance); or optical fiber pricing deteriorates as Furukawa/Fujikura capacity comes online.
Risk Flags
- Capacity hangover (TRIGGERED): All four major Japanese cable makers expanding simultaneously — Furukawa Electric ¥100B HVDC line, Sumitomo Electric ¥40B, Fujikura ¥300B total, SWCC ¥130B. Optical fiber segment at oversupply risk 2028-2030.
- FY2027 guidance deceleration: OP +4.3% after +30.5% = near-term momentum peaked. Copper cost headwinds + capex absorption confirmed by management.
- P/B guardrail: PB 3.92x likely above 80th percentile for industrial. FY2027 OP growing only +4.3% — growth doesn't justify premium over history.
- Competitive gap: SWCC not in RIGHT Project (Japan's major HVDC offshore wind consortium, led by Furukawa). Limited deep-water submarine cable position.
Methodology Notes
- All PE/PB from StockAnalysis.com (Tier 2; split-adjusted, rolling TTM)
- Revenue/OP/NI from company IR filings via Nikkei/Minkabu/Kabutan (Tier 1 equivalent)
- Supply chain verified via TrendForce, Sourceability, official press releases (Tier 1-2)
- Anti-pattern and guardrail checks completed for all three stocks
- D/E caveat: StockAnalysis uses interest-bearing debt only (not total liabilities)
Sources
- Fujitsu FY2026 IR: https://global.fujitsu/-/media/Project/Fujitsu/Fujitsu-HQ/ir/documents/Financial_Results/FY2025/FY/2025FY-Financial-Results-en.pdf (2026-04-28)
- Fujitsu Kasashima server: https://global.fujitsu/en-global/pr/news/2026/02/12-01 (2026-02-12)
- Fujitsu MONAKA chip: https://www.tomshardware.com/tech-industry/fujitsu-plans-dedicated-1-4nm-ai-chip-manufactured-entirely-in-japan-by-rapidus (2026-Q1)
- Kanto Denka FY2027 guidance: https://www.nikkei.com/nkd/disclosure/financial-summary-visual/TDNKDBRST053661915052026/ (2026-05-15)
- Kanto Denka fire/NF3 supply chain: https://www.trendforce.com/news/2025/08/14/news-japans-kanto-denka-kogyo-fire-threatens-nf%E2%82%83-supply-alerts-chipmakers-like-tsmc-and-rapidus/ (2025-08-14)
- Mitsui Chemicals NF3 exit: https://jp.mitsuichemicals.com/en/release/2025/2025_0526_1/index.htm (2025-05-26)
- Rapidus sole supplier: https://sourceability.com/post/supply-chain-shocks-nf3-fire-natcast-fallout (2025-08)
- SWCC FY2026 決算短信: https://minkabu.jp/stock/5805/news/4512917 (2026-05-14)
- SWCC e-Ribbon expansion: https://www.nikkei.com/article/DGXZQOUC274JM0X20C26A2000000/ (2026-02-27)
- Furukawa HVDC ¥100B: https://www.tradingview.com/news/reuters.com,2025:newsml_FWN3VO2Q8:0-furukawa-electric-co-ltd-to-invest-about-100-billion-yen-to-install-hvdc-cable-manufacturing-facilities-in-chiba-japan/ (2025-10)
*Research produced by JPstock-agent evolve round. All data verified against Tier 1-2 sources. Not investment advice.*