Fujikura Ltd

Commonwealth Fusion Systems has signed a landmark long-term supply agreement with Fujikura Ltd. to purchase more than 10,000 km (3 GA-m) of high-temperature superconducting tape, the largest single order of its kind for HTS tape. The tape will be used in the development of CFS' ARC power plants, starting with the first grid-scale plant at the Fall Line Fusion Power Station in Chesterfield County, Virginia. As part of the agreement, Fujikura is investing in expanding its manufacturing capacity to deliver the tape at scale. CFS CEO and co-founder Bob Mumgaard said the partnership shows the company is actively placing orders and preparing to execute its ARC power plant once its SPARC fusion machine achieves Q>1. Fujikura President and CEO Naoki Okada said the deal strengthens Fujikura's position as a key HTS tape supplier for ARC power plants while building a long-term business platform for the 2030s and beyond.

Fujikura has sharply raised its full-year forecast for the fiscal year ending March 2027, more than doubling its operating profit projection from 211 billion yen to 432 billion yen. Net sales are expected to rise 48.4% to 1.755 trillion yen, ordinary profit to increase 127.1% to 453 billion yen, and net profit to grow 107.4% to 326 billion yen. The upgrade follows first-quarter operating profit for the fiscal year ending March 2027 of 104.8 billion yen, which exceeded half of the previous full year's 188.7 billion yen, with progress at the first-quarter mark standing at 24.3% for operating profit, 22.9% for net sales, and 24.7% for net profit, all on track with the plan. For the fiscal year ended March 2026, consolidated net sales rose 20.7% year on year to 1.1823 trillion yen, operating profit climbed 39.2% to 188.7 billion yen, and net profit jumped 72.5% to 157.1 billion yen, with the information and communications business generating 653 billion yen in net sales and 152.7 billion yen in operating profit on growing data center demand, accounting for more than 80% of consolidated operating profit. Forecast net profit per share is 196.88 yen, and the planned dividend is 38 yen per share.

Fujikura shares rose 8% to ¥5,493 on September 9, recovering more than 10% from the September 3 low of ¥4,951. In the first quarter of fiscal year ending March 2027, the company reported sales of ¥402 billion, operating profit of ¥104.8 billion, ordinary profit of ¥111.5 billion, and net profit attributable to parent shareholders of ¥80.4 billion. The full-year forecast issued at the same time calls for sales of ¥1.755 trillion, operating profit of ¥432 billion, and net profit of ¥326 billion, representing a 128.9% increase in operating profit and a 107.4% increase in net profit from the previous year. This is more than double the initial plan of ¥211 billion in operating profit, which the company says reflects actual results rather than conservative assumptions. By segment, the information and communication business accounted for sales of ¥264.4 billion and operating profit of ¥98 billion, representing over 90% of total operating profit, with an operating margin of 37.1%. The stock's valuation is at a PER of 27.9 times and a PBR of 14.95 times, suggesting that the market is effectively pricing in the growth potential of the information and communication segment.

Fujikura's share price closed on August 25 at 5,292 yen, up 5.5% from the previous trading day. Of the consolidated operating profit of 188.7 billion yen for the fiscal year ending March 2026, the information and communications business segment accounted for 152.7 billion yen, or 80%, and its share of sales reached 55.2%. The segment's operating margin was 23.4%, helped by growing demand for data centers. Over the past month, the stock has risen more than 60% from a low of 3,720 yen to a high of 6,078 yen, with a price-to-book ratio of 14.4 times and return on equity of 32.5%, far exceeding the average for the nonferrous metals sector.

Fujikura has revised upward its consolidated net profit forecast for the fiscal year ending March 2027, from the previous 229 billion yen to 326 billion yen. The main driver is expanding demand for optical component products for data centers, significantly exceeding the consensus forecast of 235 billion yen from 14 analysts compiled by IBES. The revenue forecast has been raised from 1.462 trillion yen to 1.755 trillion yen, and the operating profit forecast from 310 billion yen to 432 billion yen. The annual dividend forecast remains unchanged at 38 yen.