FUJI's first-quarter operating profit rose sharply year on year as demand for circuit boards for AI servers expanded. The full-year earnings forecast was also revised upward, while the ongoing switch to NXTR contributed to improved margins. However, the share price is susceptible to market conditions, limiting its rise.
FUJI performed strongly on robust demand for AI servers, with first-quarter orders up approximately 97% year on year, net sales up approximately 46%, operating profit up approximately 193% and net income up approximately 122%. The main drivers were increased AI investment and the boost to profitability from the transition to the new NXTR model.
Following the switch to NXTR, the share of old models fell to zero, while NXTR's share rose from 30% in the previous fiscal year to 54%. This contributed to higher margins through improved selling prices and operating rates. The company forecasts orders of ¥256 billion, net sales of ¥244 billion, operating profit of ¥60 billion and net income of ¥44 billion for the current fiscal year, and has raised its full-year plan accordingly.
However, the share price is influenced by market conditions for AI- and semiconductor-related stocks and temporarily fell amid the market sell-off from August onward. Based on comparative P/E ratios, FUJI is viewed as undervalued relative to other major FA equipment manufacturers, although its valuation is close to THK's.
The focus going forward will be the extent to which the sustainability of AI-server demand and the adoption of the new NXTR model contribute to earnings in the next interim results. The share price is dependent on market conditions and is expected to remain susceptible to supply-and-demand dynamics and macroeconomic factors.