Technology

Report by Asymmetric Advisors

Analysts worry that Fujitsu will fall short of its FY3/23 CoE of OP at ¥400bn +83% YoY and their consensus is already much lower at ¥370bn. However, this is +41% YoY, and the impression Asymmetric Advisors gets is that the actual result may be better than that. This leaves the stock trading on an attractive PER of 13x. The other attraction here is buybacks (>¥550bn over the next few years to FY3/25) with FCF of >¥1trn from operating FCF + the gains from divesting stakes in Fujitsu General (shares are +25% since Asymmetric became the only Buy rating on this unloved name) and Shinko, worth c.¥380bn.

Industrials

Report by Asymmetric Advisors

Contrarian Buy opportunity - currently has ZERO analyst BUYs. This air conditioner company will benefit from the recent drop in copper (its most important input cost) which hammered earnings last year. While Fujitsu General and the popular Daikin will both benefit from rising global temperatures, an extremely hot Japanese summer benefits Fujitsu General to a greater extent given its higher domestic exposure. It is also likely to see a surge in heat pump sales in Europe ahead of winter given fears for Russia gas supply. Lastly, 42% holder Fujitsu will sell its stake, potentially sparking a bidding war.