Asia Pacific Equity Research

14 August 2015

Neutral

Fuji Electric (6504)

Previous: Overweight

Downgrade to Neutral on Achievement of Price Target

Price: 557

6504.T, 6504 JT

Operating profit beat guidance by around 2 billion in April-June, mainly thanks

to cost cutting. Earnings were strong in the power electronics segment, which
includes drive systems, thanks to growth in demand for inverters, servos and
rotary equipment. Profit was down marginally in electronic devices, because of a
decline in the number of auto models in which the companys power devices were
used and the macro-economic slowdown in China. Fixed costs will rise
temporarily this fiscal year due to investment in the new technology development
facility at Suzuka. While we expect earnings to remain strong, the share price is
already within our target range, so we downgrade the stock to Neutral.
Earnings beat in April-June due to cost cutting: Earnings were strong in the
power generation and social infrastructure segment (20% of operating profit);
declined in the industrial infrastructure segment (27%), due to an absence of big
power transformer projects; were strong in the power electronics segment
(21%); declined in semiconductors in the electronic devices segment (22%) but
rose in disk media due to the situation at customers; and declined in Japan but
rose in China in the food and beverage distribution segment (19%).
Investing in medium-term growth of power electronics: R&D spending is
budgeted to grow by 4.4 billion overall in FY2015, due to forward looking
investment in the new technology development facility at Suzuka. Of the 7.9
billion growth budgeted for capital expenditure, 3.1 billion will go on power
electronics. Management posits this fiscal year as a period of forward looking
investment in improving the competitiveness of power electronics. Demand for
mega-solar systems had declined, but we see strong latent demand in the thermal
power generation, geothermal and hydropower businesses.

Price Target: 570

Japan Equity Research

Electronics/Precision & Industrial
Hisashi Moriyama

AC

(81-3) 6736-8601
hisashi.moriyama@jpmorgan.com
Bloomberg JPMA MORIYAMA <GO>
JPMorgan Securities Japan Co., Ltd.
Price Performance
700
600

500
400
Aug-14

Nov-14

Feb-15

May-15

Aug-15

6504.T share price ()

TOPIX (rebased)

Abs
Rel

YTD
15.1%
-3.4%

1m
8.8%
5.4%

3m
-3.3%
-7.3%

12m
8.8%
-23.4%

Maintain price target of 570; downgrade to Neutral: Our price target

equates to an FY2015 EV/EBITDA of 7.2x based on our forecasts (P/E of
13.7x). It derives from a sum-of-the-parts methodology that discounts the
average FY2015 EV/EBITDA of 7.4x (previously 8.1x) by 0.2pt (0.9pt) to allow
for the risks of slowdowns in orders and the macro-economy. We also extend
the period for our achievement of our price target from December 2015 through
December 2016.
Fuji Electric Co., Ltd. (Reuters: 6504.T, Bloomberg: 6504 JT)
2014/3
2015/3
2016/3 E
Sales ( mn)
759,911
810,678
850,000
Operating Profit ( mn)
33,136
39,316
46,000
Recurring Profit ( mn)
36,731
43,139
47,000
Net Profit ( mn)
19,582
27,978
29,700
EPS ()
27.40
39.15
41.56
BPS ()
317.88
447.24
484.60
ROE
9.3%
10.2%
8.9%
P/E (x)
20.3
14.2
13.4
P/BV (x)
1.8
1.2
1.1
EV/EBITDA (x)
9.4
7.7
7.2
Source: Company data, Bloomberg, J.P. Morgan estimates.

2017/3 E
914,000
50,000
51,000
32,100
44.92
525.32
8.9%
12.4
1.1
4.6

2018/3 E
966,000
55,500
56,500
37,550
52.54
573.67
9.6%
10.6
1.0
4.7

Company Data
Price ()
Date Of Price
Market Cap ( bn)
Market Cap ($ bn)
Shares O/S (mn)
52-week Range ()
TOPIX
DPS ()
Dividend Yield
ROE
Price Target ()
Price Target End Date

557
12 Aug 15
398.08
3.20
715
617-421
1,665.75
10.00
1.8%
8.9%
570
30-Dec-16

See page 9 for analyst certification and important disclosures, including non-US analyst disclosures.
J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that
the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single
factor in making their investment decision.
www.jpmorganmarkets.com

JPMorgan Securities Japan Co., Ltd.

Hisashi Moriyama
(81-3) 6736-8601
hisashi.moriyama@jpmorgan.com

Asia Pacific Equity Research

14 August 2015

Fuji Electric (6504)

Investment Thesis Risk Analysis

Company Profile

Japans fourth-largest heavy electrical equipment

Upside Scenario to Target Price/Rating
manufacturer. Established in 1923. Focusing on
Earnings from inverters and power semiconductors could
environment/energy-related equipment such as power
overshoot thanks to accelerated Capex in Asia and China.
generation equipment (thermal, geothermal), inverters, power
semiconductors).

Downside Scenario to Target Price/Rating

Earnings from power semiconductors could undershoot
owing to increased competition and inventory
adjustments.

FY2014 Sales Composition

%
Food &
Beverage
Distribution
13%

Energy and
Social infra
25%

Others
7%

Electronic
Devices
16%

Power
Electronics
21%

Industrial
Infrastructure
23%

Source: J.P. Morgan estimates. *Excluding Eliminations.

Operating Profit Forecasts: J.P. Morgan versus Consensus

Valuation

billion

Maintain price target of 570. Our price target equates to an

FY2015 EV/EBITDA of 7.2x based on our forecasts (P/E of
13.7x). It derives from a sum-of-the-parts methodology that
discounts the average FY2015 EV/EBITDA of 7.4x
(previously 8.1x) by 0.2pt (0.9pt) to allow for the risks of
slowdowns in orders and the macro-economy. We also
extend the period for our achievement of our price target
from December 2015 through December 2016.

J.P. Morgan
46.0
50.0

FY2015E
FY2016E

Consensus
41.7
46.7

Source: J.P. Morgan estimates, Bloomberg.

Assumptions & Sensitivity Metrics (Impact on FY2015 Profits)

Factor
/$ rate
/Euro rate

Company
Assumption
115
125

J.P.Morgan
120
132

1/$
1/Euro

Impact
OP (mn)
90
70

Source: Company

Peer Valuations Based on Bloomberg Consensus

Company name
Fuji Electric Co Ltd
Hitachi Ltd
Toshiba Corp
Mitsubishi Electric
Rockwell Automation
Siemens
Schneider Electric

Bloomberg
Ticker
Currency
6504 JT
JPY
6501 JT
JPY
6502 JT
JPY
6503 JT
JPY
ROK US
USD
SIE GR
EUR
SU FP
EUR

Price
557
770
370
1,341
115.84
96.25
60.73

Date
Aug-12
Aug-12
Aug-12
Aug-12
Aug-12
Aug-12
Aug-12

Source: Bloomberg. Note: Market caps are calculated using forex rates as of August 12.

Market Cap
($mn)
15E
3,346
13.2
29,930
10.9
12,627 -1833.2
23,170
12.5
15,535
17.5
76,056
14.9
32,006
15.4

P/E(x)
16E
12.0
9.8
8.4
11.7
16.6
13.8
13.8

17E
11.0
9.0
7.7
11.0
15.2
12.6
12.5

15E
1.28
1.16
1.28
1.44
5.88
2.49
1.69

P/B(x)
16E
1.18
1.06
1.07
1.31
5.46
2.31
1.63

17E
1.07
0.97
0.96
1.20
5.15
2.09
1.54

ROE(%)
15E
10.0
10.5
4.7
12.0
32.8
20.5
10.6

JPMorgan Securities Japan Co., Ltd.

Hisashi Moriyama
(81-3) 6736-8601
hisashi.moriyama@jpmorgan.com

Asia Pacific Equity Research

14 August 2015

Figure 1: Sales by Segment (Annual)

million, %
2014/3

Sales by segment
Power & Social Infrastructure
Power Plant
Social Engineering Systems
Social Information
Industrial Infrastructure
Transmission and Distribution
Machinery and Electronics
Instrumentation and Control
Equipment Construction
Power Electronics
Drive
Power Supply
ED&C Components
Electronic Devices
Semiconductor
Magnetic Disks
Food & Beverage Distribution
Vending Machines
Store Distribution
Others
Elimination
Total Sales
YoY
Power & Social Infrastructure
Industrial Infrastructure
Power Electronics
Electronic Devices
Food & Beverage Distribution
Others
Elimination

2015/3

2016/3E
old

2016/3E
new

2017/3E
old

2017/3E
new

2018/3E
old

2018/3E
new

2016/3CoE 2016/3CoE
4/27
7/30

152,321
71,600
30,500
50,300
189,548
51,200
41,700
43,600
53,100
174,745
69,900
33,200
71,600
123,049
99,700
23,400
120,056
74,400
45,600
59,998
-59,808
759,911

169,200
79,500
40,600
49,100
191,400
53,600
42,100
42,100
55,500
200,900
78,400
40,200
82,400
137,189
108,400
28,800
119,113
72,700
46,500
61,203
-68,300
810,678

176,600
88,300
38,900
52,000
208,600
58,400
52,200
35,500
62,600
219,500
85,600
57,100
76,800
137,300
111,200
26,100
120,000
64,800
55,200
61,400
-73,400
850,000

178,100
88,300
40,400
49,400
209,100
58,400
52,600
35,500
62,600
219,500
85,600
57,100
76,800
135,300
109,200
26,100
120,000
62,800
57,200
61,400
-73,400
850,000

189,000
95,000
40,000
54,000
220,000
60,000
55,000
40,000
65,000
228,000
90,000
60,000
78,000
159,000
132,000
27,000
133,000
75,000
58,000
60,000
-75,000
914,000

187,900
95,000
40,400
52,500
220,400
60,000
55,400
40,000
65,000
228,700
90,000
60,700
78,000
159,000
132,000
27,000
133,000
73,000
60,000
60,000
-75,000
914,000

202,000
100,000
48,000
54,000
238,000
65,000
55,000
50,000
68,000
238,000
95,000
65,000
78,000
171,000
143,000
28,000
140,000
80,000
60,000
60,000
-75,000
974,000

192,900
100,000
40,400
52,500
238,400
65,000
55,400
50,000
68,000
238,700
95,000
65,700
78,000
171,000
143,000
28,000
140,000
78,000
62,000
60,000
-75,000
966,000

176,600
88,300
38,900
49,400
208,600
58,400
52,200
35,500
62,600
219,500
85,600
57,100
76,800
137,300
111,200
26,100
120,000
64,800
55,200
61,400
-73,400
850,000

178,100
209,100
219,500
135,300
120,000
61,400
-73,400
850,000

1.9%
-2.9%
-4.6%
17.8%
8.3%
7.1%
-1.0%
34.5%

6.7%
11.1%
1.0%
15.0%
11.5%
-0.8%
2.0%
14.2%

4.9%
0.8%
5.3%
19.2%
0.1%
0.7%
0.3%
14.3%

4.9%
5.3%
9.2%
9.3%
-1.4%
0.7%
0.3%
7.5%

7.5%
7.0%
5.5%
3.9%
15.8%
10.8%
-2.3%
2.2%

7.5%
5.5%
5.4%
4.2%
17.5%
10.8%
-2.3%
2.2%

6.6%
6.9%
8.2%
4.4%
7.5%
5.3%
0.0%
0.0%

5.7%
2.7%
8.2%
4.4%
7.5%
5.3%
0.0%
0.0%

4.9%
0.8%
5.3%
19.2%
0.1%
0.7%
0.3%
14.3%

4.9%
5.3%
9.2%
9.3%
-1.4%
0.7%
0.3%
7.5%

Source: Company data, J.P. Morgan estimates, segment breakdowns are J.P. Morgan estimates

JPMorgan Securities Japan Co., Ltd.

Hisashi Moriyama
(81-3) 6736-8601
hisashi.moriyama@jpmorgan.com

Asia Pacific Equity Research

14 August 2015

Figure 2: OP by Segment (Annual)

million, %
2014/3

2015/3

2016/3E
old

2016/3E
new

2017/3E
old

2017/3E
new

2018/3E
old

2018/3E
New

2016/3CoE
4/27

2016/3CoE
7/30

OP by segment
Power & Social Infrastructure
Industrial Infrastructure
Power Electronics
Electronic Devices
Semiconductor
Magnetic Disks
Food & Beverage Distribution
Others
Elimination
Total OP

7,659
9,624
5,331
6,472
5,800
600
8,047
1,912
-5,909
33,136

7,800
11,100
7,600
8,071
7,300
800
8,527
1,882
-5,676
39,316

9,000
12,500
9,600
10,300
8,300
2,000
8,800
1,900
-6,100
46,000

9,000
12,500
9,600
10,300
8,300
2,000
8,800
1,900
-6,100
46,000

10,000
13,500
10,000
12,000
10,000
2,000
9,000
2,000
-6,500
50,000

10,000
13,500
10,000
12,000
10,000
2,000
9,000
2,000
-6,500
50,000

11,500
14,500
11,000
14,000
12,000
2,000
9,000
2,000
-6,500
55,500

11,500
14,500
11,000
14,000
12,000
2,000
9,000
2,000
-6,500
55,500

8,400
12,500
9,600
10,300
8,300
2,000
8,500
1,900
-6,100
45,000

8,900
13,000
9,600
9,300
8,500
1,900
-6,100
45,000

OPM by segment
Power & Social Infrastructure
Industrial Infrastructure
Power Electronics
Electronic Devices
Semiconductor
Magnetic Disks
Food & Beverage Distribution
Others
Elimination
Total OPM

5.0%
5.1%
3.1%
5.3%
5.8%
2.6%
6.7%
3.2%
9.9%
4.4%

4.6%
5.8%
3.8%
5.9%
6.7%
2.8%
7.2%
3.1%
8.3%
4.8%

5.1%
6.0%
4.4%
7.5%
7.5%
7.7%
7.3%
3.1%
8.3%
5.4%

5.1%
6.0%
4.4%
7.6%
7.6%
7.7%
7.3%
3.1%
8.3%
5.4%

5.3%
6.1%
4.4%
7.5%
7.6%
7.4%
6.8%
3.3%
8.7%
5.5%

5.3%
6.1%
4.4%
7.5%
7.6%
7.4%
6.8%
3.3%
8.7%
5.5%

5.7%
6.1%
4.6%
8.2%
8.4%
7.1%
6.4%
3.3%
8.7%
5.7%

6.0%
6.1%
4.6%
8.2%
8.4%
7.1%
6.4%
3.3%
8.7%
5.7%

4.8%
6.0%
4.4%
7.5%
7.1%
3.1%
8.3%
5.3%

4.8%
6.0%
4.4%
7.5%
7.1%
3.1%
8.3%
5.3%

OP breakdown
Power & Social Infrastructure
Industrial Infrastructure
Power Electronics
Electronic Devices
Semiconductor
Magnetic Disks
Food & Beverage Distribution
Others
Elimination

23%
29%
16%
20%
90%
10%
24%
6%
-18%

20%
28%
19%
21%
90%
10%
22%
5%
-14%

20%
27%
21%
22%
18%
4%
19%
4%
-13%

20%
27%
21%
22%
18%
4%
19%
4%
-13%

20%
27%
20%
24%
20%
4%
18%
4%
-13%

20%
27%
20%
24%
20%
4%
18%
4%
-13%

21%
26%
20%
25%
22%
4%
16%
4%
-12%

21%
26%
20%
25%
22%
4%
16%
4%
-12%

19%
28%
21%
23%
18%
4%
19%
4%
-14%

19%
28%
21%
23%
18%
4%
19%
4%
-14%

Source: Company data, J.P. Morgan estimates, segment breakdowns are J.P. Morgan estimates

JPMorgan Securities Japan Co., Ltd.

Hisashi Moriyama
(81-3) 6736-8601
hisashi.moriyama@jpmorgan.com

Asia Pacific Equity Research

14 August 2015

Figure 3: Income Statement (Annual)

million, %
2014/3
Sales
COGS
GP
SG&A
Total OP
Non-OP
Non-OP expense
RP
Extra ordinary profit
Extra ordinary loss
Pre tax income
Taxes
Minority interest
Net profits

759,911
579,857
180,055
146,918
33,136
7,170
3,576
36,731
913
3,907
33,737
11,982
2,172
19,582

810,678
609,376
201,302
161,985
39,316
8,321
4,499
43,139
7,703
5,123
45,719
14,918
2,822
27,978

2016/3E
old
850,000
646,750
203,250
157,250
46,000
4,800
3,800
47,000
0
2,000
45,000
13,500
1,800
29,700

76.3
23.7
18.5
4.4
4.8
4.4
2.6
35.0

75.2
24.8
18.5
4.8
5.3
5.6
3.5
32.6

76.1
23.9
18.5
5.4
5.5
5.3
3.5
30.0

74.6
25.4
20.0
5.4
5.5
5.3
3.5
30.0

76.0
24.0
18.5
5.5
5.6
5.4
3.5
30.0

74.5
25.5
20.0
5.5
5.6
5.4
3.5
30.0

75.8
24.2
18.5
5.7
5.8
5.8
3.9
30.0

74.3
25.7
20.0
5.7
5.8
5.8
3.9
30.0

1.9
13.7
7.8
50.7
42.8
103.0
-25.7

6.7
11.8
10.3
18.7
17.4
35.5
42.9

4.9
1.0
-2.9
17.0
9.0
-1.6
6.2

4.9
7.3
4.9
17.0
9.0
-1.6
6.2

7.5
7.8
7.5
8.7
8.5
8.9
8.1

7.5
7.8
7.5
8.7
8.5
8.9
8.1

6.6
7.6
6.6
11.0
10.8
15.3
17.0

5.7
6.8
5.7
11.0
10.8
15.3
17.0

% to Sales
COGS
GP
SG&A
Total OP
RP
Pre tax income
Net profits
Effective tax rate (%)
YoY(%)
Sales
COGS
SG&A
Total OP
RP
Pre tax income
Net profits

2015/3

2016/3E
new
850,000
634,000
216,000
170,000
46,000
5,500
4,500
47,000
0
2,000
45,000
13,500
1,800
29,700

2017/3E
old
914,000
694,910
219,090
169,090
50,000
4,800
3,800
51,000
0
2,000
49,000
14,700
2,200
32,100

2017/3E
new
914,000
681,200
232,800
182,800
50,000
5,500
4,500
51,000
0
2,000
49,000
14,700
2,200
32,100

2018/3E
old
974,000
738,310
235,690
180,190
55,500
4,800
3,800
56,500
0
2,000
56,500
16,950
2,000
37,550

2018/3E
new
966,000
717,300
248,700
193,200
55,500
5,500
4,500
56,500
0
2,000
56,500
16,950
2,000
37,550

2016/3CoE
7/30
850,000

45,000
45,000

29,000

5.3
5.3
3.4

4.9
14.5
4.3
3.7

Source: Company data, J.P. Morgan estimates

JPMorgan Securities Japan Co., Ltd.

Hisashi Moriyama
(81-3) 6736-8601
hisashi.moriyama@jpmorgan.com

Asia Pacific Equity Research

14 August 2015

Investment Thesis, Valuation and Risks

Fuji Electric (6504) (Neutral; Price Target: 570)
Investment Thesis
Our focus is on how the company can cultivate unique growth areas in the
geothermal and thermal power fields and whether it can further develop and cultivate
business in unique product areas as it has done in the food & beverage distribution
segment.
Valuation
Maintain price target of 570. Our price target equates to an FY2015 EV/EBITDA of
7.2x based on our forecasts (P/E of 13.7x). It derives from a sum-of-the-parts
methodology that discounts the average FY2015 EV/EBITDA of 7.4x (previously
8.1x) by 0.2pt (0.9pt) to allow for the risks of slowdowns in orders and the macroeconomy. We also extend the period for our achievement of our price target from
December 2015 through December 2016.
Risks to Rating and Price Target
Upside Scenario to Target Price/Rating
Earnings from inverters and power semiconductors could overshoot thanks to
accelerated capex in Asia and China
Downside Scenario to Target Price/Rating
Earnings from power semiconductors could undershoot owing to increased
competition and inventory adjustments

JPMorgan Securities Japan Co., Ltd.

Hisashi Moriyama
(81-3) 6736-8601
hisashi.moriyama@jpmorgan.com

Asia Pacific Equity Research

14 August 2015

Fuji Electric (6504): Summary of Financials

Income statement in millions
Revenues
Cost of revenue
Operating expenses
EBITDA
Depreciation
Operating profit (EBIT)
Other income
Other expenses
Pretax income
Abnormal items (net)
Income taxes
Minorities
Net income - GAAP
Diluted shares outstanding (mn)
Balance Sheet in millions
Total assets
Cash and cash equivalents
Trade receivable
Other current assets
Net Tangible fixed assets
Net intangible fixed assets
Investments/other assets
Total liabilities
Short term debt
Other short term liabilities
Long term debt
Other long term liabilities
Minority interests
Total Equity

2015/3
810,678
-579,076
-771,361
69,616
-30,300
39,316
5,796
-1,947
45,719
2,580
-14,918
-2,822
27,978
715
2015/3
904,522
31,953
237,631
55,773
174,953
15,295
251,201
555,590
68,095
186,005
89,129
61,713
29,296
348,932

2016/3E 2017/3E 2018/3E Cash Flow statement in millions

850,000 914,000 966,000 Operating CF
-605,000 -651,200 -687,300 D&A
-804,000 -864,000 -910,500 Net change in working capital
75,000
80,000
85,500 Investment CF
-29,000
-30,000
-30,000 Capex
46,000
50,000
55,500 Net change in investments
3,300
3,300
3,300 Free cash flow
-800
-800
1,200 Financing CF
45,000
49,000
56,500 Net debt (cash)
-2,000
-2,000
-2,000 Change in Net debt (cash)
-13,500
-14,700
-16,950
-1,800
-2,200
-2,000
29,700
32,100
37,550
715
715
715
2016/3E 2017/3E 2018/3E Ratio Analysis
896,059 1,123,380 1,077,554 Gross Margin
28,999 201,395 165,634 EBITDA margin
244,799 273,955 274,312 ROCE
50,000
50,000
50,000 Return on equity (ROE)
182,853 182,853 182,853 D/E ratio
7,500
7,500
7,500 Div payout ratio
250,000 250,000 250,000
520,427 718,648 638,272
70,095
72,095
74,095
188,916 277,129 309,794
89,129
89,129
89,129
91,008
91,008
91,008
29,296
29,296
29,296
375,632 404,732 439,282

2015/3
51,459
33,615
-17,808
-22,750
-29,000
-4,020
22,476
-33,828
125,271
-40,208

2016/3E
17,503
29,000
-56,497
-22,400
-36,900
0
-18,328
2,000
130,225
4,954

2017/3E 2018/3E
190,395 -17,762
30,000 30,000
111,395 -104,262
-20,000 -20,000
-30,000 -30,000
0
0
161,463 -46,712
2,000
2,000
-40,171
-2,410
-170,396 37,761

2015/3 2016/3E 2017/3E 2018/3E

24.8% 25.4%
25.5%
25.7%
8.6%
8.8%
8.8%
8.9%
5.7%
6.7%
6.8%
7.0%
10.2%
8.9%
8.9%
9.6%
45.1% 42.4%
39.8%
37.2%
23.0% 24.1%
26.7%
26.6%

Source: Company data and J.P. Morgan estimates

Note: in millions (except per-share data).Fiscal year ends Mar

JPMorgan Securities Japan Co., Ltd.

Hisashi Moriyama
(81-3) 6736-8601
hisashi.moriyama@jpmorgan.com

Asia Pacific Equity Research

14 August 2015

JPM Q-Profile
Fuji Electric Co., Ltd. (JAPAN / Industrials)
As Of: 07-Aug-2015

Quant_Strategy@jpmorgan.com

Local Share Price

Current:

545.00

12 Mth Forward EPS

Current:

43.57

60.00

700.00

50.00

600.00

40.00
500.00

30.00

400.00

20.00

300.00

10.00
0.00

200.00

-10.00

100.00

-20.00

PE (1Yr Forward)

Current:

12.5x

60.0x

P/E Relative to Japan Index

Jul/14

Current:

Mar/15

Nov/13

Jul/12

Mar/13

Nov/11

Jul/10

Mar/11

Nov/09

Jul/08

Mar/09

Nov/07

Jul/06

Mar/07

Nov/05

Jul/04

Mar/05

Nov/03

Jul/02

Mar/03

Nov/01

Jul/00

Mar/01

-30.00

Jul/15

Oct/14

Jan/14

Jul/12

Apr/13

Oct/11

Jan/11

Jul/09

Apr/10

Oct/08

Jan/08

Jul/06

Apr/07

Oct/05

Jan/05

Jul/03

Apr/04

Oct/02

Jan/02

Jul/00

Apr/01

0.00

0.82

3.00

50.0x

2.50

40.0x

2.00

30.0x
1.50
20.0x
1.00

10.0x

0.50

0.0x

20%

12Mth fwd EY

Current:

Japan BY

8%

Dividend Yield (Trailing)

Current:

Mar/15

Jul/14

Nov/13

Mar/13

Jul/12

Nov/11

Mar/11

Jul/10

Mar/09

Nov/09

Jul/08

Nov/07

Jul/06

Mar/07

Nov/05

Jul/04

Mar/05

Nov/03

Jul/02

Mar/03

Nov/01

Jul/00

Mar/15

Jul/14

Nov/13

Mar/13

Jul/12

Nov/11

Jul/10

Mar/11

Nov/09

Mar/09

Jul/08

Nov/07

Mar/07

Jul/06

Mar/05

Nov/05

Jul/04

Mar/03

Nov/03

Jul/02

Nov/01

Jul/00

Mar/01

Earnings Yield (& Local Bond Yield)

Mar/01

0.00

-10.0x

1.75

8.0

Proxy

7.0

15%

6.0

10%

5.0

5%

4.0

0%

3.0

-5%

ROE (Trailing)

Current:

11.91

25.00
15.00

Current:
P/B Trailing

Mar/15

Jul/14

Nov/13

Mar/13

Jul/12

Nov/11

Mar/11

Jul/10

Mar/09

Nov/09

Jul/08

Nov/07

Jul/06

Mar/07

Price/Book (Value)
2.5x

20.00

Nov/05

Jul/04

Mar/05

Nov/03

Jul/02

Mar/03

Nov/01

Jul/00

Mar/15

Jul/14

Nov/13

Mar/13

Jul/12

Nov/11

Jul/10

Mar/11

Mar/09

Nov/09

Jul/08

Nov/07

Mar/07

Jul/06

Mar/05

Nov/05

Jul/04

Mar/03

Nov/03

Jul/02

Nov/01

Jul/00

0.0

Mar/01

1.0

-15%

Mar/01

2.0

-10%

1.4x

P/B Forward

2.0x

10.00
5.00

1.5x

0.00
-5.00

1.0x

-10.00
-15.00

0.5x

Mar/15

Jul/14

Nov/13

Mar/13

Jul/12

Nov/11

Mar/11

Jul/10

Mar/09

Nov/09

Jul/08

Mar/07

Nov/07

Jul/06

Mar/05

Nov/05

Jul/04

Nov/03

Jul/02

Mar/03

Nov/01

0.0x
Jul/00

Mar/15

Jul/14

Nov/13

Mar/13

Jul/12

Nov/11

Jul/10

Mar/11

Nov/09

Mar/09

Jul/08

Nov/07

Mar/07

Jul/06

Nov/05

Mar/05

Jul/04

Nov/03

Mar/03

Jul/02

Nov/01

Jul/00

Mar/01

-25.00

Mar/01

-20.00

Summary
Fuji Electric Co., Ltd.
JAPAN
Industrials
12mth Forward PE
P/BV (Trailing)
Dividend Yield (Trailing)
ROE (Trailing)

3074.97
13.57261 TICKER 6504 JP
Electrical Equipment
Latest
Min
0.00
12.51x
1.38
0.28
1.75x
0.00
11.91
-22.48

Max
50.00
2.09
7.43
20.37

Median
15.90
1.15
1.60
5.00

Average
17.56
1.21
1.71
4.08

Source: Bloomberg, Reuters Global Fundamentals, IBES CONSENSUS, JPMorgan Quantitative & Derivative Strategy

2 S.D.+
36.62
1.91
3.88
21.34

2 S.D. -1.51
0.51
-0.47
-13.17

% to Min
-100%
-79%
-100%
-289%

7-Aug-15
As Of:
Local Price:
545.00
EPS:
43.57
% to Max % to Med % to Avg
300%
27%
40%
52%
-17%
-12%
323%
-9%
-3%
71%
-58%
-66%

JPMorgan Securities Japan Co., Ltd.

Hisashi Moriyama
(81-3) 6736-8601
hisashi.moriyama@jpmorgan.com

Asia Pacific Equity Research

14 August 2015

Analyst Certification: The research analyst(s) denoted by an AC on the cover of this report certifies (or, where multiple research
analysts are primarily responsible for this report, the research analyst denoted by an AC on the cover or within the document
individually certifies, with respect to each security or issuer that the research analyst covers in this research) that: (1) all of the views
expressed in this report accurately reflect his or her personal views about any and all of the subject securities or issuers; and (2) no part of
any of the research analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations or views
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KOFIA requirements, that their analysis was made in good faith and that the views reflect their own opinion, without undue influence or
intervention.

Important Disclosures
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compendium reports and all J.P. Morgancovered companies by visiting https://jpmm.com/research/disclosures, calling 1-800-477-0406,
or e-mailing research.disclosure.inquiries@jpmorgan.com with your request. J.P. Morgans Strategy, Technical, and Quantitative
Research teams may screen companies not covered by J.P. Morgan. For important disclosures for these companies, please call 1-800-4770406 or e-mail research.disclosure.inquiries@jpmorgan.com.
Date

Fuji Electric (6504) (6504.T, 6504 JT) Price Chart

1,122
OW Y720 N Y430
N Y230
935

OW Y770 N Y460
N Y280
N Y155

748
Price(Y)

OW Y700
OW Y580
N Y350
N Y190

OW Y300 OW Y300

N Y190

N Y280
N Y435

N Y210
N Y320
OW Y290 OW Y275
N Y180
N Y300
N Y210

N Y270
N Y410

OW Y245N Y179N Y200

N Y330
N Y450
OW Y570

561

374

187

0
Sep
06

Mar
08

Sep
09

Mar
11

Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.
Initiated coverage May 15, 2007.

Sep
12

Mar
14

Rating Share Price

(Y)

Price Target
(Y)

15-May-07 OW

532

700

08-Jun-07

OW

573

770

03-Aug-07 OW

496

720

07-Feb-08 OW

363

580

03-Apr-08

424

460

12-May-08 N

399

430

31-Jul-08

301

350

30-Sep-08 N

241

280

04-Nov-08 N

142

230

25-Dec-08 N

128

190

14-Feb-09 N

115

155

02-Nov-09 N

166

180

09-Jan-10

167

210

29-Jan-10

OW

180

300

10-May-10 N

267

300

23-Jun-10

276

320

08-Oct-10

210

210

02-Dec-10 OW

226

290

28-Jan-11

OW

251

300

07-Oct-11

OW

200

245

28-Oct-11

OW

237

275

206

190

179

179

01-Feb-13 N

214

200

26-Mar-13 N

286

270

26-Apr-13

332

280

28-Jun-13

329

330

26-Jul-13

372

410

25-Oct-13

412

435

26-Oct-13

420

450

09-Jun-14

OW

472

570

Sep
15 17-Jan-12

10-Jul-12

The chart(s) show J.P. Morgan's continuing coverage of the stocks; the current analysts may or may not have covered it over the entire
period.
J.P. Morgan ratings or designations: OW = Overweight, N= Neutral, UW = Underweight, NR = Not Rated

JPMorgan Securities Japan Co., Ltd.

Hisashi Moriyama
(81-3) 6736-8601
hisashi.moriyama@jpmorgan.com

Asia Pacific Equity Research

14 August 2015

Explanation of Equity Research Ratings, Designations and Analyst(s) Coverage Universe:

J.P. Morgan uses the following rating system: Overweight [Over the next six to twelve months, we expect this stock will outperform the
average total return of the stocks in the analysts (or the analysts teams) coverage universe.] Neutral [Over the next six to twelve
months, we expect this stock will perform in line with the average total return of the stocks in the analysts (or the analysts teams)
coverage universe.] Underweight [Over the next six to twelve months, we expect this stock will underperform the average total return of
the stocks in the analysts (or the analysts teams) coverage universe.] Not Rated (NR): J.P. Morgan has removed the rating and, if
applicable, the price target, for this stock because of either a lack of a sufficient fundamental basis or for legal, regulatory or policy
reasons. The previous rating and, if applicable, the price target, no longer should be relied upon. An NR designation is not a
recommendation or a rating. In our Asia (ex-Australia) and U.K. small- and mid-cap equity research, each stocks expected total return is
compared to the expected total return of a benchmark country market index, not to those analysts coverage universe. If it does not appear
in the Important Disclosures section of this report, the certifying analysts coverage universe can be found on J.P. Morgans research
website, www.jpmorganmarkets.com.
Coverage Universe: Moriyama, Hisashi: Canon (7751) (7751.T), Disco (6146) (6146.T), FUJIFILM Holdings (4901) (4901.T), Fuji
Electric (6504) (6504.T), HOYA (7741) (7741.T), Hitachi (6501) (6501.T), Hitachi High-Technologies (8036) (8036.T), Konica Minolta
(4902) (4902.T), Mitsubishi Electric (6503) (6503.T), Nikon (7731) (7731.T), Ricoh (7752) (7752.T), Seiko Epson (6724) (6724.T),
Tamron (7740) (7740.T), Tokyo Electron (8035) (8035.T), Toshiba (6502) (6502.T)
J.P. Morgan Equity Research Ratings Distribution, as of June 30, 2015

J.P. Morgan Global Equity Research Coverage

IB clients*
JPMS Equity Research Coverage
IB clients*

Overweight
(buy)
44%
51%
45%
71%

Neutral
(hold)
43%
48%
47%
66%

Underweight
(sell)
13%
38%
9%
57%

*Percentage of investment banking clients in each rating category.

For purposes only of FINRA/NYSE ratings distribution rules, our Overweight rating falls into a buy rating category; our Neutral rating falls into a hold
rating category; and our Underweight rating falls into a sell rating category. Please note that stocks with an NR designation are not included in the table
above.

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10

JPMorgan Securities Japan Co., Ltd.

Hisashi Moriyama
(81-3) 6736-8601
hisashi.moriyama@jpmorgan.com

Asia Pacific Equity Research

14 August 2015

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JPMorgan Securities Japan Co., Ltd.

Hisashi Moriyama
(81-3) 6736-8601
hisashi.moriyama@jpmorgan.com

Asia Pacific Equity Research

14 August 2015

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