Ferrotec Holdings (TSE:6890) - Share price, News & Analysis

6890 fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	1/6
Past Performance	4/6
Financial Health	6/6
Dividends	2/6

6890 Stock Overview

Ferrotec Holdings Corporation engages in semiconductor equipment-related, electronic device, and other businesses in Japan and internationally.

Rewards

Trading at 46.7% below our estimate of its fair value

Revenue is forecast to grow 6.44% per year

Earnings grew by 222% over the past year

Risk Analysis

Earnings are forecast to decline by an average of 18.9% per year for the next 3 years

Highly volatile share price over the past 3 months

Large one-off items impacting financial results

Shareholders have been diluted in the past year

Ferrotec Holdings Competitors

Komatsu

TSE:6301

JP¥3.0t

II-VI

NasdaqGS:IIVI

US$6.3b

Price History & Performance

Summary of all time highs, changes and price drops for Ferrotec Holdings
Historical stock prices
Current Share Price	JP¥2,846.00
52 Week High	JP¥4,695.00
52 Week Low	JP¥1,970.00
Beta	2.23
1 Month Change	15.55%
3 Month Change	17.99%
1 Year Change	27.80%
3 Year Change	236.41%
5 Year Change	76.22%
Change since IPO	20.59%

Shareholder Returns

	6890	JP Semiconductor	JP Market
7D	19.1%	3.3%	0.7%
1Y	27.8%	15.2%	-2.9%

Return vs Industry: 6890 exceeded the JP Semiconductor industry which returned 15.2% over the past year.

Return vs Market: 6890 exceeded the JP Market which returned -2.9% over the past year.

Price Volatility

Is 6890's price volatile compared to industry and market?
6890 volatility
6890 Average Weekly Movement	9.7%
Semiconductor Industry Average Movement	6.5%
Market Average Movement	4.6%
10% most volatile stocks in JP Market	9.1%
10% least volatile stocks in JP Market	2.5%

Stable Share Price: 6890 is more volatile than 90% of JP stocks over the past 3 months, typically moving +/- 10% a week.

Volatility Over Time: 6890's weekly volatility (10%) has been stable over the past year, but is still higher than 75% of JP stocks.

About the Company

Founded	Employees	CEO	Website
1980	7,380	Xian Han He	https://www.ferrotec.co.jp

Ferrotec Holdings Corporation engages in semiconductor equipment-related, electronic device, and other businesses in Japan and internationally. The company offers vacuum seals, silicon wafers, vacuum coating systems, quartz products, ceramics products, CVD-SiC parts, silicon parts, and quartz crucibles, as well as parts cleaning services for semiconductor and FPD manufacturing equipment. It also provides ferrofluids; thermo-electric modules; power semiconductor DCB and AMB substrates; ingots, wafers, and cells for solar modules; industrial cleaning equipment; and machine blades.

Ferrotec Holdings Fundamentals Summary

How do Ferrotec Holdings's earnings and revenue compare to its market cap?
6890 fundamental statistics
Market Cap	JP¥126.79b
Earnings (TTM)	JP¥26.66b
Revenue (TTM)	JP¥133.82b

4.8x

P/E Ratio

0.9x

P/S Ratio

Is 6890 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
6890 income statement (TTM)
Revenue	JP¥133.82b
Cost of Revenue	JP¥85.14b
Gross Profit	JP¥48.68b
Other Expenses	JP¥22.02b
Earnings	JP¥26.66b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

May 30, 2022

Earnings per share (EPS)	598.39
Gross Margin	36.38%
Net Profit Margin	19.92%
Debt/Equity Ratio	23.3%

How did 6890 perform over the long term?

See historical performance and comparison

Dividends

1.3%

Current Dividend Yield

4%

Payout Ratio

Valuation

Is Ferrotec Holdings undervalued compared to its fair value and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

46.7%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: 6890 (¥2846) is trading below our estimate of fair value (¥5342)

Significantly Below Fair Value: 6890 is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: 6890 is good value based on its PE Ratio (4.8x) compared to the JP Semiconductor industry average (11.6x).

PE vs Market: 6890 is good value based on its PE Ratio (4.8x) compared to the JP market (12.2x).

Price to Earnings Growth Ratio

PEG Ratio: 6890's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

Price to Book Ratio

PB vs Industry: 6890 is good value based on its PB Ratio (1x) compared to the JP Semiconductor industry average (1.5x).

Future Growth

How is Ferrotec Holdings forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-18.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 6890's earnings are forecast to decline over the next 3 years (-18.9% per year).

Earnings vs Market: 6890's earnings are forecast to decline over the next 3 years (-18.9% per year).

High Growth Earnings: 6890's earnings are forecast to decline over the next 3 years.

Revenue vs Market: 6890's revenue (6.4% per year) is forecast to grow faster than the JP market (4% per year).

High Growth Revenue: 6890's revenue (6.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 6890's Return on Equity is forecast to be low in 3 years time (12.5%).

Past Performance

How has Ferrotec Holdings performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

51.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 6890 has a large one-off gain of ¥7.7B impacting its March 31 2022 financial results.

Growing Profit Margin: 6890's current net profit margins (19.9%) are higher than last year (9.1%).

Past Earnings Growth Analysis

Earnings Trend: 6890's earnings have grown significantly by 51.7% per year over the past 5 years.

Accelerating Growth: 6890's earnings growth over the past year (222%) exceeds its 5-year average (51.7% per year).

Earnings vs Industry: 6890 earnings growth over the past year (222%) exceeded the Semiconductor industry 100.7%.

Return on Equity

High ROE: 6890's Return on Equity (17.3%) is considered low.

Financial Health

How is Ferrotec Holdings's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 6890's short term assets (¥133.4B) exceed its short term liabilities (¥68.8B).

Long Term Liabilities: 6890's short term assets (¥133.4B) exceed its long term liabilities (¥35.0B).

Debt to Equity History and Analysis

Debt Level: 6890 has more cash than its total debt.

Reducing Debt: 6890's debt to equity ratio has reduced from 55.8% to 23.3% over the past 5 years.

Debt Coverage: 6890's debt is well covered by operating cash flow (37.4%).

Interest Coverage: 6890's interest payments on its debt are well covered by EBIT (40.6x coverage).

Balance Sheet

Dividend

What is Ferrotec Holdings's current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.30%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 6890's dividend (1.3%) isn’t notable compared to the bottom 25% of dividend payers in the JP market (1.64%).

High Dividend: 6890's dividend (1.3%) is low compared to the top 25% of dividend payers in the JP market (3.7%).

Stability and Growth of Payments

Stable Dividend: 6890's dividend payments have been volatile in the past 10 years.

Growing Dividend: 6890's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (4.2%), 6890's dividend payments are thoroughly covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: 6890 is paying a dividend but the company has no free cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure

CEO

Xian Han He (64 yo)

1.83yrs

Tenure

JP¥497,092,000

Compensation

Mr. Xian Han He has been President of Shanghai Hanhong International Trading Co., Ltd. since February 2003. Mr. He has been President of Advanced Quartz Material (Hangzhou) Co., Ltd.since October 2006. He...

CEO Compensation Analysis

Compensation vs Market: Xian Han's total compensation ($USD3.89M) is above average for companies of similar size in the JP market ($USD1.40M).

Compensation vs Earnings: Xian Han's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: 6890's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.

Board Members

Experienced Board: 6890's board of directors are considered experienced (6.9 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 19.7%.

Data	Last Updated (UTC time)
Company Analysis	2022/05/22 00:00
End of Day Share Price	2022/05/21 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31