Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>Tech laggards bought in the US showing many in the market scrambling to catch the upside after the rapid snapback from last weeks drop.</li>
<li>Server related strength after Cisco numbers may see sentiment for Nidec finally improving with its cooling modules business emerging as an earnings driver.</li>
<li>Strong numbers for Coherent confirm the positive trends for its optical transceiver business which points to continued upside for AI data center plays</li>
</ul>


Tech laggards bought in the US showing many in the market scrambling to catch the upside after the rapid snapback from last weeks drop.
Server related strength after Cisco numbers may see sentiment for Nidec finally improving with its cooling modules business emerging as an earnings driver.
Strong numbers for Coherent confirm the positive trends for its optical transceiver business which points to continued upside for AI data center plays


Japan Morning Connection: Sanken Electric, Nidec, Asahi Intecc

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>After the close today, the Nikkei reported (<a href="https://www.nikkei.com/article/DGXZQOUC088IW0Y6A400C2000000/" target="_blank" rel="noopener">Japanese</a>, <a href="https://asia.nikkei.com/business/business-deals/japan-s-dentsu-to-take-subsidiary-private" target="_blank" rel="noopener">English</a>) that <a href="https://www.smartkarma.com/entities/dentsu-inc" target="_blank" data-smartkarma-citation="entities:12434:1" rel="noopener">Dentsu Inc (4324 JP)</a> had finalised plans to take its system integrator subsidiary <a href="https://www.smartkarma.com/entities/info-services-intl-dentsu" target="_blank" data-smartkarma-citation="entities:20535:1" rel="noopener">Info Services Intl Dentsu (4812 JP)</a>.</li>
<li>Articles are still updating but the idea is Dentsu will keep its 61.8% stake. Fujitsu and Unnamed Trading Houses will buy the rest for "around ¥200bn" implying +13.1% to ¥2,675/share.</li>
<li>Dentsu responded with a TDNet filing. It's less smokey than many other releases are. BUT... we take a look anyway at the parameters.</li>
</ul>


After the close today, the Nikkei reported (Japanese, English) that Dentsu Inc (4324 JP) had finalised plans to take its system integrator subsidiary Info Services Intl Dentsu (4812 JP).
Articles are still updating but the idea is Dentsu will keep its 61.8% stake. Fujitsu and Unnamed Trading Houses will buy the rest for "around ¥200bn" implying +13.1% to ¥2,675/share.
Dentsu responded with a TDNet filing. It's less smokey than many other releases are. BUT... we take a look anyway at the parameters.


[Japan M&A] Nikkei Reports Dentsu To Lead Buyout of System Integrator Sub Dentsu Soken (4812)

<ul>
<li>
<strong>Fujitsu <a href="https://pr.fujitsu.com/jp/ir/finance/2024/pdf/en/01.pdf" target="_blank" rel="noopener">Earnings</a></strong>. Revenues +2.1%, OP +77.5%, Pretax +65.1%, Net -13.0% (basis effect from FY23 one-offs). Forecast? Revs -2.8%, OP/adj +35.8%/+17.2%, Net/adj +77.4%/+3.7%. All guided measures shy vs the Street consensus.</li>
<li>The company presented a progress update on its <a href="https://pr.fujitsu.com/jp/ir/finance/2024/pdf/en/md.pdf" target="_blank" rel="noopener">Medium-Term Management Plan</a>. Core profits are better. Things are improving. </li>
<li>The company also <a href="https://pr.fujitsu.com/jp/news/2025/04/en/24-2.pdf" target="_blank" rel="noopener">announced</a> a big 11-month ¥170bn buyback. Last year's was ¥180bn (completed 24 March). Worth checking out the details (and our brand-new buyback tool)</li>
</ul>



Fujitsu Earnings. Revenues +2.1%, OP +77.5%, Pretax +65.1%, Net -13.0% (basis effect from FY23 one-offs). Forecast? Revs -2.8%, OP/adj +35.8%/+17.2%, Net/adj +77.4%/+3.7%. All guided measures shy vs the Street consensus.
The company presented a progress update on its Medium-Term Management Plan. Core profits are better. Things are improving. 
The company also announced a big 11-month ¥170bn buyback. Last year's was ¥180bn (completed 24 March). Worth checking out the details (and our brand-new buyback tool)


Fujitsu (6702) - Earnings/Guidance OK, Margins Better, But New Quiddity Buyback Data Tool 🥳

Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Fujitsu is transitioning from traditional IT services toward high-margin, AI-driven solutions, with Fujitsu Uvance becoming the dominant revenue driver through a new value-based business model.</li>
<li>Aggressive margin expansion targets of 25-30% rely on AI-driven productivity gains and recycling record cash flow into a ¥3 trillion technology-powered new growth business domain.</li>
<li>Proprietary foundations like MONAKA CPUs and quantum computers secure technological sovereignty, creating a unique competitive moat within high-growth, mission-critical sovereign global digital and physical market.</li>
</ul>


Fujitsu is transitioning from traditional IT services toward high-margin, AI-driven solutions, with Fujitsu Uvance becoming the dominant revenue driver through a new value-based business model.
Aggressive margin expansion targets of 25-30% rely on AI-driven productivity gains and recycling record cash flow into a ¥3 trillion technology-powered new growth business domain.
Proprietary foundations like MONAKA CPUs and quantum computers secure technological sovereignty, creating a unique competitive moat within high-growth, mission-critical sovereign global digital and physical market.


<ul>
<li>Fujitsu is transitioning from low-value IT services toward higher-margin AI, modernization, and sovereign infrastructure businesses, driving structural margin expansion and improving earnings quality.</li>
<li>Market focuses on consulting disruption risk, but underestimates Fujitsu’s differentiated positioning in domestic supercomputing, quantum computing, cybersecurity, and national infrastructure platforms.</li>
<li>Strong free cash flow growth, disciplined restructuring, and shareholder returns support downside protection, while Vision 2035 and sovereign AI demand create re-rating potential.</li>
</ul>


Fujitsu is transitioning from low-value IT services toward higher-margin AI, modernization, and sovereign infrastructure businesses, driving structural margin expansion and improving earnings quality.
Market focuses on consulting disruption risk, but underestimates Fujitsu’s differentiated positioning in domestic supercomputing, quantum computing, cybersecurity, and national infrastructure platforms.
Strong free cash flow growth, disciplined restructuring, and shareholder returns support downside protection, while Vision 2035 and sovereign AI demand create re-rating potential.


Fujitsu (6702): AI Infrastructure Transition; MTP Catalyst

Japan

Fujitsu Ltd manufactures semiconductor, computer, and communication equipment. The Company provides comprehensive information technology, network and telecommunication solutions, and Internet services.

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Fujitsu Ltd (6702 JP)

Japan Morning Connection: Sanken Electric, Nidec, Asahi Intecc

US tech laggards are now catching up after a rapid rebound, server-related strength boosts Nidec's sentiment, and Coherent's strong numbers...

Andrew Jackson

[Japan M&A] Nikkei Reports Dentsu To Lead Buyout of System Integrator Sub Dentsu Soken (4812)

Dentsu Soken has flatlined since popping on the Nikkei article. Q2 earnings were salutary. The question for a partner is valuation. It's not cheap....

Travis Lundy

Fujitsu (6702) - Earnings/Guidance OK, Margins Better, But New Quiddity Buyback Data Tool 🥳

Fujitsu earnings came out. A little light on both results and guidance (waves hand at world). We also got a buyback. Supply/demand dynamics are not...

Travis Lundy

Fujitsu Vision 2035: 5 Critical Charts

Fujitsu released a 50-page presentation announcing its Vision over the next 10 years. We highlight 5 key charts from the deck that underpin its...

Mark Chadwick

Fujitsu (6702): AI Infrastructure Transition; MTP Catalyst

Fujitsu is shifting focus to higher-margin AI and modernization services, with strong potential in domestic supercomputing and cybersecurity,...

Mark Chadwick

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52-week Range

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Japan Morning Connection: Sanken Electric, Nidec, Asahi Intecc

​US tech laggards are now catching up after a rapid rebound, server-related strength boosts Nidec's sentiment, and Coherent's strong numbers...

Andrew Jackson

[Japan M&A] Nikkei Reports Dentsu To Lead Buyout of System Integrator Sub Dentsu Soken (4812)

Dentsu Soken has flatlined since popping on the Nikkei article. Q2 earnings were salutary. The question for a partner is valuation. It's not cheap....

Travis Lundy

Fujitsu (6702) - Earnings/Guidance OK, Margins Better, But New Quiddity Buyback Data Tool 🥳

Fujitsu earnings came out. A little light on both results and guidance (waves hand at world). We also got a buyback. Supply/demand dynamics are not...

Travis Lundy

Fujitsu Vision 2035: 5 Critical Charts

Fujitsu released a 50-page presentation announcing its Vision over the next 10 years. We highlight 5 key charts from the deck that underpin its...

Mark Chadwick

Fujitsu (6702): AI Infrastructure Transition; MTP Catalyst

​Fujitsu is shifting focus to higher-margin AI and modernization services, with strong potential in domestic supercomputing and cybersecurity,...

Mark Chadwick

US tech laggards are now catching up after a rapid rebound, server-related strength boosts Nidec's sentiment, and Coherent's strong numbers...

Fujitsu is shifting focus to higher-margin AI and modernization services, with strong potential in domestic supercomputing and cybersecurity,...