Fujikura's Two-Pronged Pivot: Cashing Out of China While Riding the AI Infrastructure Wave
Published on 08/14/2026 at 15:23 | Redaktion boerse-global.de
The Japanese cable and optical components maker Fujikura finds itself at an unusual crossroads. Even as it unwinds its manufacturing presence in China, the company is doubling down on the very product line that has sent its shares on a blistering run — optical components for AI data centers.
The strategic repositioning came into sharp focus on August 7, when Fujikura announced it would transfer its entire 60% stake in the joint venture Fujikura Fiber Optics (China) to its partner, Yangtze Optical Fibre and Cable (YOFC). The price tag: 500.24 million renminbi, with completion slated for the end of September. The divestment dovetails with a sharply upgraded earnings outlook, underscoring a portfolio shift toward the most profitable growth segments rather than maintaining a broad footprint in China.
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That growth engine is firing on all cylinders. In the same August 7 announcement, Fujikura raised its operating profit forecast for the fiscal year ending March 2027 for the second time this year — by 39% to 432.0 billion yen, up from a previously projected 310.0 billion yen. Net profit is now expected to reach 326.0 billion yen, versus an earlier estimate of 229.0 billion yen. Reuters attributed the upgrade to surging demand tied to the buildout of AI data centers.
The revised guidance isn't built on hope alone. First-quarter results through June show net sales of 402.01 billion yen, up 50.1% year on year. Operating profit more than doubled, jumping 155.1% to 104.83 billion yen, while net profit climbed 156.8% to 80.43 billion yen. The secondary source puts the prior-year operating figure at 41.09 billion yen, confirming the scale of the leap.
The market's response was immediate. On August 10, the stock surged 7.62% in a single session — a move Daiwa Securities strategist Daisuke Hashizume attributed to the company's strong positioning within the AI supply chain. The consensus 12-month price target among analysts was subsequently lifted by 8.2% to 5,188 yen.
Yet not everyone is drinking the Kool-Aid. Analyst Michael Allen published a critical note on Smartkarma on August 7 titled "Elephants Can't Fly," flagging valuation concerns despite the raised guidance. He points to an EV/EBITDA multiple of 30 as stretched and cites potential supply chain risks from geopolitical tensions in the Strait of Hormuz. The report predates the latest rally and shouldn't be mistaken for current market sentiment, but it underscores that the stock's valuation is hardly uncontested. Automated valuation models have also produced divergent fair-value estimates, adding to the uncertainty about where the shares should trade.
The stock's recent behavior reflects that tension. On Thursday, Fujikura closed at 31.87 euros, down 1.6%, acting as a counterweight to a semiconductor-led advance in Tokyo. Over seven days, however, the shares are still up 14%, and the 30-day gain stands at 20% — evidence that the consolidation has done little to dent the underlying uptrend. A relative strength index of 63.5 suggests the stock isn't overbought despite the pullback, though an annualized volatility of 84% speaks to the wild swings of recent weeks.
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For income-oriented investors, Fujikura is holding the line on dividends: 38.00 yen per share for the current fiscal year, split evenly between 19 yen interim and 19 yen year-end payouts. The board has also authorized issuing up to 150,000 treasury shares as employee stock at an issue price of 4,596 yen.
The subsidiary Fujikura Composites added its own positive note. First-quarter revenue came in at 10,687 million yen, up 3.1% year on year, with operating profit of 1,700 million yen, a 12.8% increase. The unit also raised its planned annual dividend from 76 to 86 yen per share. In July, it repurchased 118,500 of its own shares for roughly 299 million yen, bringing cumulative buybacks under a program launched in December 2025 to 813,200 shares for 2.0 billion yen.
Governance matters are also on the agenda. The board is proposing the reappointment of President and CEO Naoki Okada, while a director and senior executive officer is departing. Shareholders will vote on these matters, along with initiatives tied to the medium-term plan 2028, at the 64th ordinary general meeting scheduled for September 25.
On the sustainability front, FTSE Russell has again recognized the company: Fujikura remains a constituent of the FTSE4Good Index for the fourth consecutive year and the FTSE JPX Blossom Japan Index for the tenth time.
For investors, the central narrative remains the interplay between explosive AI-driven growth and a deliberate pruning of the China portfolio. The question is whether the earnings momentum can outrun the valuation debate — a contest that is far from settled.
