FUJI ELECTRIC INDUSTRY CO. , LTD.

Business Details

Founded in 1953, the company is a specialized manufacturer of electrical control equipment. Manufacturing, processing, and sales of Control Switches (cam switches, etc.), Connection Devices (terminal blocks, etc.), Indicator Lights & Displays (LED indicator lights, etc.), and Electronic Application Equipment (I/O terminals, etc.) account for over 90% of net sales. Major customers include the heavy electrical equipment, general industrial, and railway vehicle industries (domestic) and various countries in Asia and the Middle East (overseas). The overseas sales ratio is 10.4% of total sales results.

Recent Overview

Sales edged up slightly, but operating profit fell sharply by 60.3% year on year due to soaring material costs

In the first quarter of FY2027 (ending January 2027) (February to April 2026), net sales were ¥916 million (up 2.0% year on year), securing a slight increase. Connection Devices (up 4.9% year on year) and Electronic Application Equipment (up 13.3% year on year) drove sales, while Control Switches (down 5.4% year on year) declined. On the profit side, manufacturing costs increased due to soaring material costs, and operating profit deteriorated significantly to ¥21 million (down 60.3% year on year), with quarterly net profit at ¥22 million (down 45.7% year on year). Total order intake was up 114.1% year on year, and order backlog was also up 113.3% year on year, showing improvement in these leading indicators. The full-year earnings forecast remains unchanged (net sales of ¥4,250 million, operating profit of ¥276 million). The annual dividend forecast is maintained at ¥32 (unchanged from the previous fiscal year).

Key Products

Growth Drivers

• Expanding demand accompanying the modernization of power networks and the development of wide-area interconnected grid systems in the heavy electrical equipment market
• Sales contribution from increases in Connection Devices (surge absorber terminal blocks, etc.)
• Significant improvement in leading indicators, with order intake up 114.1% year on year and order backlog up 113.3% year on year
• Promotion of development in the railway vehicle market (railway vehicle switches within Control Switches, etc.)
• Development of overseas markets centered on Asia and the Middle East (overseas sales ratio of 10.4%)
• Expectations for full-year sales recovery driven by product price revisions and rising electricity demand (full-year forecast of ¥4,250 million, up 12.5% year on year)

Risks

• High dependence on sales to the heavy electrical equipment market (for electric power companies), creating a risk that capital investment trends among electric power companies directly affect performance
• Risk of increased manufacturing costs due to soaring material costs (molding materials, metals), which pressured operating profit down 60.3% year on year in the first quarter
• Risk of a change in sales structure due to declining demand, as order intake for Electronic Application Equipment (I/O terminals, etc.) was the only category to fall below the prior-year level, at 90.2% year on year
• Risk of economic downside from heightened geopolitical risk in the Middle East region and U.S. trade policy
• Low profitability, with ROE and EPS falling significantly short of management targets (ROE of 5.0% or higher, EPS of ¥80 or higher)
• Business continuity risk in the event of natural disasters or infectious disease outbreaks, as all production sites are concentrated within Shiga Prefecture