On October 24, Hibiki Path Advisors (“we”) submitted a proposal entitled “Recommendations for Enhancing Corporate Value” to President Morita and the Board of Directors of Fujikura Composites Inc. (“the company”).
The company, founded in 1901 by Mr. Tomekichi Matsumoto—the younger brother of Mr. Zenpachi Fujikura—has a proud history of more than 120 years. Originating from the rubber-coated fabric business, the company began manufacturing synthetic rubber products in 1941 and entered the golf shaft business in 1974, steadily diversifying around its core rubber composite technology.
Today, the sporting goods segment, the newest among the company’s businesses, has grown to account for nearly all of the company’s profits (approximately 98% of total segment profit for FY3/25). In the core golf shaft business, the company now enjoys an overwhelming global competitive advantage. In 2025, seven of the top ten players, starting with World No.1 S. Scheffler and No. 2 R. McIlroy¹—including all the winners of the 2025 major championships²—use the company’s products, demonstrating that the company already has a dominant presence and a proven track record among the world’s top players. Among Japanese female professionals, Hinako Shibuno also uses its products³, and a review of the company’s Facebook account suggests that usage rates on domestic tours have consistently been above 40%⁴.
Supported by a brand strength unparalleled anywhere in the world and the steady global expansion of the golf market, we believe the company is well-positioned for continued stable growth in the years ahead.
Figure 1: Usage rate of the company’s shafts in the 2025 tour
（Source:fujikuragolf）
However, despite the company’s solid fundamentals and strong global brand, its market valuation continues to trade at a deep discount to intrinsic value. We believe this gap is mainly driven by two underlying factors:
① Market Misunderstandings: insufficient recognition as a sporting goods manufacturer and perceived uncertainties on maintaining the growth and profitability of the sporting goods segment
② Lack of market confidence in management: skepticism toward maintaining an inefficient business portfolio and the absence of a rational capital policy
By resolving these issues one by one, the company can achieve meaningful improvement in corporate value and, ultimately, sustainable long-term growth.
To this end, we have presented the following four key recommendations:
(1) Substantial enhancement of IR activities — including more detailed disclosure of the sporting goods business’ growth strategy and the regular hosting of sporting goods business investor briefings to improve market understanding.
(2) Strengthening of shareholder returns — with the goal of achieving ROE of 17% and an equity ratio of 60% by FY3/28, through a combination of a DOE of 12% and share buybacks totaling approximately JPY 10 bn over three years.
(3) Expansion of stock-based compensation for internal directors and employees
(4) Rigorous implementation of business portfolio management
In conjunction with the announcement of its second-quarter results on November 10, the company disclosed the cancellation of treasury shares equivalent to 14.38% of its total shares outstanding (Disclosed only in Japanese). We view this as an important first step toward rebuilding investor confidence and look forward to seeing continued proactive initiatives aimed at enhancing corporate value.
We sincerely hope that our recommendations will serve as constructive input not only for the company’s management team but also for all shareholders, contributing to a healthy and forward-looking engagement between the company and its investors.
Proposal to Enhance Fujikura Composite_Corporate Value
¹ Men’s World Golf Rankings 2025 | Official World Golf Ranking
² Fujikura Driver Shafts Dominate All Four Majors in Historic 2025 Sweep – National Club Golfer | National Club Golfer
³ “The identity of the iron shafts used by Hinako Shibuno｜Fujikura ‘TRAVIL’ (Part 1)” (Japanese Only) | Buzz Golf
⁴ Fujikura/フジクラ/藤倉コンポジット株式会社 | Koto-ku Tokyo | Facebook
This proposal letter does not constitute an offer, recommendation, or solicitation to buy or sell any security or enter into any other transaction. Hibiki does not purport to provide any investment, financial, legal, or other expert advice or recommendation in this document