On December 5, 2025, FUJIKURA COMPOSITES Inc. (“the Company”), one of our key portfolio holdings, held its 2Q earnings briefing (presentation materials available here, Japanese Only), and we would like to highlight the key points. We continue to heavily engage with the management of the company.
There are three key areas we focused on in this quarter’s results.
The first is the improved disclosure regarding the golf shaft business in the Company’s IR materials.
As stated in the proposal letter we sent to the Company’s Board of Directors and President Morita on October 24, we believe IR improvement is a critical element in dispelling market misunderstandings. We greatly appreciate the Company’s swift action in beginning to address this aspect.
The latest earnings presentation slides, for the first time, clearly illustrates the Company’s global dominance in golf shaft business with its market share trends (Figure 1). Domestic custom-shaft market share has grown from 19.7% to 45.3% over the past ten years, and professional tour driver shaft usage share has also risen significantly—from 23.4% to 39.3% on the U.S. men’s tour (16.9% → 43.6% in Japan men’s, 29.0% → 41.6% in Japan women’s). These steady and substantial gains show how the Company’s brand has expanded over many years, and we view this as a major improvement in IR transparency.
In addition, the materials provide trends and future outlook for the overall golf market, confirming that steady growth is expected over the next five years. The Company also explained its initiatives in under-penetrated markets in detail during the Q&A session, which we see as a significant enhancement compared with past IR efforts.
Figure 1: Disclosures related to the golf shaft business in the earnings materials（Japanese Only）
(Source: Company earnings materials)
The second point is the steady growth of the Sports Equipment business and its solid progress against plan.
Figure 2 demonstrates that segment profit for Sports reached JPY 2.79 bn in the first half, exceeding last year’s JPY 2.75 bn (Reference Japanese Only) and significantly outperforming the initial forecast of JPY 2.33 bn. As a result, 2Q segment profit in total came in at JPY3.08 bn against the Company’s forecast of JPY 2.54 bn—an upside of JPY 0.5 bn, or 21%.
Figure 2: Forecast and progress by major segment（Japanese Only）
(Source: Company earnings materials)
The third point is that the Company’s initiatives to improve performance in the Industrial Materials and Coated Fabrics segments are beginning to deliver results.Both segments posted 2Q results above last year’s level and above initial forecasts, but most notably, as shown in Figure 3, price pass-through initiatives are beginning to generate meaningful results. Industrial Materials recorded JPY 180 mn in improvement, and Coated Fabrics JPY 20 mn. Without these efforts, it is clear the Company would not have met its initial segment forecasts. Director Watanabe also spoke about future investments in automation, optimization of production sites, and consolidation of processes. We expect further progress in these deeper structural reforms.
Figure 3: Breakdown of operating profit drivers by major segment（Japanese Only）
(Source: Company earnings materials)
One area of disappointment in the 2Q disclosure is the lack of progress on capital policy.
The Company has set a target equity ratio of 60%, yet ended FY3/25 at approximately 72%, well above the target. Following the 2Q results, the ratio has further increased to 76%. As stated in our earlier proposal letter, we believe the Company has ample potential to raise ROE from 11.3% in FY3/25 to 17.0% through a combination of business growth and a revised capital policy. From this perspective, we hope to see further efforts toward optimizing the Company’s equity ratio.
That said, we appreciate the Company’s prompt and constructive response to the proposal letter we sent on October 24. We feel a strong sense of commitment toward enhancing corporate value, and we are grateful for the speed with which management has taken action.
We look forward to sharing the results of the Company’s corporate value enhancement with everyone involved—management leading structural reforms in Industrial Materials and Coated Fabrics and capturing growth opportunities in Sports Equipment, employees executing these initiatives, and shareholders supporting the Company behind the scenes. We will continue our warm encouragement-type engagement going forward.
(Our previous posts)
14/Nov/2025 – Submission of Our Proposal for Fujikura Composites
This post does not solicit applications for or recommend the sale of certain securities, or provide advice on investment, legal, tax, accounting, etc. In respect of information that has been prepared by Hibiki Path Advisors (and not otherwise attributed to any other party) and which appear in the English language version of this post, in the event of any inconsistency between the English language version and the Japanese language version of this post, the meaning of the Japanese language version shall prevail unless otherwise expressly indicated engagement amongst all shareholders.