美国及香港投资者走访反馈

Wire & Cable/Steel/Nonferrous Metals/TradingCompanies| Japan Feedback From Our Visits WithUS & Hong Kong Investors Wire & Cable JapanIndustry View Attractive Interest in AI data center related names remained strong.Interest in the steel industry was low, and we sensed thatNippon Steel is being overlooked even relative to US steelnames. Investor views on the trading companies were a mix ofbulls and bears. Key Takeaways We visited investors in the US on Apr 13-16 and in Hong Kong on Apr 20-22.US investors were deeply focused on Wire & Cable names, Mitsui Kinzoku and JX.Many seemed bullish on fundamentals instead of worried by high valuations.Interest in the steel industry was low.Views on the trading companies were mixed bullish and bearish. Overall impression:Questions and discussions were heavily concentrated on thethree Wire & Cable names tied to AI data centers, as well as Mitsui Kinzoku and JXAdvanced Metals. Investors had some interest in Trading Companies, but less so inSteel and Nonferrous (resource-related) names. Regarding the Middle East conflict,the majority of investors were broadly optimistic in terms of the potential impact.On stock selection once conditions normalize, we sensed bullishness in Wire &Cable toward Sumitomo Electric, while somewhat more caution on TradingCompanies, where share price performance has been strong of late. Interest in Steelremained low. While US steel stocks have risen by more than 20% over the pastmonth, Nippon Steel (which has higher US exposure) has remained broadly flat,which increasingly suggests the stock is a laggard. US investors also asked manyquestions focused on optical-related fundamentals, whereas Hong Kong investorsinquired more about earnings. In the next section, we detail discussions by industry. Morgan Stanley does and seeks to do business withcompanies covered in Morgan Stanley Research. As a result,investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of Morgan StanleyResearch. Investors should consider Morgan StanleyResearch as only a single factor in making their investmentdecision. For analyst certification and other important disclosures,refer to the Disclosure Section, located at the end of thisreport. += Analysts employed by non-U.S. affiliates are not registeredwith FINRA, may not be associated persons of the memberand may not be subject to FINRA restrictions oncommunications with a subject company, public appearancesand trading securities held by a research analyst account. Discussion points by industry Furukawa Electric:Many investors were aware that we recently upgraded our rating fromEqual-weight to Overweight, and we received numerous questions about why. Weexplained that our OW rating is based on three factors: (1) Furukawa having the highestprojected profit growth among the Wire & Cable trio; (2) sufficient production capacity tosupport growth; and (3) upside potential versus consensus estimates. Investors overallseemed to accept our reasoning. The pushback we did hear cited (a) limited confidencedue to Furukawa’s weak track record on the operational side, and (b) difficulty enteringthe stock at current levels given the stock's surge. Regarding (a), we acknowledged thatthe company’s track record outside Japan has been weak, but explained that capacityexpansion for multi‑core optical cables is being carried out in Japan and that its trackrecord in the thermal business is not poor. We felt that the pushback on (b) wasreasonable, given that the stock price had reached our price target. We also pointed outthe improving earnings outlook ahead, as well as our bull case implied P/E of 36.5x(assuming earnings upside of 20% versus the base case). Sumitomo Electric:SEI's share price in March underperformed the other two Wire Cablenames, given the Middle East conflict fueling concerns over declining auto productionvolumes, as well as SEI’s high profit exposure to the wire harness business. More recently,however, we sensed growing investor preference for the stock in the short term amidexpectations of normalization in the Middle East. Compared with Furukawa Electric andFujikura, valuations do not appear overheated (P/E in the low‑20x range on F3/27consensus estimates), and as the leading beneficiary of CPO (Co‑Packaged Optics), manyinvestors felt the stock remained attractive even entering in at current levels. Fujikura:While tight optical fiber procurement remains a concern, investor expectationsfor optical cable price hikes are high, which has solidified the share price. Some investorsseemed to be looking for F3/27 guidance that reflects upside from optical cable pricehikes. However, many investors remain cautious about guidance risk, given Fujikura’stendency to issue very conservative guidance (initial F3/26 guidance called for YoYearnings decline). Our view is that optical fiber will remain a bottleneck and that over a3‑year horizon (through F3/29), Fujikura’s growth potential