金属解决方案、汽车系统及光学解决方案业务简报

Business Briefing on MetalSolutions, Automotive Systemsand Optical Solutions +81 3 6836-5432 Furukawa Electric (5801.T, 5801 JT) Wire & Cable|Japan On Jun 5, Furukawa Electric held a business briefing on the Metal Solutions,Automotive Systems and Optical Solutions segments. The key takeaways were asfollows. Stock RatingOverweightIndustry ViewAttractivePrice target¥66,000Shr price, close (Jun 5, 2026)¥49,050Mkt cap, curr, basic (bn)¥3,450.7Avg daily trading value (bn)¥120.2 Metal Solutions:The firm wants to increase the ratio of high added-value products,but says maintaining existing product volumes is also important given the nature ofthe large-scale equipment business. Automotive Systems:The firm aims to improve profit margins through salesexpansion of new products, including high-durability aluminum wire and AlphaTerminal. Optical Solutions:The firm plans to maximize utilization of existing capacitythrough F3/29. It is looking to reduce external sales of optical fiber and shift tocables, while also increasing the sales mix of pre-connectorized cables. However,fiber production is already at full capacity, so we expect an announcement in thenear-term of plans to increase capacity 2-3x versus currently for both optical fiberand optical cable. For pre-connectorized cables, certification procedures for ultra-high fiber count products are ongoing, but the firm commented that shipments havecommenced of some products in North and South America, which is newinformation. 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. Valuation Methodology and Risks Furukawa Electric (5801.T) We use a residual income model, with assumptions of 9.3% for capital cost (2.0% risk-free rate,6.2% equity risk premium, 1.18 beta), 45% payout ratio, mid-term growth rate of ~17%, andterminal growth rate of 3.5%. Our PT equates to P/E of 34.6x on our F3/28e EPS of ¥1,909. Risks to Upside nHigher sales volumes on healthier business sentiment than expectednFaster improvement in product mix for communications solutions than expected Risks to Downside nDecline in sales volume on weaker business sentiment than expectednDelayed price pass-through due to sharp rises in raw material costs and other materialcostsnSharper yen appreciation than anticipated Disclosure Section The information and opinions in Morgan Stanley Research were prepared by Morgan Stanley MUFG Securities Co., Ltd. and its affiliates (collectively, "Morgan Stanley").For important disclosures, stock price charts and equity rating histories regarding companies that are the subject of this report, please see the Morgan Stanley Research Disclosure Websiteat www.morganstanley.com/eqr/disclosures/webapp/generalresearch, or contact your investment representative or Morgan Stanley Research at 1585 Broadway, (Attention: ResearchManagement), New York, NY, 10036 USA. For valuation methodology and risks associated with any recommendation, rating or price target referenced in this research report, please contact the Client Support Team as follows: US/Canada+1 800 303-2495; Hong Kong +852 2848-5999; Latin America +1 718 754-5444 (U.S.); London +44 (0)20-7425-8169; Singapore +65 6834-6860; Sydney +61 (0)2-9770-1505; Tokyo +81(0)3-6836-9000. Alternatively you may contact your investment representative or Morgan Stanley Research at 1585 Broadway, (Attention: Research Management), New York, NY 10036 USA.Analyst Certification The following analysts hereby certify that their views about the companies and their securities discussed in this report are accurately expressed and that they have not received and will notreceive direct or indirect compensation in exchange for expressing specific recommendations or views in this report: Yu Shirakawa. Global Research Conflict Management Policy Morgan Stanley Research has been published in accordance with our conflict management policy, which is available at www.morganstanley.com/institutional/research/conflictpolicies. APortuguese version of the policy can be found at www.morganstanley.com.br Important Regulatory Disclosures on Subject Companies As of April 30, 2026, Morgan Stanley beneficially owned 1% or more of a class of common equity securities of the following companies covered in Morgan Stanley Research:Furukawa Electric,Sumitomo Electri