Is AI's favorite more from the wire sector than semiconductors? ! The highest rush, Furukawa Electric doubled in about 3 weeks! There are also investment opportunities in 7 stocks upstream and downstream.

ビットバレー投資家 wrote a column · Nov 25, 2024 09:00

The stock prices of the four wire companies are performing well. $Sumitomo Electric Industries (5802.JP)$、 $Furukawa Electric (5801.JP)$、 $Fujikura (5803.JP)$the "Three Big Electrical Wire Companies" $SWCC (5805.JP)$のThe four stocks all hit year-to-date highs in November. Furukawa Electric's stock price increased 1.8 times in about 3 weeks, while the other three companies reached all-time highs.。
In the background, there is a growing demand for power cables for datacenters expanding in the AI boom, as well as wire harnesses for EVs (electric vehicles). Manufacturing EVs requires approximately four times more copper than gasoline cars. The rising demand for copper due to concerns about supply shortages has also contributed to the upward trend in copper prices.
Check investment opportunities in four wire companies with strong stock prices and relatively undervalued upstream and downstream related stocks.

Four wire companies with strong performance

Is AI's favorite more from the wire sector than semiconductors? ! The highest rush, Furukawa Electric doubled in about 3 weeks! There are also investment opport...

All four wire manufacturers have seen their stock prices rise. In November, all four reached their annual highs, with three of them hitting all-time highs since their listing, excluding Furukawa Electric which surged 76% between the 6th and 22nd.

The reason for the stock price increase is the positive results announced this month for the interim period ending March 2025 (April-September). Furukawa Electric saw double-digit revenue growth, shifting from a loss to profit compared to the same period last year. The revised full-year performance outlook forecasts a net profit 3.4 times higher than the previous year, while the year-end dividend forecast has been significantly raised from 60 yen to 90 yen, similar to the previous year.
The operating profit for the interim period at the other three companies has significantly increased by 77-133% compared to the same period last year, prompting upward revisions in dividend and full-year forecasts.

Four noteworthy stocks in the upstream sector
Despite the strong performance, caution could be warranted for Furukawa Electric, which has surged recently, and Fujikura, with a PBR exceeding 4.5 times.
Therefore,It is also a strategy to pay attention to related stocks located upstream and downstream of the electric wire manufacturing sector.I guess.
Companies with shareholding in copper mines and copper refining businesses manufacturing copper ingots are relevant to the upstream business of electric wire manufacturing.
The four companies that hold shareholding in copper mines and handle copper refining and processing,Having a PBR below 1, they are relatively undervalued..

$Mitsui Mining and Smelting (5706.JP)$The interim financial results for the period ending in March 2025 (April-September),Operating profit has increased more than eight times compared to the same period last year.The company has announced an upward revision of its full-year outlook and also disclosed an increase in dividend estimates. $Mitsubishi Materials (5711.JP)$For the interim financial results of the 25th fiscal year ending March, covering the period from April to September,Operating profit has grown 2.3 times compared to the same period last year,and has been performing well.

Three notable stocks downstream
Even the electrical wire trading company positioned in the downstream business of electrical wire, is performing well. $Inaba Denkisangyo (9934.JP)$has achieved a double-digit increase in both revenue and profit for the interim financial results of the 25th fiscal year ending March. $Senshu Electric (9824.JP)$and $DAIKO Tsusan (7673.JP)$Both the latest financial statements for the third quarter of October in the 24th year (November to July) and the first quarter of May in the 25th year (June to August) areDouble-digit growth compared to the same period last year.It has become so.

Reference: A major trading company holding equity interests in copper mines.
While major trading companies surpass copper smelters in terms of owning equity in copper mines, it seems limited for diversified trading companies to solely influence stock prices through copper business.
However,In the future, if copper prices continue to soar, there is potential to boost performance..
Among these, $Mitsubishi (8058.JP)$、Possessing the largest domestic copper production capacity based on copper ore mining rights.It boasts an annual production capacity of over 0.25 million tons.Approximately half of the group's total metal resource investment is allocated to the copper business.When production at the Kejabeco copper mine (Peru), in which it holds a 40% stake, is fully operational, production is expected to increase to around 0.4 million tons.