Meiko Electronics Co., Ltd. (6787.T) fair value

ACCE thesis

Meiko Electronics makes multilayer printed circuit boards and substrates for smartphones, automotive electronics and other high-density applications, and it sits in the upper part of Japan's PCB supply chain. The structural case rests on a narrow set of high-spec boards where qualification cycles are long and switching suppliers is costly, which tends to protect pricing once a customer design is won. Revenue growth of 38.0% is the number that stands out, and it points to a demand upturn in the company's core end markets rather than a slow grind. The question for the deeper look is whether that growth converts into margins: gross margin of 20.6% and operating margin of 8.3% are solid for a board maker but leave limited room for error, and a 29.2x trailing multiple with a 30.0x forward multiple means the market already expects the growth to hold. ROE of 15.3% is respectable and worth checking against capacity additions and capital intensity over the next few reporting periods.