F.C.C. Co., Ltd. manufactures and sells clutches, facings, and catalysts for automobiles, motorcycles, and general-purpose machinery in Japan and internationally. Its clutches for motorcycles comprise wet-type multi-disc, wet-type multi-disc assisted and slipper, wet-type and dry centrifugal, and racing clutches, as well as pulleys for belt converters for use in motorcycles, scooters, road sports bikes, ATVs, and racing vehicles. The company’s automobiles clutches include automatic transmission, CVT, torque converter lockup, manual transmission, and 4WD vehicle clutches. In addition, its general-purpose clutches consist of FCCTRAC, a cam-type torque-sensitive limited slip differential for four-wheel ATVs; and hydraulic static transmissions for snow throwers and lawn mowers. The company was formerly known as Fuji Chemical Co., Ltd. and changed its name to F.C.C. Co., Ltd. in July 1984. F.C.C. Co., Ltd. was incorporated in 1939 and is headquartered in Hamamatsu, Japan.
Strategy: Beat the Nikkei 225
Return at exit: 6.5%
Modest growth amid decreasing profitability
• F.C.C. Co Ltd. rotated out of our strategy based on relative positioning against alternative opportunities.
• Despite solid recent price performance (35.8% over 6 months), the stock now trades at 97% of its 52-week high with analyst targets (3200 JPY) below the current price (3730 JPY), suggesting limited near-term upside.
• Profitability metrics show concerning trends with EBITDA declining by 5.8% while revenue growth remains modest at just 2%.
• The company maintains several positive attributes, including an attractive 3.6% dividend yield, impressive 63.4% dividend growth, and reasonable valuation (P/E: 10.5, P/B: 0.95).
• This change reflects portfolio rotation, not a sell signal.