45th Interim(From April 1, 2019 to September 30, 2019)

Securities code: 6787

Financial highlights
Net sales

59,122

Consolidated balance sheet
End of FY2018(As of March 31, 2019)

million yen（in million yen）

Current assets

56,02160,56364,634

66,06558,553

61,178

269

314

5,811

4,573

120,655

126,629

Current liabilities

47,93250,287

Noncurrent liabilities

39,13544,300Total liabilities

87,06894,58830,44632,28812,88812,888

6,464

6,464

Retained earnings

11,48913,332

Treasury stocks

Investments and other assets
Total assets
Liabilities

Net assets
Shareholders equity
CapitalCapital surplus

△396

△396

Cumulative other comprehensive income

3,141

△248

Valuation diﬀerence on available-for-sale securities

△65

11

183

92

Foreign currency translation adjustment

3,322

△76

Remeasurements of deﬁned beneﬁt plans

△298

△276

Deferred gains or losses on hedges

Total net assets
Total liabilities and net assets

Consolidated statement of income
First half of the 44th term
(year to date)(As of September 30, 2019)Noncurrent assets
Property, plant and equipment

3,410

At the end of the second quarter forthe ﬁscal year under review

AssetsIntangible assets

33,58732,040120,655

126,629(April 1, 2018 to September 30, 2018)

million yen（in million yen）

59,122

Cost of sales

50,33949,961Gross proﬁt

11,418

9,160

Selling, general and administrative expenses

5,744

5,749

Operating income

5,674

3,410

Non-operating income

1,641

266

Non-operating expenses

970

654

6,345

3,022

Extraordinary income

1

3

Extraordinary losses

129

182

6,217

2,842

Income taxes

886

476

Net income

5,331

2,366

Net income attributable to owners of parent

5,331

2,366

Net income before income taxes

In the automotive PCB field, sales increased by 700 million yen year-on-year thanks to thefavorable outcome from increasingly higher multi-layering including the flow of electrification andthe switch to HDI PCBs. However, in the smartphone PCB field, our production output
decreased and sales shrank by 4.6 billion yen year-on-year. Meanwhile, we received favorable
orders for PCBs for IoT modules and AI appliances and HDI PCBs for amusement industry inother fields. As a result, sales increased 2.1 billion yen year-on-year.
As a result, we posted net sales of 59,122 million yen (-4.3%) year on year, down 2,636 million
yen compared with the same quarter of the previous year. Concerning profits and losses,
operating income was 3,410 million yen (-39.9%) year on year, ordinary income 3,022 million yen(-52.4%) year on year and net income attributable to owners of parent 2,366 million yen (-55.6%)
year on year.

Consolidated statement of cash ﬂows
First half of the 44th term
(year to date)(April 1, 2019 to September 30, 2019)61,758

Ordinary income

2,366First half of the 45th term
(year to date)

Net sales

Key points of the financial results●Consolidated statement of income

Net income attributable to owners of parent

Operating income(April 1, 2018 to September 30, 2018)

million yen（in million yen）
First half of the 45th term
(year to date)(April 1, 2019 to September 30, 2019)

Net cash generated from operating activities

6,900

4,480

Net cash expended in investment activities△9,153△8,899Net cash generated from (expended in) ﬁnancing activities

△774

5,828

The eﬀect of changes in the exchange rate on cash and cash equivalents

153

△382

Net increase (decrease) in cash and cash equivalents△2,873

1,027

Cash and cash equivalents at the beginning of the period

15,19011,419Cash and cash equivalents at the end of the period

12,316

12,446●Consolidated balance sheet

Total assets stood at 153,241 million yen, a decrease of 5,376 million yen from the end of the previous
consolidated fiscal year. This decrease is mainly due to a decrease of credits for sales despite the increasein advance payments due to an increase in unfinished work.
Liabilities stood at 83,939 million yen, a decrease of 6,147 million yen from the end of the previous
consolidated fiscal year. This decrease is mainly due to a decrease of payables for sales despite theincrease in advance payments due to an increase in unfinished work.
Net assets stood at 69,302 million yen, an increase of 770 million yen from the end of the previous
consolidated fiscal year. This increase is mainly due to an increase of net income attributable to owners ofparent while retained earnings decreased after the payment of dividends and valuation difference on
available-for-sale securities decreased.

Interview with the President

To our shareholders
I would like to express my sincere gratitude to all shareholders and investors for theoutstanding support.
The following is a report summarizing the operating results for the first half of the term
ending March 2020.

Yuichiro Naya, President & CEO
Consolidated results for the first half of FY2019 (in 100 million yen)
Year on year

First halfof FY2018

First halfof FY2019

Net sales

618

591

-27

-4.3%

Operating income

57

34

-23

-39.9%

30-33-52.4%

24-29-55.6%

9.2%

5.8%

10.2%

5.1%

63

Ordinary income

53

Net income attributableto owners of parent

8.6%

4.0%

Exchange
USD/YENrate

110.64108.66

Increase/decrease Increase/decrease rate

First half of FY2018 First half of FY2019 Increase/decrease
Operating income(Operating margin)

19

267

Automobiles
Smartphones

193

Others

158

274

7.1%

29

147

14.5%

9

57

591

9.2%

Net sales

backdrop, we expect the launch of 5G and the beginning of base station demand to havean effect on the smartphone and automatic driving fields. Therefore, it is expected that
there will be a gradual improvement in the order environment.
Under such circumstances, our corporate group is seeing an increasing number ofelectronics toward the arrival of the 5G era. Nevertheless, we were impacted by thesluggishness of the smartphone market in the current second quarter. As for automotive
PCBs, sales increased by 700 million yen year-on-year thanks to the favorable outcome
from increasingly higher multi-layering including the flow of electrification and the switch to

7

-4

5.5％

2.6%

-21.1%

14

-46

-15

sales shrank by 4.6 billion yen year-on-year. We received favorable orders for PCBs for IoT

9.5%-23.8%-51.7%

modules and AI appliances and HDI PCBs for amusement industry in other fields. As a

12

-4

2.9%

7.6%

-44.4%

34

-27

-23

5.8%

-4.3%

-39.9%

Consolidated earnings forecast for FY2019
Forecast for
FY2019impact of a global economic slowdown and customer inventory adjustments. Against this

15

5

170

5.9%

618

Total

Operating income
Sales Operating income(Operating margin) (growth rate)(growth rate)

Sales

The electronic parts field was weak in the current second quarter. This was due to theprojects involving next-generation automobiles, smartphones and IoT/AI consumer

Revenue from each product in the first half of FY2019 (in 100 million yen)
Sales

Regarding the operating results in the first half(in 100 million yen)

Results for the
Forecast for the
first half of FY2019 second half of FY2019

HDI PCBs. However, in the smartphone PCB field, our production output decreased andresult, sales increased 1.2 billion yen year-on-year.

Regarding the forecast for the second half
In the second half, it is estimated that sales of automotive PCBs would be on par withthose in the first half of the year due to the advancement of electrification and

1,200

591

609

motorization. We also expect sales of smartphone PCBs to be about the same as those

75

34

41

in the first half of the year. This is because 5G smartphone projects will gradually

33

increase from the latter part of the second half of the year. PCBs for IoT modules and AI

Operating income(operating margin)

6.3%

5.8%

6.7%

5.3%

5.1%

5.4%

appliances will continue to perform strongly in other fields. As for EMS business, we will

4.4%

4.0%

4.7%

implement enhancement measures such as turning Meiko Towada Vietnam into a

Exchange
USD/YENrate

111.00108.66108.00subsidiary as a way of increasing our production capacity. With this, we expect an

Investment Plan

Domestic

63

Ordinary income(ordinary income rate)30

53

Net income attributableto owners of parent(net margin)

24

Overseas150

29(in 100 million yen)

Additional Investment

125

150
25

Regarding the investment

115

115

billion yen from 12.5 billion yen to 15 billion yen. The breakdown of this includes

30

10

10

2018

Initial Plan for FY2019

Revised Plan for FY2019

64

68

68

120

Depreciation

We have decided to increase the amount we plan to invest in this fiscal year by 2.5
investment in joint-ventures in the EMS field and reinforcing facilities in anticipation of an

Results for each product in the first half of FY2019
Automobiles

increase in sales.

Smartphones

StorageOﬃce equipment

Digital home appliances

274

Amusement

33

22 14 36147

31

with the expectation that 5G projects will increase.

(in 100 million yen)

Industrial equipment and others

8

Results in thefirst half of FY2019

increase in orders received. In addition to this, we will reinforce our production facilities

IoT/AI appliances

591

26
11 18

Results in thefirst half of FY2018

267

23

193

33
0

100

200

300

400

500

8 38
27
600

618

EMS and others

Results for each spec in the first half of FY2019
Double-sided PCB

Four-layer PCB

Results in thefirst half of FY2019 35

Results in thefirst half of FY2018 39
0

Six-layers or more

HDI PCB

Heat dissipation board(in 100 million yen)
Flexible PCBs and others

9
139

112

36

252

EMS business

591

8
10
152

107

38

268
4

100

200

300

400

500

600

618

Special Feature
Regarding the strategy for factories in Vietnam
The first factory is a flexible substrate/EMS factory. However, it is involved in the final
product assembly business as a joint venture with a Chinese ODM manufacturer called

Flexible PCBs

Shanghai Longcheer Technology Co., Ltd. in part of its space. In addition, it is continuing
to strengthen proposals in the EMS business for companies without fabrication facilities. It

JV with Shanghai
Longcheer Technology

is working to expand sales channels (e.g., those for automotive, smartphone andamusement applications) for its flexible PCBs. Through these efforts, the factory is
promoting measures to expand its production scale.
The second factory underwent refurbishment as a factory dedicated to automotive
PCBs. It is looking to increase productivity by specializing in the production ofFirst Factory

IoT modules andAI appliances

Flexible PCBs/EMS

through-hole PCBs and HDI PCBs for automobiles.

In-vehicle
through-hole PCBs

The third factory has introduced a production line for HDI PCBs following a MSAP
method. It is promoting measures to expand production of high-end smartphones and 5G
compatible smartphones on this line. In addition to this, the factory will undergo

HDI PCBs forautomobiles

development to become a factory that produces PCBs necessary for next-generation
automobiles. These include PCBs for milli-wave radar for ADAS applications, PCBs for
power device for electric vehicle applications, and ultra-thick copper board and copper
pin substrates for heat dissipation applications.
The Thang Long factory produces smartphone PCBs. However, we will develop it as a

Second Factory
Factory specializing in automotive PCBs

factory to support high-frequency module production for which the market is expected to
expand in the future.

Smartphone

We will develop Meiko Towada Vietnam as a factory that will be responsible for
expanding the EMS business (e.g., high-frequency module mounting).

5G smartphone

Regarding the innovation realized by 5G
The advantages brought about by 5G communications include the increase in speed ofcommunications, the ability to connect many devices simultaneously and the low level of
network delays. It is anticipated that progress will be made in fields close to daily life such

Third Factory
MSAP/Developed in-vehicle products

Developed in-vehicle
products

as speeding up smartphones, automatic driving and communications between cars,
applications in the IoT field, remote monitoring and telemedicine as areas that will utilize

Smartphonethese advantages. This progress is then expected to bring about changes in the living
environment. Highly sophisticated specifications are required for PCBS to respond to this.

High-frequency module

For example, the line and space (L/S) is 40 to 50 μ in current smartphones, but 25 μ in 5G
communication modules. Accordingly, high sophistication is expected. We havecompleted the introduction of a MSAP line necessary to cope with this. In addition to this,
we are also working on handling milli-wave radars necessary for automatic driving,communication modules used in connected cars, etc., in automotive PCBs. Moreover,Thang Long FactoryHigh-frequency module

demand relating to 5G will increase together with the increase in the amount of PCBs
used. This is also creating business opportunities in the EMS business that is theHigh-frequency module

post-process of PCBs. We are planning to continue actively implementing new businessmeasures and improving business results by capturing projects in the area of EMS basedon PCBs negotiations.
In order to live up to the support and expectations from stakeholders, including
shareholders, we will implement new measures and improvement measures with utmost
effort, to improve our performance and corporate value. We would appreciate yourcontinued support and encouragement.

Conventional

Assign a dedicated signal to each one
Source: Website of Softbank

Three features and innovation in each industrial field

Ultra-high speed:
Maximum of 10 Gbps

Smartphones

Multiple simultaneous connections:
1 million units/km2 connections

Conventional + 5G
communications compatible
Vast number of sensors and terminals
Increase in communication
modules
Increase in passive components
High-density PCBs

Main requirements
of 5G
5G Features

Base Stations

Servers

Communications
systemSmartphone
IoT

Ultra-low delay:
Around 1 msec.

Cars

Acceleration in automatic driving level 4
Increase in connected cars
Acceleration in electrification (HV/PHV/EV)

EMS

Milli-wave
Conventional Communications

Automatic driving
Electrification
Connected cars

Server SSD(10 layers)

Data center SSD(16-layer high-frequency board)

Main board(L/S=50/50um)

Main board(MSAP L/S=30/30um⇒25/25um)

Communication module(L/S=35/35um)

Communication module(MSAP L/S=25/25um)

Milli-wave radar(MSAP high-frequency board)

TCU/V2X communication module(12-layer any-layer)

Power device(Copper inlay thick copper board)

Automatic driving

New markets for printed wiring boards (PCB) will be created in 5G
and the existing market will expand

Level 2

2019
Source: Ministry of Internal Aﬀairs and Communications

5G Communications

Macro cell/Small cell/High-frequency module(Multilayer high-frequency board)(High-frequency board)

Base stations
servers

artphones
Increase in macro cells/small cells
Big data volume: 15 ZB (Increase in storage capacity)
Ethernet speed: 400 GbE (Increase in optical communication)
Automatic driving

Meiko Towada Vietnam

IVI (Infotainment)(3-stage build-up)
Level 32020

Vehicle computer(3-stage build-up)
Level 42025

MANAGEMENT VOICE

Toyohiko Tsuyuki,
Audit & Supervisory
Board Member (Standing)

VOL.

7

I was elected at the general meeting of shareholders held in June 2019 and I will carry out myduties as a standing audit & supervisory board member.
The role of auditors is viewed as being extremely important in recent years. I will strive to beable to contribute to the development of this company as far as possible. I will do this byestablishing even greater internal controls and conducting audits close to sites. I will also give
frank opinions and advice from my standpoint as an auditor to executive oﬃcers.
We have built our Third Factory in Vietnam and are promoting high quality and mass-production through smart technology. We have also launched an innovative productivity improvement
project across indirect departments to promote company-wide reform.
I would like to continue contributing to the enhancement of our corporate value to meet theneeds of all our shareholders and other stakeholders through audits in the future. Therefore,
I ask for your continued support.

Corporate data (As of September 30, 2019)
Corporate Proﬁle

Stock Information

MEIKO ELECTRONICS CO., LTD.
November 25, 1975
12,888 million yen
11,843 (consolidated)(Japan: 856) (Overseas: 10,987)
Outline of Business Design and manufacturing andsales of PCBs and auxiliaryelectronics business

Number of Shares Authorized

70,000,000 shares

Number of Shares Issued

26,173,893 shares

Number of Shareholders

Number of shares held

Name
Established
CapitalNo. of Employees(excluding treasury stock of 629,427 shares)

Principal Shareholders

President & CEO
Director and Senior Managing Executive Officer
Director and Senior Managing Executive Officer
Director and Managing Executive Officer
Director and Managing Executive Officer
Director
Director
Director
Audit & Supervisory Board Member (Standing)
Audit & Supervisory Board Member
Audit & Supervisory Board Member

Yuichiro Naya
Takahide Hirayama
Masakuni Shinozaki
Takahiro Matsuda
Junya Wada
Yoon Ho, Shin
Nao Tsuchiya
Yosuke Nishiyama
Toyohiko Tsuyuki
Takashi Harada
Takayuki SatoAﬃliated Companies
Yamagata Meiko Electronics Co., Ltd.
Meiko Tech Co., Ltd.
Meiko Techno Co., Ltd.
Meiko Electronics (Guangzhou Nansha) Co., Ltd.
Meiko Electronics (Wuhan) Co., Ltd.
Meiko Elec. Hong Kong. Co., Ltd.
Meiko Electronics Vietnam Co., Ltd.
Meiko Electronics Thang Long Co., Ltd.
Meiko Electronics America, Inc.
Meiko Electronics Europe GmbH

Auxiliary electronics business
Auxiliary electronics business
Auxiliary electronics business
Auxiliary electronics business
Auxiliary electronics business
Auxiliary electronics business
Auxiliary electronics business
Auxiliary electronics business
Auxiliary electronics business
Auxiliary electronics business

Fiscal year

Yuichiro Naya

4,703

17.97

Japan Trustee Services Bank, Ltd.
(Trust Account)

2,383

9.11

The Master Trust Bank of Japan, Ltd. (Trust Account)

1,297

4.96

BNP PARIBAS SECURITIES SERVICES LUXEMBOURG/JASDEC/FIM/LUXEMBOURG FUNDS/UCITS ASSETS

950

3.63

Meiko Kosan Co., Ltd.

608

2.32

Yuho, Ltd.

521

1.99

The Nomura Trust and Banking Co., Ltd. (Investment Trust Account)

481

1.84

Seiichi Naya

435

1.66

JP MORGAN CHASE BANK 385632

427

1.63

STATE STREET BANK AND TRUST COMPANY 505019

404

1.55

*The Company owns treasury stock of 629,427 shares and is excluded from theabove principal shareholders. The percentages for the total number of issued
shares have been calculated after excluding treasury stock.

Shareholding Structure (Common Stock)
Individuals and others 46.86%
Financial institutions 25.61%
Foreign institutions and others 17.80%
Other institutions

5.79%

Financial instruments business operators 1.58%
Treasury stock

Headquarters: 5-14-15 Ogami, Ayase, Kanagawa, 252-1104 Japan
Tel: 0467-76-6001 (main)
URL:
https://www.meiko-elec.com/
Notes on Forecasts
The information in this report contains future forecasts, such as the plans and business results of the Company.
These forecasts are based on information available at the time when these forecasts were made and certain
preconditions that the Company believes to be reasonable. Please note that actual business results may differ fromthe forecasts herein due to a variety of factors.

2.35%

April 1 to March 31 of the following year

Annual shareholders’ June
meeting
Record dateYear-end dividends: March 31
Interim dividends: September 30
Transfer agent

Sumitomo Mitsui Trust Bank, Limited
1-4-1 Marunouchi, Chiyoda-ku, Tokyo,
100-8233 Japan

Transfer office

Sumitomo Mitsui Trust Bank, Limited Stock
Transfer Agency Dept. 1-4-1 Marunouchi,
Chiyoda-ku, Tokyo, 100-8233 Japan
Sumitomo Mitsui Trust Bank, Limited
Stock Transfer Agency Dept.
2-8-4 Izumi, Suginami-ku, Tokyo,
168-0063 Japan

Number of shares held
% of shares held
(thousands of shares)

Name of shareholder

Executives

Shareholders’ Information

Address forsending mails

Contact

Tel: 0120-782-031

Stock exchange JASDAQ (Standard), Tokyo Stock Exchange
Method ofpublic noticeElectronic public notice in our official page
Official Page:
https://www.meiko-elec.com/ir/pa.shtml
In the event of an accident or other
unforeseen
eventsthat
prevent
publication of the electronic public notice,
it will be published in The Nikkei.

Enquiries concerning shareholdings•Shareholders who need to update information onshareholdings, including change of address andmethod of receiving dividends, are advised to contact
the securities companies where securities accounts
are held.
•Shareholders who do not have accounts withsecurities companies and need to process paymentsof dividends are advised to contact Sumitomo Mitsui
Trust Bank, Limited Stock Transfer Agency Dept. asstated above.