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actual human individual writing an actual post and putting his money where his mouth is: 5000 shares at ACB 2810 yen ($17.69), total \~$88,500
DNP is, imo, a misclassified and undervalued AI infra play - background:
\> founded in the fucking meiji era
\> prints documents and cereal boxes
\> started making OLED FMM and NIL templates in the mid 2000s, was one of the first to achieve sub-10nm resolution
\> Elliot management took an activist position a few years back, beat them into a huge stock buyback program, had them refocus R&D on the semiconductor / optics side, stock goes up
\> just in the last 12 months they’ve unveiled a new 1.4nm pattern, launched a new TGV glass substrate line, and just confirmed they achieved an NIL template confirming their work with the 10nm circuit line
Current timeline:
They’re currently sitting at a P/E of around 15-16x, earnings of nearly 6% net margin, nearly 9% ROE, debt / equity around 0.2 with a 52 week high of around 3400 yen (currently closed at 2950) - up about 50% in the last year, much less than every other AI infra play out there. Average P/E for Japanese semi plays is closer to 40x
The market still looks at them as a printing company bc around 60% of their rev is printing - but for the first time last year, over 50% of their profit came from the “electronics” segment (the juicy stuff), the company expects this to accelerate and keep growing!
Photomasks: DNP has between a quarter and a third of global share of photo mask demand and were the first to use a multi beam writing technique. They maintain massive contracts with Samsung and Hynix for these products. The currently have a Japanese govt contract to work an EUV development with Rapidus (govt backed fab)
NIL Templates: DNP has a proprietary self aligned double patterning process that allowed them to develop the 1.4mn chips. These are required all sorts of processes, most important Canon’s NIL development - they have a recently inked a contract to increase uptake with mass production coming in FY28
OLED FMM: DNP has around 50% global market share of fine metal masks, used primarily in phones and laptops and tvs
TGV Glass Substrates: the next hot thing - it sits between the motherboard and AI chip dies, replacing the current organic substrates. These are becoming a huge bottleneck with companies like Absolics and Ibiden also rushing to manufacture. DNP has mass production targeted for FY28 after they opened their Kuki plant at the end of last year
Optical Films: they make a huge amount of films that are directly targeted at AI optical connections and co-packaged optics for 800GB and 1.6TB transceivers - similar tech used by Santec and Coherent. This is their fastest growing segment
DNP is already deeply embedded in the AI supply chain. They’ve been contacted to work with canon since 2014, Kioxia since 2021, Rapidus (Japanese govt backed fab), TSMC + Intel + PLAB for a IMS nanofab mask, recent development agreement with IMEC, and Texas institute for electronics has been running on DNP NILs since 2024
They’re needed for memory, they’re needed for optics, they’re already sitting on a profitable legacy business with strong cash flow, and they’re in the middle of a huge fucking share buyback
Even if their new stuff (the NIL and TGV) don’t pan out, they’ve still got a hefty chunk of OLED FMM, photomask, and optical film markets in their pocket - that segment will continue to grow regardless of their new research projects, the NIL and TGV are just additional catalysts. All of this on top of their legacy printing business, which is profitable!!
Risk:
Like many meiji era Japanese value stocks, this thing could decide to move sideways for the next century and then well, that was a poor use of my 90k lol but I’ve got faith in this thing to get some legs! As always, not financial advice, do your own research, no crying in the casino, etc. also there is still the whole Iran thing going on so ya know… be careful out there lol