Kao (4452) AI Stock Analysis

• Market Cap: $3.14T
• Dividend Yield: 2.27%
• Average Volume (3M): 1.39M
• Price to Earnings (P/E): 27.5
• Beta (1Y): 0.12
• Revenue Growth: 4.26%
• EPS Growth: 61.42%
• Country: JP
• Employees: 32,566
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Household & Personal Products
• EPS (TTM): 57.66
• Shares Outstanding: 465,900,000
• 10 Day Avg. Volume: 1,111,900
• 30 Day Avg. Volume: 1,394,703
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.94
• Enterprise Value/Revenue: 1.79
• Enterprise Value/Gross Profit: 4.55
• Enterprise Value/Ebitda: 11.85
• 1Y Price Target: $7,662.66
• Price Target Upside: 13.30% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 70 Neutral
• Price Target: ¥7,404.00 ▲(9.48% Upside)

Kao's overall stock score reflects a stable financial foundation with strong profitability and efficient operations. The earnings call provided a positive outlook with significant growth in key segments, despite challenges in overseas markets and potential tariff impacts. However, the high P/E ratio and moderate technical indicators suggest caution.

Positive Factors

Negative Factors

Kao Business Overview & Revenue Model

Company Description

Kao Corporation develops and sells cosmetic, skin/hair care, human health care, fabric and home care, and chemical products. It operates through five segments: Hygiene and Living Care Business, Health and Beauty Care Business, Life Care Business, Cosmetics Business, and Chemical Business. The Hygiene and Living Care Business segment offers laundry detergents; fabric treatments; kitchen, paper, and house cleaning products; sanitary napkins; and baby diapers. The Health and Beauty Care Business segments provides skin and hair care products, professional hair care products, bath additives, and oral care and thermo products. The Life Care Business segments offers health drinks, as well as hygiene products for commercial use. The Cosmetics Business segment provides counseling and self-selection cosmetic products. The Chemical Business segment offers oleo chemicals; fat and oil derivatives; surfactants; fragrances; water-reducing admixtures; casting sand binders; plastics additives; process chemicals; toners and toner binders; inkjet ink colorants and ink; fine polishing agents and cleaners; and materials and process chemicals. The company was formerly known as Kao Soap Co., Ltd. and changed its name to Kao Corporation in 1982. Kao Corporation was founded in 1887 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Kao Corporation generates revenue through a diversified portfolio of products across its various sectors. In the beauty care segment, the company earns money by selling cosmetics, hair care, and skin care products under well-known brands such as Kanebo, Bioré, and John Frieda. The fabric and home care segment contributes to revenue through the sale of detergents, fabric softeners, and household cleaning products. The health care segment includes sanitary products like diapers and sanitary napkins, which are key revenue drivers. Additionally, the chemical segment provides industrial chemicals that are essential for various industries, further bolstering Kao's earnings. The company also benefits from strategic partnerships and distribution networks, which enhance its market reach and sales globally.

Kao Financial Statement Overview

Summary

Kao's financial performance is stable with strong profitability and efficient operations. However, the decline in revenue growth and negative free cash flow growth are concerns. The company's low leverage and solid equity position provide a buffer against these challenges.

Income Statement

Kao's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) data indicates a decline in revenue growth rate by 18.3%, which is a concern. However, the company maintains a healthy gross profit margin of 38% and a net profit margin of 6.9%. The EBIT and EBITDA margins are also solid at 9.8% and 15.1%, respectively, indicating efficient operations despite revenue challenges.

Balance Sheet

The balance sheet reflects a strong financial position with a low debt-to-equity ratio of 0.24, suggesting prudent leverage management. The return on equity (ROE) is 11%, indicating good profitability relative to shareholder equity. The equity ratio stands at 58.4%, showing a robust capital structure with significant equity backing.

Cash Flow

Cash flow analysis reveals some areas of concern. The free cash flow growth rate is negative at -2.96%, indicating a decline in cash generation. However, the operating cash flow to net income ratio is 0.42, and the free cash flow to net income ratio is 0.68, suggesting that the company still generates adequate cash relative to its net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.65T	1.63T	1.53T	1.55T	1.42T	1.38T
Gross Profit	647.26B	638.40B	560.43B	548.34B	573.19B	590.69B
EBITDA	248.51B	239.63B	154.50B	205.46B	239.94B	265.89B
Net Income	113.98B	107.77B	43.87B	86.04B	109.64B	126.14B
Balance Sheet
Total Assets	1.80T	1.87T	1.77T	1.73T	1.70T	1.67T
Cash, Cash Equivalents and Short-Term Investments	321.58B	368.24B	291.66B	271.85B	342.16B	360.43B
Total Debt	240.62B	245.33B	261.07B	262.89B	268.68B	274.21B
Total Liabilities	723.67B	768.40B	757.70B	730.97B	720.13B	727.42B
Stockholders Equity	1.05T	1.07T	983.66B	972.06B	965.14B	923.69B
Cash Flow
Free Cash Flow	124.14B	144.18B	136.03B	53.70B	104.00B	144.87B
Operating Cash Flow	183.95B	201.59B	202.48B	130.91B	175.52B	214.72B
Investing Cash Flow	-52.61B	-45.90B	-109.30B	-74.91B	-67.23B	-61.94B
Financing Cash Flow	-100.22B	-104.58B	-79.98B	-139.31B	-141.57B	-87.06B

Kao Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6763.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4452, the sentiment is Positive. The current price of 6763 is below the 20-day moving average (MA) of 6790.25, above the 50-day MA of 6726.50, and above the 200-day MA of 6398.55, indicating a neutral trend. The MACD of 17.18 indicates Positive momentum. The RSI at 49.20 is Neutral, neither overbought nor oversold. The STOCH value of 15.45 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4452.

Kao Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4452	70 Neutral	$3.14T	27.49	10.99%	2.27%	4.26%	61.42%
4912	69 Neutral	437.23B	21.34	7.05%	1.80%	1.29%	4.72%
4927	68 Neutral	290.25B	45.16	5.63%	3.96%	-0.89%	-34.14%
8113	66 Neutral	1.79T	20.47	11.01%	3.17%	-1.04%	-6.98%
4922	62 Neutral	337.74B	112.77	2.76%	2.36%	2.82%	-79.45%
4911	49 Neutral	946.79B	-731.64	-0.21%	2.11%	-3.60%	-112.93%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%

Kao Corporate Events

Kao Corporation Reports Strong Q1 2025 Financial Performance

Kao Corporation reported a significant increase in its financial performance for the first quarter of 2025, with net sales rising by 6.6% and net income attributable to owners of the parent increasing by 38.7% compared to the same period in 2024. The company maintains a stable financial position with a slight decrease in total assets but an improved equity ratio. The forecast for the fiscal year ending December 31, 2025, anticipates continued growth in net sales and income, reflecting Kao’s strong market positioning and strategic initiatives.