Kao (4452) AI Stock Analysis

• Market Cap: $3.09T
• Dividend Yield: 2.3%
• Average Volume (3M): 1.30M
• Price to Earnings (P/E): 27.4
• Beta (1Y): 0.13
• Revenue Growth: 4.26%
• EPS Growth: 61.42%
• Country: JP
• Employees: 32,566
• Sector: Consumer Defensive
• Sector Strength: 46
• Industry: Household & Personal Products
• EPS (TTM): 57.66
• Shares Outstanding: 465,900,000
• 10 Day Avg. Volume: 1,593,510
• 30 Day Avg. Volume: 1,303,493
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.95
• Enterprise Value/Revenue: 1.78
• Enterprise Value/Gross Profit: 4.69
• Enterprise Value/Ebitda: 11.78
• 1Y Price Target: $7,619.61
• Price Target Upside: 13.96% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 72 Outperform
• Price Target: ¥7,198.00 ▲(7.66% Upside)

Kao's stock score is driven by strong financial performance and a positive earnings outlook, with significant growth in sales and operating income. Technical indicators are neutral, and the valuation suggests the stock is priced for growth. Challenges such as potential impacts from U.S. tariffs and high raw material prices temper the overall outlook.

Positive Factors

Efficiency and Restructuring

Kao has implemented structural reforms aimed at enhancing efficiency and revamping its organization, which are expected to offset potential raw material cost increases.

Sales Growth

Kao appears to have firmly turned around and is on the path to recovery, with a projected increase in net sales across all regions.

Strategic Initiatives

The 'Global Sharp Top Strategy' aims to achieve significant growth by shifting from quantity to quality in product development and expanding the global rollout of high-value-added products.

Negative Factors

Currency Volatility

Potential volatility of JPY may cap near term re-rating and limit upside from currency translation effects.

Environmental Impact

Key downside risks include the prolonged impact of treated water disposal from the Fukushima nuclear power plant and consumption weakness.

Market Risks

Key downside risks include consumption weakness, an increase in input costs, and unsuccessful management's restructuring efforts.

Kao Business Overview & Revenue Model

Company Description

Kao Corporation, headquartered in Tokyo, Japan, is a leading global manufacturer of consumer goods and chemical products. The company operates across several sectors, including beauty care, health care, fabric and home care, and chemicals. Kao's core products include cosmetics, skin and hair care products, sanitary products, detergents, and industrial chemicals, catering to both consumer and industrial markets worldwide.

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 demonstrates strong financial performance with robust revenue growth and healthy profitability metrics. While the balance sheet is stable and cash flow generation is strong, minor concerns exist regarding cash flow volatility and leverage.

Income Statement

Kao demonstrates strong revenue growth, with a TTM (Trailing-Twelve-Months) increase, signaling a robust growth trajectory. Gross profit margins remain healthy, reflecting effective cost management. The net profit margin is improving, indicating enhanced profitability. However, slight fluctuations in EBIT and EBITDA margins suggest some operational challenges.

Balance Sheet

The balance sheet is strong with a solid equity position, as shown by a stable debt-to-equity ratio. Return on equity has improved, indicating efficient use of shareholder funds. The equity ratio is healthy, suggesting a stable financial structure. However, the presence of significant debt, while manageable, points to potential leverage risks.

Cash Flow

Cash flow performance is solid, with positive free cash flow growth. The operating cash flow to net income ratio demonstrates strong cash generation relative to net earnings. The free cash flow to net income ratio also supports financial health. However, fluctuations in investing and financing cash flows highlight potential volatility in capital allocation.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.63T	1.53T	1.55T	1.42T	1.38T
Gross Profit	638.40B	560.43B	548.34B	573.19B	590.69B
EBITDA	235.07B	154.50B	205.46B	237.32B	260.73B
Net Income	107.77B	43.87B	86.04B	109.64B	126.14B
Balance Sheet
Total Assets	1.87T	1.77T	1.73T	1.70T	1.67T
Cash, Cash Equivalents and Short-Term Investments	368.24B	291.66B	271.85B	342.16B	360.43B
Total Debt	245.33B	261.07B	262.89B	268.68B	274.21B
Total Liabilities	768.40B	757.70B	730.97B	720.13B	727.42B
Stockholders Equity	1.07T	983.66B	972.06B	965.14B	923.69B
Cash Flow
Free Cash Flow	144.18B	136.03B	53.70B	104.00B	144.87B
Operating Cash Flow	201.59B	202.48B	130.91B	175.52B	214.72B
Investing Cash Flow	-45.90B	-109.30B	-74.91B	-67.23B	-61.94B
Financing Cash Flow	-104.58B	-79.98B	-139.31B	-141.57B	-87.06B

Kao Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 6686.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4452, the sentiment is Neutral. The current price of 6686 is below the 20-day moving average (MA) of 6767.65, above the 50-day MA of 6636.13, and above the 200-day MA of 6361.18, indicating a neutral trend. The MACD of 15.81 indicates Positive momentum. The RSI at 47.59 is Neutral, neither overbought nor oversold. The STOCH value of 32.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4452.

Kao Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4452	72 Outperform	$3.09T	27.44	10.99%	2.30%	4.26%	61.42%
Sector *	63 Neutral	$20.46B	14.47	-3.60%	3.13%	2.63%	-6.18%
KOSCF	―	$2.20B	110.59	1.11%	3.15%	―	―
LIOPF	―	$2.90B	21.80	7.29%	3.00%	―	―
PORBF	―	$1.93B	45.07	3.99%	5.53%	―	―
UNCHF	―	$12.07B	21.32	11.28%	1.58%	―	―
4911	58 Neutral	¥967.16B	496.62		2.07%	-3.60%	-112.93%

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.