Kao (4452) AI Stock Analysis

• Market Cap: ¥3.11T
• Dividend Yield: 2.27%
• Average Volume (3M): 1.47M
• Price to Earnings (P/E): 27.2
• Beta (1Y): 0.14
• Revenue Growth: 6.57%
• EPS Growth: 105.73%
• Country: JP
• Employees: 32,566
• Sector: Consumer Defensive
• Sector Strength: 63
• Industry: Household & Personal Products
• EPS (TTM): 49.19
• Shares Outstanding: 465,900,000
• 10 Day Avg. Volume: 985,120
• 30 Day Avg. Volume: 1,472,173
• PEG Ratio: -1.40
• Price to Book (P/B): 2.54
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 45.94
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ¥7,650.05
• Price Target Upside: 16.23% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 80 Outperform
• Price Target: ¥7,614.00 ▲(15.68%Upside)

Kao's strong financial health and positive earnings call contribute significantly to its stock score. While technical analysis indicates strong momentum, valuation reflects a fair market value. Challenges such as overseas sales decline and potential tariff impacts are notable risks.

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 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 the sale of its diverse range of consumer goods and chemical products. The company's revenue streams are primarily divided into four segments: Beauty Care, Health Care, Fabric and Home Care, and Chemicals. The Beauty Care segment includes skincare, haircare, and cosmetics, which are sold under various brand names through retail channels. The Health Care segment encompasses sanitary products and personal health items. The Fabric and Home Care segment offers household cleaning products, such as laundry detergents and cleaning agents. Additionally, Kao's Chemicals segment provides chemical products that cater to industries such as electronics, automotive, and construction. The company's earnings are bolstered by strategic partnerships, research and development investments, and a strong marketing presence to maintain its competitive edge in the global market.

Kao Financial Statement Overview

Summary

Kao shows strong financial performance with robust revenue growth and improving profitability. The balance sheet is stable, though there are concerns about leverage. Cash flow generation is solid but shows potential volatility.

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
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
628.45B	638.40B	560.43B	548.34B	573.19B	590.69B
	EBIT
155.78B	146.64B	60.03B	110.07B	143.51B	175.56B
	EBITDA
250.12B	235.07B	154.50B	205.46B	237.32B	260.73B
	Net Income Common Stockholders
114.15B	107.77B	43.87B	86.04B	109.64B	126.14B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
278.72B	368.24B	291.66B	271.85B	342.16B	360.43B
	Total Assets
1.77T	1.87T	1.77T	1.73T	1.70T	1.67T
	Total Debt
246.14B	245.33B	261.07B	262.89B	268.68B	274.21B
	Net Debt
-32.58B	-112.39B	-30.59B	-5.36B	-67.39B	-78.97B
	Total Liabilities
715.49B	768.40B	757.70B	730.97B	720.13B	727.42B
	Stockholders Equity
1.03T	1.07T	983.66B	972.06B	965.14B	923.69B
Cash Flow		Free Cash Flow
127.92B	144.18B	136.03B	53.70B	104.00B	144.87B
	Operating Cash Flow
188.34B	201.59B	202.48B	130.91B	175.52B	214.72B
	Investing Cash Flow
-46.13B	-45.90B	-109.30B	-74.91B	-67.23B	-61.94B
	Financing Cash Flow
-113.95B	-104.58B	-79.98B	-139.31B	-141.57B	-87.06B

Kao Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 6582.00
• 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 Neutral. The current price of 6582 is below the 20-day moving average (MA) of 6642.20, above the 50-day MA of 6338.58, and above the 200-day MA of 6452.83, indicating a neutral trend. The MACD of 84.43 indicates Positive momentum. The RSI at 51.21 is Neutral, neither overbought nor oversold. The STOCH value of 18.26 is Positive, 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	80 Outperform	¥3.11T	27.21	11.12%	2.27%	6.57%	105.73%
Sector *	65 Neutral	$8.76B	15.22	4.69%	4.58%	3.64%	-2.90%
KOSCF		$2.27B	60.59	2.08%	0.01%	―	―
LIOPF		$2.85B	19.80	7.58%	1.85%	―	―
PORBF		$2.02B	41.87	4.49%	4.29%	―	―
UNCHF		$14.27B	22.58	11.87%	1.21%	―	―
4911	60 Neutral	¥986.73B	496.62		2.43%	-1.33%	-139.30%

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.