Kao (4452) AI Stock Analysis

• Market Cap: ¥2.92T
• Dividend Yield: 2.44%
• Average Volume (3M): 1.47M
• Price to Earnings (P/E): 24.0
• Beta (1Y): 0.14
• Revenue Growth: 4.62%
• EPS Growth: 47.68%
• Country: JP
• Employees: 32,566
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Household & Personal Products
• EPS (TTM): 75.79
• Shares Outstanding: 465,900,000
• 10 Day Avg. Volume: 1,645,420
• 30 Day Avg. Volume: 1,466,456
• PEG Ratio: 0.19
• Price to Book (P/B): 2.78
• Price to Sales (P/S): 1.82
• P/FCF Ratio: 20.59
• 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: ¥7,366.47
• Price Target Upside: 17.58% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: ¥7,016.00 ▲(11.99% Upside)

Kao's strong financial performance is the most significant factor, supported by solid profitability and a robust balance sheet. However, technical analysis indicates potential bearish momentum, and valuation metrics suggest the stock is fairly valued with an attractive dividend yield.

Positive Factors

Revenue Growth

Consistent revenue growth indicates Kao's ability to maintain market demand and expand its consumer base, supporting long-term business sustainability.

Balance Sheet Health

A robust balance sheet with low leverage enhances Kao's financial stability and flexibility, allowing for strategic investments and resilience against economic downturns.

Profitability

High profitability margins reflect Kao's efficient operations and pricing power, which are crucial for sustaining competitive advantage and shareholder value.

Negative Factors

Free Cash Flow Decline

Declining free cash flow growth may limit Kao's ability to reinvest in business expansion and innovation, potentially impacting future growth prospects.

Operating Cash Flow

A lower operating cash flow to net income ratio suggests potential inefficiencies in cash generation, which could affect liquidity and operational flexibility.

Market Position Challenges

Lack of recent strategic initiatives or partnerships may indicate challenges in maintaining or enhancing market position, affecting long-term competitive dynamics.

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 generates revenue through multiple key streams, primarily from the sale of its consumer products across various categories. The Beauty Care segment, which includes cosmetics, skincare, and haircare products, contributes significantly to its earnings, driven by strong brand loyalty and continuous innovation. The Health & Wellness segment, which encompasses dietary supplements and personal health products, also plays a vital role in revenue generation. Additionally, the Home Care segment, offering cleaning and laundry products, benefits from a broad consumer base seeking effective household solutions. Kao also engages in strategic partnerships with retailers and distributors, enhancing its market reach and presence. Factors contributing to its earnings include a focus on sustainability and eco-friendly products, which resonate with consumers, and a robust supply chain that enables efficient distribution. Overall, Kao's diversified product portfolio and commitment to innovation and sustainability are central to its revenue model.

Kao Financial Statement Overview

Summary

Kao demonstrates a stable financial foundation with strong profitability and efficient operations. However, the significant drop in revenue growth and negative free cash flow growth are areas that require attention. The company's low leverage and solid equity position provide a buffer against these challenges, but strategic initiatives may be needed to reignite growth.

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	1.67T	1.63T	1.53T	1.55T	1.42T	1.38T
Gross Profit	654.34B	638.40B	560.43B	548.34B	573.19B	590.69B
EBITDA	252.06B	239.63B	154.50B	205.46B	239.94B	265.89B
Net Income	121.46B	107.77B	43.87B	86.04B	109.64B	126.14B
Balance Sheet
Total Assets	1.79T	1.87T	1.77T	1.73T	1.70T	1.67T
Cash, Cash Equivalents and Short-Term Investments	285.88B	368.24B	291.66B	271.85B	342.16B	360.43B
Total Debt	237.67B	245.33B	261.07B	262.89B	268.68B	274.21B
Total Liabilities	734.30B	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	117.00B	144.18B	136.03B	53.70B	104.00B	144.87B
Operating Cash Flow	182.94B	201.59B	202.48B	130.91B	175.52B	214.72B
Investing Cash Flow	-67.60B	-45.90B	-109.30B	-74.91B	-67.23B	-61.94B
Financing Cash Flow	-143.16B	-104.58B	-79.98B	-139.31B	-141.57B	-87.06B

Kao Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6265.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 Negative. The current price of 6265 is below the 20-day moving average (MA) of 6317.90, below the 50-day MA of 6395.10, and below the 200-day MA of 6455.79, indicating a bearish trend. The MACD of -52.21 indicates Negative momentum. The RSI at 43.30 is Neutral, neither overbought nor oversold. The STOCH value of 52.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4452.

Kao Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4912	76 Outperform	¥449.85B	15.62	9.77%	1.75%	2.18%	60.81%
4927	68 Neutral	¥294.90B	29.52	6.05%	3.90%	-1.16%	36.30%
4452	66 Neutral	¥2.92T	24.03	11.70%	2.44%	4.62%	47.68%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
8113	62 Neutral	¥1.63T	18.86	10.79%	3.48%	-1.56%	-1.15%
4922	57 Neutral	¥305.90B	40.88	2.72%	2.61%	1.37%	-5.60%
4911	49 Neutral	¥938.40B	-16.77	―	2.14%	-1.20%	-2896.72%

Kao Corporate Events

Kao Corporation Reports Strong Financial Performance for Nine Months Ending September 2025

Kao Corporation reported a 3.5% increase in net sales for the nine months ending September 30, 2025, with significant growth in operating income and net income, indicating a robust financial performance. The company maintained stable financial health with a slight decrease in total assets, and it plans to sustain its dividend payouts, reflecting confidence in its future earnings potential.