HENNGE K.K. (4475) AI Stock Analysis

• Market Cap: ¥40.33B
• Dividend Yield: 0.39%
• Average Volume (3M): 546.35K
• Price to Earnings (P/E): 29.3
• Beta (1Y): 0.52
• Revenue Growth: 30.59%
• EPS Growth: 65.14%
• Country: JP
• Employees: 311
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 9.45
• Shares Outstanding: 32,500,600
• 10 Day Avg. Volume: 584,820
• 30 Day Avg. Volume: 546,350
• PEG Ratio: 0.58
• Price to Book (P/B): 13.26
• Price to Sales (P/S): 4.72
• P/FCF Ratio: 19.12
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: ¥1,428.00 ▲(9.34% Upside)

The score is driven primarily by strong financial performance (high margins, improving profitability, low leverage, and solid cash generation). This is tempered by weaker technical conditions (below key moving averages and negative MACD) and a relatively premium valuation (P/E 30.8) despite a modest dividend yield.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and successful product adoption, supporting long-term business expansion.

Margin Sustainability

High and improving margins reflect efficient operations and pricing power, enhancing long-term profitability and competitiveness.

Cash Generation Ability

Strong cash generation supports reinvestment in growth opportunities and provides financial stability, underpinning future expansion.

Negative Factors

Uneven Growth Cadence

Variability in growth rates may indicate challenges in sustaining consistent demand, potentially impacting long-term planning and stability.

Moderate Operating Cash Flow

Moderate cash flow relative to revenue suggests ongoing cash needs, which could limit flexibility in scaling operations or investing in new initiatives.

Introduction of Debt

Introducing debt, even if small, marks a shift from a debt-free stance, potentially increasing financial risk and affecting capital allocation.

HENNGE K.K. Business Overview & Revenue Model

Company Description

HENNGE K.K. provides cloud security services worldwide. The company offers HENNGE One, a cloud-based identity and access management solution that offers single sign-on. It also provides HENNGE Secure Browser, which enables users to securely access cloud services federated with HENNGE One using HENNGE One account; and HENNGE OTP Generator, a virtual device application for multi-factor authentication that generates time-based one-time passwords complying with RFC 6238. The company was formerly known as HDE, Inc. and changed its name to HENNGE K.K. in February 2019. HENNGE K.K. was founded in 1996 and is headquartered in Tokyo, Japan.

How the Company Makes Money

HENNGE K.K. generates revenue through a subscription-based model for its cloud security services. The company's primary revenue stream comes from the sale of subscriptions to HENNGE One, which provides secure access management, email security, and cloud data protection. Customers pay a recurring fee, typically on a monthly or annual basis, for access to the platform and its suite of security features. Additionally, HENNGE collaborates with various cloud service providers and technology partners to enhance its offerings, which can also contribute to its revenue through joint marketing efforts or bundled service packages.

HENNGE K.K. Financial Statement Overview

Summary

The company exhibits strong financial performance with robust revenue growth and profitability as highlighted by the income statement. The balance sheet is solid with no debt and substantial equity, indicating financial stability. However, the cash flow data shows concerning gaps, affecting consistency and transparency in cash generation.

Income Statement

The company demonstrates strong revenue growth with a TTM revenue of ¥8.96 billion, marking a significant increase from the previous annual revenue of ¥8.36 billion. Gross profit margin is robust at 84.5%, and net profit margin is healthy at 10.9%. The EBIT margin stands at 12.9%, and the EBITDA margin is 13.3%, indicating efficient cost management and operational effectiveness. Overall, the income statement reflects a positive growth trajectory with stable profitability.

Balance Sheet

The balance sheet highlights a solid financial position with no debt and substantial stockholders' equity totaling ¥3.31 billion. The equity ratio is strong at 40.0%, reflecting a well-capitalized structure. The company exhibits no financial leverage risks, which is a positive indicator of stability. The absence of debt enhances financial flexibility and reduces potential solvency risks.

Cash Flow

Cash flow metrics show a mixed picture. While operating cash flow was positive in prior periods, the TTM data shows zero values for cash flows, raising concerns about cash generation consistency. Historical free cash flow has shown growth, but the lack of current data limits analysis. Improving cash flow visibility and consistency will be crucial for enhancing overall financial health.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	10.32B	10.92B	8.36B	6.78B	5.65B	4.84B
Gross Profit	8.85B	9.45B	7.04B	5.68B	4.77B	4.02B
EBITDA	1.78B	1.93B	1.05B	743.62M	501.42M	416.00M
Net Income	1.16B	1.36B	827.41M	508.83M	321.17M	223.84M
Balance Sheet
Total Assets	10.30B	10.74B	8.29B	6.29B	5.21B	4.49B
Cash, Cash Equivalents and Short-Term Investments	7.03B	7.32B	6.33B	4.59B	4.05B	3.39B
Total Debt	0.00	148.15M	0.00	0.00	0.00	0.00
Total Liabilities	6.77B	6.90B	5.30B	3.88B	3.11B	2.65B
Stockholders Equity	3.54B	3.89B	2.99B	2.42B	2.09B	1.84B
Cash Flow
Free Cash Flow	328.11M	2.70B	1.87B	1.14B	748.20M	505.20M
Operating Cash Flow	349.51M	2.73B	1.93B	1.23B	776.74M	526.93M
Investing Cash Flow	-992.75M	-1.34B	-34.83M	-425.16M	-119.78M	-25.36M
Financing Cash Flow	-96.30M	-417.51M	-150.98M	-270.31M	-100.00K	17.83M

HENNGE K.K. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1306.00
• 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:4475, the sentiment is Negative. The current price of 1306 is above the 20-day moving average (MA) of 1285.05, below the 50-day MA of 1331.06, and below the 200-day MA of 1550.26, indicating a bearish trend. The MACD of -17.84 indicates Negative momentum. The RSI at 37.41 is Neutral, neither overbought nor oversold. The STOCH value of 26.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4475.

HENNGE K.K. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4493	78 Outperform	¥18.27B	26.51	―	0.17%	31.39%	13.12%
4475	69 Neutral	¥40.33B	29.27	―	0.39%	30.59%	65.14%
3915	68 Neutral	¥27.93B	26.40	―	―	17.93%	91.21%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4434	61 Neutral	¥15.16B	-24.96	―	―	―	―
4417	60 Neutral	¥49.13B	41.15	―	0.90%	25.06%	37.24%

HENNGE K.K. Corporate Events

HENNGE to Grant ¥22 Million in Restricted Stock to Directors as Part of Long-Term Incentive Plan

HENNGE K.K. has approved the disposal of 17,700 treasury shares as restricted stock remuneration for nine directors, including outside directors and Audit and Supervisory Committee members, with a total value of ¥22.4 million at a disposal price aligned with the latest market close on the Tokyo Stock Exchange. The move is part of a previously approved long-term equity compensation plan designed to more closely link director pay with shareholder value and share price performance, using multi-year transfer restrictions to promote retention and sustained contribution to corporate value, while signaling continued use of stock-based incentives in the company’s governance and compensation framework.

HENNGE Completes Treasury Share Buyback Totaling 700,000 Shares

HENNGE K.K. has completed a share buyback program authorized by its board on November 21, 2025, acquiring 580,000 shares of its common stock for approximately ¥751 million between December 1 and December 19, 2025. Cumulatively under the broader authorization, the company has repurchased 700,000 shares for about ¥910 million, using market purchases on the Tokyo Stock Exchange, a move that is likely aimed at enhancing shareholder value, optimizing capital structure, and signaling management’s confidence in the company’s prospects to investors.

HENNGE K.K. Announces Treasury Share Acquisition to Enhance Corporate Value

HENNGE K.K. has announced its decision to acquire up to 700,000 treasury shares, representing a maximum of 2.2% of its total outstanding shares, as part of its strategy to enhance corporate value by balancing profit growth and capital efficiency. This move is aimed at preventing share dilution and supporting strategic initiatives such as stock compensation plans and potential mergers or alliances, leveraging the company’s strong financial position with no current debt.

HENNGE K.K. Announces Change in Major Shareholder

HENNGE K.K. announced a change in its major shareholders as Yoshiki Nagatome, a key shareholder and Executive Senior Vice President, sold a portion of his shares to TORECO, Inc., an asset management firm. This transaction slightly reduces Nagatome’s voting rights but does not affect the company’s management structure or performance.

HENNGE K.K. Increases Dividend Amid Strong Financial Performance

HENNGE K.K. announced an increase in its dividend distribution from retained earnings, with a new dividend of JPY 5.00 per share, up from the previously forecasted JPY 4.00. This decision reflects the company’s commitment to maximizing shareholder value and its confidence in maintaining stable financial performance, indicating a positive outlook for stakeholders.

HENNGE K.K. Reports Robust Financial Growth for FY 2025

HENNGE K.K. reported significant financial growth for the fiscal year ended September 30, 2025, with net sales increasing by 30.6% and operating profit rising by 76.7% compared to the previous year. The company’s strong financial performance highlights its robust market positioning and potential positive implications for stakeholders, indicating a successful trajectory in its operations.

HENNGE K.K. Prepares for Tokyo Stock Exchange Prime Market Application

HENNGE K.K. has announced its Board of Directors’ decision to prepare for an application to move from the Tokyo Stock Exchange Growth Market to the Prime Market. This strategic move is intended to support the company’s long-term growth, strengthen its brand, and improve its governance structure. However, the application process is still in the early stages, with no set dates for application or approval, and there are uncertainties regarding meeting the necessary requirements.

HENNGE K.K. Announces Change in Major Shareholder

HENNGE K.K. announced a change in its major shareholders due to the acquisition of treasury shares and a transfer in shareholding by a major stakeholder, Yoshiki Nagatome, who is also a Director and Executive Senior Vice President of the company. This change, confirmed through the shareholders register as of September 30, 2025, slightly adjusted the voting rights ratio but does not impact the company’s management structure or performance.