HENNGE K.K. (4475) AI Stock Analysis

• Market Cap: ¥47.29B
• Dividend Yield: 0.21%
• Average Volume (3M): 1.02M
• Price to Earnings (P/E): 39.1
• Beta (1Y): 0.57
• Revenue Growth: 25.42%
• EPS Growth: 36.27%
• Country: JP
• Employees: 311
• Sector: Technology
• Sector Strength: 76
• Industry: Software - Infrastructure
• EPS (TTM): 12.00
• Shares Outstanding: 32,500,600
• 10 Day Avg. Volume: 1,890,220
• 30 Day Avg. Volume: 1,021,913
• PEG Ratio: 2.74
• Price to Book (P/B): 14.71
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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

• Rating: 66 Neutral
• Price Target: ―

HENNGE K.K. demonstrates strong financial health with impressive revenue growth and a solid balance sheet, which contribute positively to its overall score. However, challenges in cash flow consistency and high valuation metrics, such as a high P/E ratio and low dividend yield, present risks. The technical analysis suggests some short-term price weaknesses, impacting the overall stock score.

HENNGE K.K. Business Overview & Revenue Model

Company Description

HENNGE K.K. is a Japanese technology company specializing in cloud security solutions. It primarily operates in the software-as-a-service (SaaS) sector, offering services that ensure secure cloud adoption for enterprises. The company's flagship product, HENNGE One, is a comprehensive cloud security service that provides secure access and identity management solutions to protect corporate data and improve business efficiency.

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	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
8.96B	8.36B	6.78B	5.65B	4.84B	4.15B
	Gross Profit
7.57B	7.04B	5.68B	4.77B	4.02B	3.42B
	EBIT
1.16B	1.01B	707.68M	462.30M	380.10M	538.65M
	EBITDA
1.19B	1.05B	743.62M	501.42M	416.80M	540.30M
	Net Income Common Stockholders
977.02M	827.41M	508.83M	321.17M	223.84M	354.98M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
5.50B	6.33B	4.59B	4.05B	3.39B	2.87B
	Total Assets
8.27B	8.29B	6.29B	5.21B	4.49B	4.24B
	Total Debt
0.00	0.00	0.00	0.00	0.00	0.00
	Net Debt
-5.50B	-6.33B	-4.59B	-4.05B	-3.39B	-2.87B
	Total Liabilities
4.96B	5.30B	3.88B	3.11B	2.65B	2.42B
	Stockholders Equity
3.31B	2.99B	2.42B	2.09B	1.84B	1.82B
Cash Flow		Free Cash Flow
0.00	1.87B	1.14B	748.20M	505.20M	661.05M
	Operating Cash Flow
0.00	1.93B	1.23B	776.74M	526.93M	774.19M
	Investing Cash Flow
0.00	-34.83M	-425.16M	-119.78M	-25.36M	-123.31M
	Financing Cash Flow
0.00	-150.98M	-270.31M	-100.00K	17.83M	344.60M

HENNGE K.K. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1455.00
• 50DMA: Negative
• 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:4475, the sentiment is Neutral. The current price of 1455 is below the 20-day moving average (MA) of 1600.00, below the 50-day MA of 1518.62, and above the 200-day MA of 1291.48, indicating a neutral trend. The MACD of -20.48 indicates Positive momentum. The RSI at 38.64 is Neutral, neither overbought nor oversold. The STOCH value of 5.56 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4475.

HENNGE K.K. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3996	73 Outperform	¥4.53B	17.06		―	3.20%	99.70%
4475	66 Neutral	¥47.29B	39.06		0.21%	25.42%	36.27%
Sector *	60 Neutral	$11.56B	10.24	-7.04%	2.94%	7.46%	-10.54%
3681	48 Neutral	¥4.48B	―	-144.02%	―	-7.16%	71.43%
4436	46 Neutral	¥7.88B	―		5.38%	1.32%	-357.04%

HENNGE K.K. Corporate Events

HENNGE K.K. Announces Change in Major Shareholder

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