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KDDI Corporation (JP:9433)
:9433
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KDDI
(OTC:9433)
76Outperform
Positive Factors
Financial Performance
9.3% YoY increase in EPS helped by ¥400b buyback.
Investor Returns
KDDI investors get approximately 7% in returns.
Revenue Growth
Business Services segment continued double digits YoY growth.
Negative Factors
Net Profit
There was a 9% YoY decline in NP.
Sector Growth
Japan telcos in general are an ex-growth sector.
KDDI (9433) vs. S&P 500 (SPY)
Market Cap
$10.24T
Dividend Yield2.43%
Average Volume (3M)8.86M
Price to Earnings (P/E)16.7
Beta (1Y)0.52
Revenue Growth1.71%
EPS Growth-4.87%
CountryJP
Employees61,288
SectorCommunication Services
Sector Strength85
IndustryTelecommunications Services
Share Statistics
EPS (TTM)46.16
Shares Outstanding4,383,693,000
10 Day Avg. Volume6,659,360
30 Day Avg. Volume8,857,983
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$4,149.62Price Target Upside57.18% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
KDDI Business Overview & Revenue Model
Company DescriptionKDDI Corporation provides telecommunications services in Japan and internationally. It operates in two segments, Personal Services and Business Services. The Personal Services segment offers smartphone, mobile phone, and other mobile communication services, as well as fixed-line services under the au Hikari brand; MVNO services; mobile services under the au brand; and voice communications, data transmission, FTTH services, and CATV services. It also provides smartphone-centric payment, financial, and other services through au PAY gateway; au HOME, an IoT service that watches over pets using sensors and cameras; au Denki to conserve energy usage; AEON, an English conversation school. The Business Services segment offers data center services to corporate customers under the TELEHOUSE brand; and various solutions for network and cloud services, smartphones, and other devices. It is also involved in the provision of broadcasting, wireless broadband, mail order, IT support, call center, and temporary personnel services; and design, construction, maintenance, and operation support for communication equipment and submarine cable. The company was founded in 1953 and is headquartered in Tokyo, Japan.
How the Company Makes MoneyKDDI makes money primarily through its telecommunications services, which include mobile phone services, fixed-line communications, and internet services. The largest revenue stream is from mobile communications, where KDDI provides both voice and data services. The company also generates revenue from its fixed-line and internet services, catering to both residential and business clients. Additionally, KDDI offers solution services for enterprises, which contribute to its revenue by providing IT solutions, data center services, and cloud services. Significant partnerships with global and local technology companies enhance its service offerings and customer reach, further supporting its revenue growth.
KDDI Financial Statement Overview
Summary
KDDI displays solid financial health with strong profitability margins and steady revenue growth. The balance sheet is well-managed with prudent leverage, and cash flow remains robust despite recent declines in free cash flow growth.Income Statement
KDDI's income statement shows solid profitability with a stable gross profit margin and net profit margin over recent periods. The TTM data indicates a positive revenue growth rate of 1.72% compared to the previous year, suggesting consistent performance. The EBIT margin of 16.58% and EBITDA margin of 24.64% demonstrate strong operational efficiency.―
Balance Sheet
The balance sheet reflects a stable financial position with a reasonable debt-to-equity ratio of 0.82, indicating a balanced approach to leverage. The equity ratio stands at 31.54%, showing a healthy proportion of assets financed by equity. The return on equity (ROE) is robust at 12.23%, highlighting effective use of shareholder funds.75
Cash Flow
KDDI's cash flow statements reveal positive trends with a healthy operating cash flow to net income ratio of 2.13 in the TTM period, indicating efficient cash generation from operations. The free cash flow growth rate is slightly negative at -8.15% in the TTM period, partly due to increased capital expenditures. However, the free cash flow to net income ratio remains strong at 1.40, reflecting good cash conversion.―
| Breakdown | ||||
| Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 5.75T | 5.67T | 5.45T | 5.31T | 5.24T | Gross Profit |
| 2.43T | 2.41T | 2.46T | 2.38T | 2.31T | EBIT |
| 926.85B | 1.08T | 1.06T | 1.04T | 1.03T | EBITDA |
| 1.68T | 1.71T | 1.78T | 1.77T | 1.72T | Net Income Common Stockholders |
| 637.87B | 679.11B | 672.49B | 651.50B | 639.77B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 907.73B | 844.97B | 1.12T | 1.11T | 639.16B | Total Assets |
| 14.15T | 11.92T | 11.08T | 10.54T | 9.58T | Total Debt |
| 2.43T | 1.65T | 1.74T | 1.76T | 1.75T | Net Debt |
| 1.55T | 1.17T | 944.84B | 951.49B | 1.38T | Total Liabilities |
| 8.35T | 6.25T | 5.57T | 5.28T | 4.72T | Stockholders Equity |
| 5.25T | 5.12T | 4.98T | 4.76T | 4.38T |
| Cash Flow | Free Cash Flow | |||
| 956.97B | 444.74B | 793.08B | 1.06T | 704.05B | Operating Cash Flow |
| 1.71T | 1.08T | 1.47T | 1.68T | 1.32T | Investing Cash Flow |
| -832.43B | -732.48B | -761.59B | -658.92B | -610.95B | Financing Cash Flow |
| -476.48B | -669.84B | -727.26B | -585.57B | -546.38B |
KDDI Technical Analysis
Positive
2640.00
Price Trends
2437.70
Positive
2441.27
Positive
2381.61
Positive
Market Momentum
48.65
Negative
66.40
Neutral
84.25
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9433, the sentiment is Positive. The current price of 2640 is above the 20-day moving average (MA) of 2526.18, above the 50-day MA of 2437.70, and above the 200-day MA of 2381.61, indicating a bullish trend. The MACD of 48.65 indicates Negative momentum. The RSI at 66.40 is Neutral, neither overbought nor oversold. The STOCH value of 84.25 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:9433.
KDDI Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Performance Comparison
JP:9433
KDDI
2,640.00
548.93
26.25%
FJTSF
Fujitsu
22.47
7.56
50.70%
MBFJF
Mitsubishi UFJ Financial Group
12.27
2.31
23.19%
NPPXF
Nippon Telegraph and Telephone
1.16
0.15
14.85%
SFTBF
SoftBank Group
50.10
-0.29
-0.58%
JP:9434
SoftBank Corp.
221.50
34.19
18.25%
KDDI Earnings Call Summary
Earnings Call Date:Feb 05, 2025
(Q3-2025)
| % Change Since: 3.20%|
Next Earnings Date:Jul 25, 2025
Earnings Call Sentiment Positive
The earnings call reflects a generally positive outlook with steady growth in revenue and income, successful new plans, and strong collaborations, particularly with Lawson. However, challenges persist in terms of churn rates, specific revenue declines, and slower than expected growth in certain segments such as DX and BPO services.Q3-2025 Updates
Positive Updates
Steady Revenue Growth
Operating revenue for the third quarter was ¥4,364.2 billion, up 2.3% year-on-year, with a progress ratio of 75.6% versus the full year forecast.
Increased Operating Income
Operating income was ¥864.6 billion, up 2.0% year-on-year, with a progress ratio of 77.9%.
Growth in Personal Services
Total ARPU revenues increased steadily, with communications ARPU revenues up ¥3.5 billion year-on-year and value-added ARPU revenues up ¥27.9 billion year-on-year.
Successful New Pricing Plans
Introduction of competitive new plans such as Komikomi Plan+ and Money Activity Plan+ recovered momentum in monthly net additions of multi-brand IDs since November.
Strong Collaboration with Lawson
Ponta Pass acquisitions increased by about 20% quarter-on-quarter since launch in October, contributing to Lawson's daily sales increase by 3.4% year-on-year.
Investment in AI and DX
Decided to introduce NVIDIA's latest GPU to meet growing demand, furthering AI service preparations and accelerating customers' digitalization through WAKON-CROSS.
Negative Updates
Increased Churn Rate
Despite steady smartphone subscription growth, intensified competition led to an increased multi-brand churn rate, although au churn rate remained low.
Decline in Rakuten Roaming Revenue
Group MVNO and Rakuten roaming revenues were down ¥12.2 billion year-on-year.
Challenges in Business Services Segment
The DX market faced sluggish growth, and BPO services declined partly due to rapid digitalization and AI impact.
Energy and Financial Business Constraints
While showing growth, the financial and energy businesses faced limitations in scaling as quickly as anticipated.
Company Guidance
In the call, KDDI provided guidance for its financial performance in the third quarter of the fiscal year ending March 2025. The company reported consolidated operating revenue of ¥4,364.2 billion, reflecting a 2.3% year-on-year increase, with a progress ratio of 75.6% against the full-year forecast. Operating income rose by 2.0% year-on-year to ¥864.6 billion, achieving a 77.9% progress ratio. Net income, excluding temporary impacts from subsidiary reorganizations, increased by 0.6% year-on-year, with a progress ratio of 77.8%. Key factors for the growth in operating income included steady increases in communications ARPU revenues and strong performances in finance, energy, and DX businesses, as well as Lawson's contributions. Specifically, communications ARPU revenues grew by ¥3.5 billion year-on-year, financial and energy businesses combined contributed an additional ¥12.6 billion, and Lawson's equity method accounted income was up by ¥18.2 billion. The company also noted a positive trajectory for its multi-brand ID monthly net additions since November, driven by new pricing plans such as the Komikomi Plan+ and Money Activity Plan+.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.