2025-06-03-Jefferies-花王公司（4452）_总裁会议要点_7页_104kb

Kao Corp. Equity Research Summary

• Equity Research from Jefferies, dated June 3, 2025, carries a "Buy" rating with a price target of ¥7,350, reflecting confidence in the company's prospects.

• President's Meeting Insights: Kao President Hasebe presented a strategy focused on global competition and ROIC improvement, aiming to exceed P&G, L'Oreal, and Colgate-Palmolive by 2030. He expressed strong confidence that FY25 operating income will surpass 160 billion yen, matching or exceeding current market consensus. Analyses show potential upside due to digital AI enhancing customer engagement in beauty care and favorable retail dynamics.

• Beauty Care Strategy: Emphasis on digital AI to manage customer switching and improve brand stability in healthcare products, targeting areas like pain management and cosmetics gains.

• Retail Dynamics: Kao benefits from drugstore consolidation, with strong retailer relationships such as Seven & i or Tsuruha, ensuring market share gains in Japan amid the shift to private brands and national chains.

• Competitive Environment: No significant threat from P&G due to deep Japanese market knowledge and existing licenses (e.g., with MUJI for product manufacturing). Kao views global expansion focusing on Asia.

• Company Overview: Kao is the domestic leader in toiletries with integrated raw material to production capabilities, handling cosmetics brands and driving sales growth through aggressive Asian expansion and strong profitability.

• Valuation and Risks: Recommended price target set at ¥7,350 based on valuation metrics like EV/EBITDA. Upside drivers include growth in Japan and China for beauty care, offset by risks such as competition in home care and rising input costs (e.g., palm oil), as well as global economic factors.