2025-06-02-Jefferies-狮王（4912）_利润率提升的理由_14页_1mb

Japan Cosmetics, Household & Personal Care Equity Research: Lion Summary

Key Findings

• Financial Performance: Lion reported a 5.1% YoY sales growth in 2024, with an EBIT of ¥26.3 billion for the year. The company projects a 19.7% EBIT increase in FY12/25E to ¥31.5 billion, driven by cost containment and oral care product growth.
• Margin Improvement: Significant efforts are focused on reducing advertising expenses (including a ¥1bn reduction in FY1Q), which is expected to contribute to higher profitability. The company's A&P costs have a high exposure in Japan, offering room for further curtailment.
• Valuation: The 12-month price target is ¥2,100 (P/E 23x), valuing Lion at 8x EV/EBITDA. The current share price is at the historical low end, presenting a potential upside.
• Risks: Key downside risks include escalating raw material costs (especially palm oil), competition in fabric care and home care markets, and potential product recalls.

Investment Thesis

• Upside Factors: Revenue growth in Japan and China, margin expansion in US oral care, and strategic acquisitions like the Vietnamese eye care business.
• Catalysts: Continued cost reduction in advertising, market recovery in Q2, and potential shareholder return initiatives (dividends, buybacks).

Long-Term Outlook

• Sustainability: Lion targets CO2 reductions and sustainable resource usage by 2030.
• Sector Shift: Focus on high-value pharmaceuticals and oral care products to drive profit growth.

Risks

• Downside: Increased input costs, intense competition, and regulatory or consumer response to sustainability initiatives.

Recommendations

• Buy Rating: Jefferies maintains a Buy recommendation based on positive growth prospects and margin improvements.
• Price Target: ¥2,100 for FY12/25E (8x EV/EBITDA, 23x P/E).