Kao (4452) 1Q results: Company expresses confidence in product supply stability from 2Q

Research evidence excerpt

Kao (4452) 1Q results: Company expresses confidence in product supply stability from 2Q

J P M O R G A N Asia Pacific Equity Research

12 May 2026

Kao (4452) Overweight

4452.T, 4452 JP

1Q results: Company expresses confidence in product Price (12 May 26):¥5,809

supply stability from 2Q Price Target (Dec-26):¥7,800

Slightly positive: In 1Q, operating profit of ¥44.9 billion beat our estimate of ¥34.2 Japan Equity Research

billion. However, this was within the range of our expectations when excluding the

Cosmetics and Personal Care /

land sale gains of ¥11.5 billion. Looking at the details, solid earnings in Japan and Paper and Packaging

the turnaround to health & beauty care sales growth in the US leave us with a AC Akiko Kuwahara

favorable impression. In contrast, the chemicals segment’s 1Q operating profit fell

(81-3) 6736-8617

far short of our estimate, which we see as a slight cause for concern. However, akiko.kuwahara@jpmorgan.com

management commented that Kao has secured inputs for 2026 and is able to meet JPMorgan Securities Japan Co., Ltd.

product supply requirements, so we think this will for now allay investors’

concerns regarding the risk of capacity utilization falling from 2Q.

• Summary of management team’s comments on key questions: (1) 1Q

operating profit progress: Profit made progress toward beating guidance even

when excluding the land sale gains. The global consumer care segment secured

1Q profit boosts of ¥5.5 billion from an improvement in earnings power and

¥2.0 billion from growth. The improvement in earnings power was broadly in

line with guidance, but Kao estimates an overshoot of about ¥1 billion due to

growth impact. The Middle East crisis and other factors are having an impact,

but management believes Kao can attain full-year earnings guidance.