KDDI Corp (9433) 4Q results: Positive impression of balance of growth investments and substantial shareholder returns

Research evidence excerpt

KDDI Corp (9433) 4Q results: Positive impression of balance of growth investments and substantial shareholder returns

JPMorgan Securities Japan Co., Ltd. Asia Pacific Equity Research

Matthew Henderson AC 13 May 2026 J P M O R G A N

(81-3) 6736-8831

matthew.henderson@jpmorgan.com

Investment Thesis, Valuation and Risks

KDDI Corp (9433) (Overweight; Price Target: ¥3,000)

Investment Thesis

KDDI is characterized by a more stable earnings portfolio than other telcos, its own business

ecosystem (including ponta and a bank), high shareholder payouts, and low leverage. We

expect the dividend yield to stay around 3% (and total shareholder return yield of at least

7%) and see leeway for further increases in shareholder returns. Key points to watch include

(1) the announcement of a new medium-term plan for FY2026 onward, (2) additional share

buybacks if cross-shareholdings with Kyocera are unwound, and (3) the creation of

businesses through an AI strategy.

Valuation

Our December 2026 price target of ¥3,000 is based on our FY2027 adjusted EBITDA

estimate of ¥1,983.4 billion and an EV/EBITDA multiple of 7.8x. Our target EV/EBITDA

is above KDDI’s past five-year average (around 6.0x), but we believe a premium over the

historical average is appropriate based on aggressive shareholder returns and leeway for

M&A given low financial leverage.

Risks to Rating and Price Target

Upside Scenario to Target Price/Rating

• Higher-than-expected ARPU growth

• Stronger-than-expected financial business demand leading to earnings growth

• Higher-than-expected shareholder returns, including share buybacks

Downside Scenario to Target Price/Rating

• Further fall in ARPU due to increased price competition

• Excessive spending for medium-term growth and/or M&A deals at unreasonable

valuations