Kao (4452.T): Q2 results: Positive. Despite effective guidance cuts, profit up YoY in all major segments

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05 Aug 2026 06:09:46 ET │ 10 pages

Kao (4452.T)

Q2 results: Positive. Despite effective guidance cuts, profit up YoY in all

major segments

CITI'S TAKE

Buy

Price (05 Aug 26 15:30)

¥3,188.0

Target price

¥3,600.0

Expected share price return

12.9%

Expected dividend yield

2.4%

Expected total return

15.4%

Market Cap

¥2,883,983M

US$18,283M

Q2 OP was ¥50.9bn (+33% YoY), significantly exceeding consensus of

¥42.1bn and our forecast of ¥45.2bn. Chemical OP, which fell over 50%

YoY in Q1, doubled YoY in Q2 as price pass-throughs of higher raw

material costs progressed, resulting in +20% YoY OP growth for H1.

Management raised full-year OP guidance from ¥182.0bn to ¥190.0bn

(+¥8.0bn), in line with our forecast and slightly above consensus.

However, since Q1 included one-time gains of ¥11.5bn, this effectively

represents a downward revision. Still, guidance incorporates the impact of

rising raw material costs from deteriorating Middle East conditions. At the

briefing, management expressed strong expectations for growth in the

chemical business's semiconductor-related field and the cosmetics

business.

Hiroki WatanabeAC

Implications — Kao shares have tracked TOPIX over the past month, but Q2 results

leave a positive impression, as they dispel market concerns about rising raw material

costs from higher oil prices and chemical business profitability. Additionally, Kao

provided further details on its chemical business products, including cleaning

agents used in semiconductor manufacturing front-end and back-end processes.

While disclosure for this business has been extremely limited until now,

management explained the business accounts for over 20% of chemical business

OP, which we estimate represents about 6% of consolidated OP. Market interest in

this business looks likely to increase further.

Consol.

12/24A

Sales

OP

RP

NP

EPS

PE

¥M

YOY (%)

¥M

YOY (%)

OPM(%)

¥M

YOY (%)

¥M

YOY (%)

X

1,628,448

6.3

146,644

144.3

9.0

151,024

136.6

107,767

145.7

116

27.5

24.5

12/25A

1,688,633

3.7

164,069

11.9

9.7

169,846

12.5

120,081

11.4

130

12/26CE

1,750,000

3.6

182,000

10.9

10.4

185,000

8.9

130,000

8.3

144

22.2

12/26E

1,784,470

5.7

190,780

16.3

10.7

196,449

15.7

138,253

15.1

154

20.6

…