Skip to Content


Rating as of

Morningstar’s Analysis

Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price


5-Star Price


Economic Moat


Capital Allocation


KDDI Relying on New Service Growth To Offset Mobile Price Declines; Lift FVE to JPY 4,100

Dan Baker Senior Equity Analyst

Analyst Note

| Dan Baker |

Narrow-moat KDDI’s fiscal 2020 result (year ending March 2021) was broadly in line with our estimates. Revenue increased 1.4% year over year, with operating income up 1.2% and net profit up 1.8%, all slightly ahead of the flat guidance for all three lines. This was despite the energy business incurring a JPY 20.5 billion operating profit loss due to extreme volatility in wholesale energy prices in December and January. Basic telecom operating profit fell by JPY 41 billion, more than offsetting the JPY 58 billion operating income increase from growth fields, particularly the financial business, which added JPY 19 billion. We increase our forecasts slightly and our fair value estimate for KDDI to JPY 4,100 from JPY 4,000, and to USD 20 per ADR from USD 19 per ADR. At this fair value, KDDI would trade on a price/earnings ratio of 13.7 times with a 3.1% dividend yield.

Read Full Analysis

Company Profile

Business Description

KDDI is Japan's second-largest wireless operator (31% market share), the largest pay-TV operator (53% market share) and the second-largest provider of fibre-to-the-home broadband (12% market share). It has grown through acquisition and is focusing on increasing the number of customers who subscribe to more than one telecommunication service. It is also looking to grow its Life Design business which includes commerce, energy, and finance and had over 18 million IOT connections by the end of March 2021.

Garden Air Tower, 10-10, Iidabashi 3-chome
Tokyo, 102-8460, Japan
T +81 333470077
Sector Communication Services
Industry Telecom Services
Most Recent Earnings Mar 31, 2021
Fiscal Year End Mar 31, 2020
Stock Type
Employees 82,560

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.