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KOSE Corp 4922

Morningstar Rating
JPY 8,300.00 +148.00 (1.82%)
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Company Report

Kose’s Prestige Skincare Strengths Untouched by Temporary Travel Retail and China Setback

Accelerating international growth, boosting unique product offerings, and expanding the business reach and customer base are three pillars of Kose’s growth strategies. The financial targets including JPY 500 billion in sales, 16% operating margin, and a 15% return on equity for the Vision 2026 midterm plan look challenging without acquisitions while uncertainties surrounding China present the greatest downside risk, in our view. Kose aims to raise overseas sales contribution to 50% from 43% and to generate at least 25% of sales from the e-commerce and travel retail channels by 2026.

Price vs Fair Value

4922 is trading at a 34% discount.
Price
JPY 7,968.00
Fair Value
JPY 18,654.00
Uncertainty
Medium
1-Star Price
JPY 38,893.00
5-Star Price
JPY 2,233.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Increasing polarization of consumer spending on cosmetics in Japan suggest demand for prestige cosmetics should stay resilient regardless of economic uncertainty.

Bears

Chinese consumers’ downtrading will cap sales growth, hindering margin expansion to the midteen level.

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Trading Information

Previous Close Price
JPY 8,152.00
Day Range
JPY 8,140.008,334.00
52-Week Range
JPY 7,391.0016,380.00
Bid/Ask
JPY 8,296.00 / JPY 8,327.00
Market Cap
JPY 473.58 Bil
Volume/Avg
283,200 / 523,497

Key Statistics

Price/Earnings (Normalized)
39.27
Price/Sales
1.55
Dividend Yield (Trailing)
1.72%
Dividend Yield (Forward)
1.72%
Total Yield
1.72%

Company Profile

Kose is the third-largest cosmetics company in Japan and the second in the premium segment, and is renowned for its prestige skincare brands including Decorte and Albion. The firm has been managed by the Kobayashi family since it was established in 1946. Albion, a fully consolidated subsidiary in which Kose holds a 79.5% stake, is operated independently by another branch of the Kobayashi family. The group, with a collection 37 brands/lines spanning a wide range of price points, has captured 13.6% of Japan’s premium beauty segment, according to Euromonitor. Japan remains the largest market contributing nearly 57% of sales, followed by Asia (28%) and North America (14%). Its distribution channels include department stores, specialty retailers, drugstores, travel retailers, and e-commerce.
Sector
Consumer Defensive
Industry
Household & Personal Products
Stock Style Box
Mid Growth
Total Number of Employees
12,816

Competitors

Valuation

Metric
4922
OR
4911
Price/Earnings (Normalized)
39.2734.3150.59
Price/Book Value
1.758.092.72
Price/Sales
1.555.731.73
Price/Cash Flow
21.0329.5120.97
Price/Earnings
4922
OR
4911

Financial Strength

Metric
4922
OR
4911
Quick Ratio
2.520.700.75
Current Ratio
3.661.101.28
Interest Coverage
1,671.0935.254.21
Quick Ratio
4922
OR
4911

Profitability

Metric
4922
OR
4911
Return on Assets (Normalized)
5.58%12.99%2.14%
Return on Equity (Normalized)
7.68%23.11%4.47%
Return on Invested Capital (Normalized)
6.68%17.20%3.01%
Return on Assets
4922
OR
4911
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