花王公司总裁会议要点

Hisae Kawamoto * | Equity Analyst+81 3 5251 6159 | hisae.kawamoto@jefferies.comShogo Sawada * | Equity Analyst+81 3 5251 6117 | ssawada@jefferies.com Company DescriptionKao Corp.Kao Corp. is the domestic market share leader in toiletries. It stands out as a sales company with integrated manufacturing, from raw materialsto production. Also handles cosmetics (Sofina, Kanebo, and others). Aggressive expansion in Asia recently has resulted in sharp sales growth,especially for disposable diapers.Company Valuation/RisksKao Corp.Price Target of ¥7,350 based on FY12/25E EV/EBITDA of 12x, cross-checked using the company’s historical valuation and ROE-P/B correlation.Upside factors include 1) cosmetics top-line growth in Japan and China and 2) margin expansion in US and Europe CP business. Downside risksinclude 1) intense competition in Fabric and Home care with global peers and 2) further input cost inflation including palm oil.For Important Disclosure information on companies recommended in this report, please visit our website at https://javatar.bluematrix.com/sellside/Disclosures.action or call 212.284.2300.Analyst Certification:I, Hisae Kawamoto, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) andsubject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations orviews expressed in this research report.I, Shogo Sawada, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) andsubject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations orviews expressed in this research report.Registration of non-US analysts:Hisae Kawamoto is employed by Jefferies (Japan) Limited, a non-US affiliate of Jefferies LLC and is not registered/qualified as a research analyst with FINRA. This analyst(s) may not be an associated person of Jefferies LLC, a FINRA member firm, and therefore maynot be subject to the FINRA Rule 2241 and restrictions on communications with a subject company, public appearances and trading securities held bya research analyst.Registration of non-US analysts:Shogo Sawada is employed by Jefferies (Japan) Limited, a non-US affiliate of Jefferies LLC and is not registered/qualifiedas a research analyst with FINRA. This analyst(s) may not be an associated person of Jefferies LLC, a FINRA member firm, and therefore may not be subjectto the FINRA Rule 2241 and restrictions on communications with a subject company, public appearances and trading securities held by a research analyst.As is the case with all Jefferies employees, the analyst(s) responsible for the coverage of the financial instruments discussed in this report receivescompensation based in part on the overall performance of the firm, including investment banking income. We seek to update our research as appropriate,but various regulations may prevent us from doing so. Aside from certain industry reports published on a periodic basis, the large majority of reports arepublished at irregular intervals as appropriate in the analyst's judgement.Investment Recommendation Record(Article 3(1)e and Article 7 of MAR)Recommendation PublishedRecommendation DistributedFor Important Disclosure information on companies recommended in this report, please visit our website at https://javatar.bluematrix.com/sellside/Disclosures.action or call 212.284.2300.Explanation of Jefferies RatingsBuy - Describes securities that we expect to provide a total return (price appreciation plus yield) of 15% or more within a 12-month period.Hold - Describes securities that we expect to provide a total return (price appreciation plus yield) of plus 15% or minus 10% within a 12-month period.Underperform - Describes securities that we expect to provide a total return (price appreciation plus yield) of minus 10% or less within a 12-month period.The expected total return (price appreciation plus yield) for Buy rated securities with an average security price consistently below $10 is 20% or more withina 12-month period as these companies are typically more volatile than the overall stock market. For Hold rated securities with an average security priceconsistently below $10, the expected total return (price appreciation plus yield) is plus or minus 20% within a 12-month period. For Underperform ratedsecurities with an average security price consistently below $10, the expected total return (price appreciation plus yield) is minus 20% or less within a 12-month period.NR - The investment rating and price target have been temporarily suspended. Such suspensions are in compliance with applicable regulations and/orJefferies policies.CS - Coverage Suspended. Jefferies has suspended coverage of this company.Please see important disclosure information on pages 2 - 7