KDDI Corp
TSE:9433
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Intrinsic Value
The intrinsic value of one KDDI Corp stock under the Base Case scenario is 8 191.37 JPY. Compared to the current market price of 5 030 JPY, KDDI Corp is Undervalued by 39%.
The Intrinsic Value is calculated as the average of DCF and Relative values:
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KDDI Corp
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Fundamental Analysis
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KDDI Corp
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KDDI Corp., a leading telecommunications and technology company based in Japan, is known for its innovative solutions and robust service offerings that connect millions of people across the globe. Originally established in 2000 through the merger of DDI Corp. and KDD Corp., KDDI has evolved into a key player in Japan's mobile phone market under its popular "au" brand, while also boasting a significant presence in fixed-line services, data centers, and cloud computing. Investors will appreciate KDDI's strategic focus on diversification and digital transformation, as the company embraces new technologies like 5G and IoT to expand its service portfolio and enhance customer experiences, position...
KDDI Corp., a leading telecommunications and technology company based in Japan, is known for its innovative solutions and robust service offerings that connect millions of people across the globe. Originally established in 2000 through the merger of DDI Corp. and KDD Corp., KDDI has evolved into a key player in Japan's mobile phone market under its popular "au" brand, while also boasting a significant presence in fixed-line services, data centers, and cloud computing. Investors will appreciate KDDI's strategic focus on diversification and digital transformation, as the company embraces new technologies like 5G and IoT to expand its service portfolio and enhance customer experiences, positioning itself favorably in an increasingly competitive landscape.
Beyond telecommunications, KDDI is championing the convergence of various sectors, exploring partnerships and investments in areas such as entertainment, finance, and energy. This forward-thinking approach aligns with global trends toward digital integration, making KDDI an attractive option for investors seeking long-term growth opportunities. The company’s commitment to sustainability and social responsibility further showcases its dedication to creating value not just for shareholders, but also for society at large. By fostering innovation and adaptability, KDDI is well-positioned to capitalize on emerging trends, turning challenges into opportunities while aiming to deliver consistent returns for its investors.
KDDI Corporation, a major Japanese telecommunications company, primarily operates in several core business segments. Here's a breakdown of these key areas:
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Mobile Communications:
- KDDI is known for its mobile telecommunications services under the au brand. This segment includes mobile voice, data services, and the provision of mobile devices. The company competes with other major carriers in Japan, offering various plans and smartphone options.
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Fixed-line Communications:
- This segment includes services for landline telephony, broadband internet (FTTH, or fiber-to-the-home), and other fixed communication services for both residential and business customers. KDDI has been expanding its fiber optic network to enhance service quality and reliability.
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Global Services:
- KDDI provides international telecommunications and IT services. This includes global connectivity solutions, cloud services, and data center operations aimed at businesses looking to operate internationally. KDDI has established a significant presence in the Asian telecommunications market.
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IoT (Internet of Things):
- The company is expanding into the IoT market, offering solutions that connect various devices for smart city applications, smart homes, and industrial IoT deployments. This segment focuses on enhancing connectivity and harnessing data from connected devices.
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Content and Media Services:
- KDDI also engages in digital content services, providing video streaming, music services, and other content delivery platforms. This includes partnerships with entertainment companies and the development of proprietary content.
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Financial Services:
- Through KDDI's subsidiaries, the company offers mobile payment services and other financial services, leveraging its customer base to expand into fintech and digital financial services.
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Corporate Solutions:
- KDDI provides various enterprise solutions, including cloud computing, cybersecurity, and IT consulting services to businesses, enhancing their operational efficiency through technology.
These segments allow KDDI to leverage its extensive telecommunications infrastructure and customer base, driving growth and diversification. The company continues to adapt to technological advancements and changing consumer preferences in the digital age.
KDDI Corporation, one of Japan's leading telecommunications operators, holds several unique competitive advantages over its rivals in the telecommunications sector. Here are some key factors:
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Wide Range of Services: KDDI offers a diverse portfolio of services, including mobile and fixed-line telecommunications, internet services, and digital content. The "au" brand for mobile services is particularly strong in Japan, allowing KDDI to capture a broad customer base.
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Strong Brand Loyalty: The company's established reputation and strong branding contribute to high customer loyalty. The longstanding presence and consistent quality of services help retain existing customers and attract new ones.
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Innovative Technology Investment: KDDI invests heavily in network infrastructure and emerging technologies, such as 5G and IoT. This commitment allows KDDI to stay ahead of competitors in terms of network quality, speed, and reliability.
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Partnerships and Alliances: KDDI has strategically partnered with various companies, including global tech firms and local businesses. These partnerships enhance its service offerings and expand its reach in different market segments.
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Robust Customer Experience: KDDI places a strong emphasis on customer service, offering comprehensive support and customer engagement initiatives. This focus helps differentiate its service from competitors and increases customer satisfaction.
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Financial Strength: KDDI has a solid financial position, providing it with the necessary capital to invest in technology, marketing, and customer acquisition strategies that may not be accessible to smaller competitors.
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Focus on Enterprise Solutions: KDDI's emphasis on providing enterprise telecommunications solutions, including cloud services and cybersecurity, creates a distinct competitive edge in the B2B space, targeting corporate clients and providing customized solutions.
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International Expansion: KDDI is actively seeking growth opportunities beyond Japan through international operations and acquisitions. This global approach diversifies revenue streams and reduces reliance on the domestic market.
By leveraging these competitive advantages, KDDI Corporation can maintain a strong position in the telecommunications industry and continue to thrive against its rivals.
KDDI Corp, a major telecommunications provider in Japan, faces several risks and challenges in the near future:
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Intense Competition: The telecom market in Japan is highly competitive, with key players like NTT Docomo and SoftBank. New entrants and alternative service providers also increase pressure on pricing and market share.
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Regulatory Changes: Changes in government regulations related to telecommunications, including pricing controls, privacy laws, and spectrum allocations, can impact KDDI's operations and profitability.
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Technological Advancements: Rapid advancements in technology require constant investment in infrastructure and innovation. Failure to keep up with shifts towards 5G, IoT, and digital services could lead to losing market relevance.
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Economic Conditions: Macroeconomic factors, such as inflation, rising interest rates, and economic slowdowns, can affect consumer spending and corporate investment in telecommunications services.
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Cybersecurity Threats: Increased reliance on digital services raises the risk of cyberattacks. A significant security breach could undermine customer trust and lead to financial liabilities.
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Customer Expectations: As consumer demands evolve, there’s growing pressure to provide higher-speed services and innovative digital solutions. Failing to meet these expectations can lead to churn.
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Global Supply Chain Issues: Disruptions in the global supply chain can affect the availability of technology and infrastructure needed for network upgrades and expansion.
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Sustainability Pressures: Increased scrutiny over environmental impacts means KDDI must invest in sustainable practices, which might involve substantial costs and operational changes.
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Market Maturity: The Japanese telecom market is relatively mature. Growth opportunities may be limited, leading to a reliance on finding new revenue streams through digital services or international expansion.
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Foreign Exchange Risks: If KDDI engages in international operations or investments, fluctuations in foreign exchange rates could impact financial performance.
By addressing these challenges proactively, KDDI can position itself for sustained growth and success in the ever-evolving telecommunications landscape.
Revenue & Expenses Breakdown
KDDI Corp
Balance Sheet Decomposition
KDDI Corp
Current Assets | 4.9T |
Cash & Short-Term Investments | 1.6T |
Receivables | 3T |
Other Current Assets | 294B |
Non-Current Assets | 10.7T |
Long-Term Investments | 1.5T |
PP&E | 3.2T |
Intangibles | 1.6T |
Other Non-Current Assets | 4.3T |
Current Liabilities | 7.2T |
Accounts Payable | 843.5B |
Short-Term Debt | 268.9B |
Other Current Liabilities | 6.1T |
Non-Current Liabilities | 3.1T |
Long-Term Debt | 2.1T |
Other Non-Current Liabilities | 1T |
Earnings Waterfall
KDDI Corp
Revenue
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5.8T
JPY
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Cost of Revenue
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-3.4T
JPY
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Gross Profit
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2.5T
JPY
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Operating Expenses
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-1.5T
JPY
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Operating Income
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958.7B
JPY
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Other Expenses
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-320.9B
JPY
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Net Income
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637.9B
JPY
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Free Cash Flow Analysis
KDDI Corp
JPY | |
Free Cash Flow | JPY |
KDDI’s first-half results for FY March 2025 show operating revenue of JPY 2,855.7 billion, up 2.8%, and operating income of JPY 573.1 billion, up 2.3%. Key growth areas include increasing ARPU, with UQ mobile achieving 7% growth. The DX Business Services segment saw operating income rise by 11.1%. As part of their strategic plan, KDDI aims for a targeted EPS increase of 1.5 times by March 2026, supported by new initiatives including partnerships with Lawson. Additionally, the company has authorized a JPY 100 billion share buyback, aiming for a total of JPY 400 billion for FY 2025.
What is Earnings Call?
Profitability Score
Profitability Due Diligence
KDDI Corp's profitability score is 55/100. The higher the profitability score, the more profitable the company is.
Score
KDDI Corp's profitability score is 55/100. The higher the profitability score, the more profitable the company is.
Solvency Score
Solvency Due Diligence
KDDI Corp's solvency score is 59/100. The higher the solvency score, the more solvent the company is.
Score
KDDI Corp's solvency score is 59/100. The higher the solvency score, the more solvent the company is.
Wall St
Price Targets
Price Targets Summary
KDDI Corp
According to Wall Street analysts, the average 1-year price target for KDDI Corp is 5 079.96 JPY with a low forecast of 3 767.3 JPY and a high forecast of 6 058.5 JPY.
Dividends
Current shareholder yield for KDDI Corp is .
Shareholder yield represents the total return a company provides to its shareholders, calculated as the sum of dividend yield, buyback yield, and debt paydown yield. What is shareholder yield?
Profile
Country
Industry
Market Cap
Dividend Yield
Description
KDDI Corp. engages in the telecommunications business. The company is headquartered in Chiyoda-Ku, Tokyo-To and currently employs 47,320 full-time employees. The firm operates in four segments. The Personal segment is engaged in the provision of communication services for personal and home, including au mobile phone, and fiber-to-the-home (FTTH) and cable television (CATV) services, among others. The Life Design segment provides commerce services, financial services, payment services, and content services such as video, music and information distribution. The Business segment offers various communication services, the sale of mobile handset, data center services and various Information and Communication Technology (ICT) solutions/cloud-based services to enterprise customers. The Global segment offers various communication services, data center services and various ICT solutions/Cloud-based services to to overseas customers. The firm also provides communication equipment maintenance service, as well as the research and development services of information communication.
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Employees
Officers
The intrinsic value of one KDDI Corp stock under the Base Case scenario is 8 191.37 JPY.
Compared to the current market price of 5 030 JPY, KDDI Corp is Undervalued by 39%.