HENNGE K.K. (4475) AI Stock Analysis

• Market Cap: ¥46.90B
• Dividend Yield: 0.28%
• Average Volume (3M): 505.68K
• Price to Earnings (P/E): 39.9
• Beta (1Y): 0.64
• Revenue Growth: 30.64%
• EPS Growth: 33.06%
• Country: JP
• Employees: 311
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 8.32
• Shares Outstanding: 32,500,600
• 10 Day Avg. Volume: 438,690
• 30 Day Avg. Volume: 505,683
• PEG Ratio: 0.72
• Price to Book (P/B): 12.55
• Price to Sales (P/S): 4.48
• P/FCF Ratio: 20.06
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 66 Neutral
• Price Target: ―

HENNGE K.K. demonstrates strong financial health with impressive revenue growth and a solid balance sheet, which contribute positively to its overall score. However, challenges in cash flow consistency and high valuation metrics, such as a high P/E ratio and low dividend yield, present risks. The technical analysis suggests some short-term price weaknesses, impacting the overall stock score.

HENNGE K.K. Business Overview & Revenue Model

Company Description

HENNGE K.K. provides cloud security services worldwide. The company offers HENNGE One, a cloud-based identity and access management solution that offers single sign-on. It also provides HENNGE Secure Browser, which enables users to securely access cloud services federated with HENNGE One using HENNGE One account; and HENNGE OTP Generator, a virtual device application for multi-factor authentication that generates time-based one-time passwords complying with RFC 6238. The company was formerly known as HDE, Inc. and changed its name to HENNGE K.K. in February 2019. HENNGE K.K. was founded in 1996 and is headquartered in Tokyo, Japan.

How the Company Makes Money

HENNGE K.K. generates revenue through a subscription-based model for its cloud security services. The company's primary revenue stream comes from the sale of subscriptions to HENNGE One, which provides secure access management, email security, and cloud data protection. Customers pay a recurring fee, typically on a monthly or annual basis, for access to the platform and its suite of security features. Additionally, HENNGE collaborates with various cloud service providers and technology partners to enhance its offerings, which can also contribute to its revenue through joint marketing efforts or bundled service packages.

HENNGE K.K. Financial Statement Overview

Summary

The company exhibits strong financial performance with robust revenue growth and profitability as highlighted by the income statement. The balance sheet is solid with no debt and substantial equity, indicating financial stability. However, the cash flow data shows concerning gaps, affecting consistency and transparency in cash generation.

Income Statement

The company demonstrates strong revenue growth with a TTM revenue of ¥8.96 billion, marking a significant increase from the previous annual revenue of ¥8.36 billion. Gross profit margin is robust at 84.5%, and net profit margin is healthy at 10.9%. The EBIT margin stands at 12.9%, and the EBITDA margin is 13.3%, indicating efficient cost management and operational effectiveness. Overall, the income statement reflects a positive growth trajectory with stable profitability.

Balance Sheet

The balance sheet highlights a solid financial position with no debt and substantial stockholders' equity totaling ¥3.31 billion. The equity ratio is strong at 40.0%, reflecting a well-capitalized structure. The company exhibits no financial leverage risks, which is a positive indicator of stability. The absence of debt enhances financial flexibility and reduces potential solvency risks.

Cash Flow

Cash flow metrics show a mixed picture. While operating cash flow was positive in prior periods, the TTM data shows zero values for cash flows, raising concerns about cash generation consistency. Historical free cash flow has shown growth, but the lack of current data limits analysis. Improving cash flow visibility and consistency will be crucial for enhancing overall financial health.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.81B	8.36B	6.78B	5.65B	4.84B	4.15B
Gross Profit	6.71B	7.04B	5.68B	4.77B	4.02B	3.42B
EBITDA	1.17B	1.05B	743.62M	501.42M	416.00M	587.89M
Net Income	755.09M	827.41M	508.83M	321.17M	223.84M	354.98M
Balance Sheet
Total Assets	10.30B	8.29B	6.29B	5.21B	4.49B	4.24B
Cash, Cash Equivalents and Short-Term Investments	7.03B	6.33B	4.59B	4.05B	3.39B	2.87B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	6.77B	5.30B	3.88B	3.11B	2.65B	2.42B
Stockholders Equity	3.54B	2.99B	2.42B	2.09B	1.84B	1.82B
Cash Flow
Free Cash Flow	328.11M	1.87B	1.14B	748.20M	505.20M	661.05M
Operating Cash Flow	349.51M	1.93B	1.23B	776.74M	526.93M	774.19M
Investing Cash Flow	-992.75M	-34.83M	-425.16M	-119.78M	-25.36M	-123.31M
Financing Cash Flow	-96.30M	-150.98M	-270.31M	-100.00K	17.83M	344.60M

HENNGE K.K. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1443.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4475, the sentiment is Negative. The current price of 1443 is below the 20-day moving average (MA) of 1613.22, below the 50-day MA of 1716.88, and below the 200-day MA of 1540.73, indicating a bearish trend. The MACD of -67.71 indicates Positive momentum. The RSI at 27.35 is Positive, neither overbought nor oversold. The STOCH value of 6.82 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4475.

HENNGE K.K. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4493	76 Outperform	¥19.72B	36.22	―	0.15%	28.56%	-13.56%
4417	75 Outperform	¥51.04B	47.67	―	0.80%	25.30%	28.37%
4475	66 Neutral	¥46.90B	39.88	―	0.28%	30.64%	33.06%
3915	64 Neutral	¥26.81B	25.34	―	―	17.93%	91.21%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

HENNGE K.K. Corporate Events

HENNGE K.K. Announces Change in Major Shareholder

HENNGE K.K. announced a change in its major shareholders as Yoshiki Nagatome, a Director and Executive Senior Vice President, sold a portion of his shares to TORECO, Inc. This transaction slightly altered the distribution of voting rights but does not affect the company’s management structure or performance.