Ajisen 538

Re: Ajisen 538

Postby winston » Fri Mar 23, 2012 6:21 am

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Ajisen (China) Holdings - which runs a restaurant chain and produces packaged noodles - said the impact from safety concerns over its products dented business.

In the first two months, comparable store sales recorded double- digit negative growth. Net profit tumbled by 21.8 percent to HK$350 million.

Ajisen will open 100 restaurants in China and Hong Kong, adding to the 662 it operated at the end of last year.

Shares of Ajisen fell 2.4 percent.


Source: The Standard HK
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Re: Ajisen 538

Postby winston » Mon Apr 09, 2012 8:10 pm

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AJISEN (CHINA) (00538) maintained at Sell, TP HKD8 by UBS
2012-03-23

UBS reported on AJISEN (CHINA) (00538) stating its Sell rating and target HKD8 with the following details:

Net profit came in at HK$350m, down 22% YoY, and 16% ahead of UBSe, mainly due to the swing of fair value adjustment on properties from –HK$14m in 2010 to HK$32m, Ajisen declared a final/special DPS of HK$0.023/0.098.

Including the interim DPS of HK$0.06, total DPS comes in at HK$0.18, or a 55% payout ratio.

January and February generated SSS growth of -24%, and the first two weeks of March generated below -20%, so Q112 SSSG is likely to stay below -20%.

Ajisen expects a turnaround in August with SSSG guidance of 15-20% for 2012. We view the company is too optimistic on traffic recovery, and we forecast 10% in 2012.

EBIT margin came in at 15.9% (vs UBSe: 14.4%), mainly due to the lower-than-expect rental cost to sales. We expect further improvement on rental cost to sales, but it should be largely offset by the rising A&P cost, leading to a flat EBIT margin of 15.9% in 2012E.

Nonetheless, we expect a better EBIT margin trends to reach 16.7% in 2014E, and raise EPS estimates 6%/3%/2% in 2012/13/14E.

We raise our price target 8% to reflect the earnings upgrades. We derive our price target from a DCF based methodology and explicitly forecast long-term valuation drivers using UBS’s VCAM tool.

Trading at 27x 2012E PE with high uncertainties on sales recovery and earnings, we view the stock is overvalued. Therefore, we maintain our Sell rating on Ajisen. (t)

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Re: Ajisen 538

Postby winston » Mon Apr 09, 2012 8:12 pm

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AJISEN (CHINA) (00538) maintained Neutral with TP lifted to HK$9 by JP
2012-03-23

J.P. Morgan reported on AJISEN (CHINA) stating its Neutral rating and target $9 with the following details:

Ajisen’s business continues to be impacted by the soup base incident since August 2011, when news reports revealed that Ajisen's soup base contains lower calcium content than it claims.

We believe the issue is more related to consumers feeling of being misled by the company and are less willing to pay a premium for Ajisen's products going forward.

Rebuilding the brand and regaining consumers' trust are key for business recovery. However, it will take some time for Ajisen to achieve that.

We maintain our Neutral rating as we expect to see a 58% y/y earnings decline in 1H12.

We believe Ajisen has one of the best management teams among the local chain restaurant names. We would be a buyer of the stock when same store sales start showing positive growth.

2011 earnings declined 22%. Ajisen reported 2011 results showing revenue increased 15% y/y to HK$3bn and net profits declined 22% y/y to HK$350m.

Results were in line with management's guidance of a 20- 30% y/y decline in net profits. More importantly, Ajisen's balance sheet remains healthy despite the drop in business in 2H11. As of end 2011, the company has net cash of HK$1.6bn (HK$1.7bn at Dec-10).

SSS still negative 20%-plus. According to management, year to date, same-stores sales in China were still running at negative 20%-plus, suggesting no improvement in recent months.

For the full year, the company is guiding for 15-20% SSS. We think the guidance is too aggressive and have factored in -15% in 1H12 and +15% in 2H12.

New stores opening will be slowed to 100 stores in 2012, most of the new stores will be opened in 2H12, according to the company.

Maintain Neutral, new PT of HK$9.0. As SSS remains negative and stores opening will be back-end loaded, Ajisen should see an 8% and 58% decline in revenue and earnings, respectively, based on our estimates.

Our Dec-12 PT is lifted to HK9.0, which is based on 0.9x PEG and an EPS CAGR of 27.5% in 2012E-14E. We would be buyers of the stock when same-store sales start showing positive growth. (k)

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Re: Ajisen 538

Postby winston » Mon Apr 09, 2012 8:14 pm

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AJISEN (CHINA) (00538): capital expenditure 500M in 2012; no existing plan for price rise
2012-03-22

AJISEN (CHINA) (00538) Chief Financial Officer Robert Ho said that this year's capital expenditure amounted to $500 million, of which $180 million will be used to open shops, $280 million to factory investment, and tens of millions to renovate shops. There will be more promotional campaigns this year, the advertising fees will account for 1.5% of the income.

The Chief Operating Officer & Executive Director Yin Yibing said there is no plan for price rise unless the inflation is intensified leading to higher material cost in the second half of the year.

The gross margin fell from 69.2% in 2010 to 67.8% last year, Yin said, n the past the gross margin can be controlled between 65% and 68%, and this year it is expected to be above 65%. (r)



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Re: Ajisen 538

Postby winston » Tue May 29, 2012 1:08 pm

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DJ MARKET TALK: Goldman Removes Ajisen From Sell List; Stock +5.6%


1134 [Dow Jones] STOCK CALL: Goldman Sachs removes Ajisen (China) (0538.HK) from its Asia Pacific Sell list, and upgrades the stock to Neutral from Sell due to limited downside potential to its new target price of HK$6.40 after its recent underperformance.

Since the house added Ajisen to its Sell List on Apr. 16, Ajisen has fallen 35.9% vs a 9.2% decline in the HSI.

"We believe the stock price weakness resulted from the market's awareness of Ajisen's margin pressure, driven by muted traffic recovery, promotional strategy and rising salary and rental expenses.

We see the outlook remaining challenging due to cost pressure from newly launched operational strategies."

Ajisen is up 5.6% at HK$6.78.

Source: Dow Jones Newswire
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Re: Ajisen 538

Postby winston » Thu May 31, 2012 2:30 pm

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DJ MARKET TALK: UBS Cuts Ajisen Target To HK$5.80; Keeps At Sell

1122 [Dow Jones] STOCK CALL: UBS cuts Ajisen (China)'s (0538.HK) target price to HK$5.80 from HK$8.00 to reflect lower EPS estimates and a 1.5 percentage point reduction to its medium-/long-term EBIT margin assumptions; it keeps the stock at Sell.

The house says Ajisen guided for no major same-store sales improvement in the 1H May vs April, and due to the slow sales recovery, UBS doesn't expect sales to return to pre-crisis levels until end-2012, and lowers its same-store sales growth assumption to 2.0% from 10.0%.

"Trading at 21X 2012 P/E with high uncertainty regarding a sales recovery, we think there is downside earnings risk," it says.

Ajisen is down 2.4% at HK$6.44.

Source: Dow Jones Newswire
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Re: Ajisen 538

Postby winston » Mon Jun 25, 2012 11:39 am

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DJ MARKET TALK: Ajisen May Issue 1H12 Profit Warning - Barclays

0918 [Dow Jones] STOCK CALL: Barclays cuts Ajisen (China) (0538.HK) to Equal Weight from Overweight, and slashes the target price by 45% to HK$6.00.

The house says two key factors lead it to cut its FY12/13 earnings forecasts by 53%:

First, same-store-sales trends continue to be down more than 20% on-year;

Second, the effect of lower sales productivity on fixed costs is impacting Ebit margins, and staff costs are rising by more than previously expected (per unit employee, costs up about 20% on-year).

Barclays says its revised estimates are more than 40% below consensus and it expects the company might issue a profit warning for 1H12.

"Near-term headwinds are likely to be substantial." At pre-open, Ajisen is indicated to rise 5.2% to HK$5.85.


Source: Dow Jones Newswire
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Re: Ajisen 538

Postby winston » Tue Jul 10, 2012 2:19 pm

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AJISEN (CHINA) (00538) kept Sell with TP$4.83 by UBS on expected 68% decline in 1H profit

AJISEN (CHINA) (00538) reported 25% yearly decline in same store sales in China business in June, while it held flat from a month earlier, UBS said in a report.

During January to June, same store sales dropped 22-24%. UBS projects the profit of AJISEN (CHINA) for the first half of this year would tumble 68% from a year ago to $81 million and it will issue profit warning in coming weeks.

AJISEN (CHINA) lacked effective strategy to turn around as there weren't enough promotional expenses in critical time.

The earnings forecast for 2012/13 was lowered 22%/14% as same store sales outlook for the second half of this year remains blurry. AJISEN (CHINA)'s target price was cut from $5.8 to $4.83 with a Sell rating.

Source: AAStocks Financial News
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Re: Ajisen 538

Postby winston » Thu Jul 26, 2012 11:40 am

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AJISEN (CHINA) (00538) expects 1H2012 NP to plunge from a year ago

AJISEN (CHINA) (00538) issued profit warning, expecting the net profit for the first half of this year, to plunge from a year ago due to the temporary decrease in revenue and comparable restaurant sales growth, as a result of certain concerns over the products of the Group raised by some media reports around the third quarter of 2011;

General sluggish consumers’ sentiment in the first two quarter of 2012; and increase in the selling, administrative and other operating expenses incurred by the Group including expense recognition of the share-based payments, arising from share options granted, to certain employees of the Group around third quarter of 2011.

Source: AAStocks Financial News
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Re: Ajisen 538

Postby winston » Tue Aug 07, 2012 11:19 am

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AJISEN (CHINA) (00538) shoots up 11% although GS slashes TP by 58% to $2.7

AJISEN (CHINA) (00538), which had earlier issued profit warning in late July, plunged to three-year low at $4.57 and later went up in sideways.

Although Goldman Sachs slashed its target price by 58% to $2.7 and downgraded it to Sell, it shored up to $6.22, filling the top of downside gap carved up on 4 June ($6.11).

It last soared 11% to $6.2 with 2.19 million shares changed hands on market.

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