Ajisen 538

Re: Ajisen 538

Postby winston » Thu Jan 09, 2014 7:40 pm

AJISEN (CHINA) (00538.HK) 4Q fast casual restaurant business sales up 6.3% yoy

AJISEN (CHINA) (00538.HK) +0.250 (2.924%) Short selling $1.56M; Ratio 9.919% announced the unaudited operating figures for the fourth quarter 2013.

The same-store sales in Hong Kong and China rose 4.7% and 10.5% yearly.

Meanwhile, the Group’s fast casual restaurant business sales rose 6.3% yearly.


Source: AAStocks Financial News
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Re: Ajisen 538

Postby winston » Sun Mar 23, 2014 7:57 pm

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Trading at 22x 12M fwd P/E, we believe the current price overdiscounts the 2014 growth potential.

After our 6% earnings cut (reflecting higher promotion costs), earnings should still grow 27%, driven by 10% sales growth, a 1.3 pp margin expansion, and thanks to 2013's low base.

Our 9.7% margin forecast is modest compared to Ajisen's historical net margins of 15-17%.

The 1.3 pp margin expansion should be supported by ongoing GP margin recovery (up 50 bp), contribution by fast-to-breakeven small stores and further improvement in rental & logistic cost ratios (down 1 pp).

● We stay OUTPERFORM with a new TP of HK$9.3 (from HK$11.3) based on 28x 12M fwd P/E, implying 1.0 PEG over 2-yr CAGR of 28%.

Source: CS
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Re: Ajisen 538

Postby winston » Sun Mar 23, 2014 8:07 pm

Quality rather than quantity

Ajisen’s FY13 net profit was largely in line, coming in 3.7% below our forecast mainly due to higher Advertising expenses and loss on disposal of fixed assets.

We maintain our Add rating as Ajisen is still in the middle of a recovery phase and its EBIT margin should continue to improve in FY14 given its focus on operating efficiency and portfolio network optimisation.

We fine-tune our FY14-15 EPS forecasts to reflect a mixed picture of higher GPM and A&P expenses.

We maintain our DCF-based target price of HK$9.9 (WACC 11.3%).

The 2-year PEG at only 0.6x is undemanding.

Source: CIMB
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Re: Ajisen 538

Postby winston » Sun Mar 23, 2014 8:21 pm

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AJISEN (CHINA) (00538.HK) maintained at Outperform with target cut to $9.3 by Credit Suisse
2014-03-21

Credit Suisse said in a report that AJISEN (CHINA) (00538.HK) -0.030 (0.409%) Short selling $632.85K; Ratio 1.699% 's 2013 net profit grew 76% from a year ago, which was lower than its projection due to the high marketing spending.

Meanwhile, the management did not lay down the same store sales guidance for this year, which put the share price under pressure.

The broker reduced the earnings forecasts for 2014 by 6% to reflect the high marking expenses. However, based on the expectation of a 10% growth in sales this year, plus the low base in last year as well as the improved gross margin, it is expected that the company's profit can still grow 27%.

The stock is now trading at P/E of 22x, which has underestimated the business growth.

The target price was lowered from $11.3 to $9.3, and the Outperform rating was unchanged.


Source: AAStocks Financial News
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Re: Ajisen 538

Postby winston » Fri Apr 11, 2014 6:27 pm

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AJISEN (CHINA) (00538.HK) 1Q fast casual restaurant sales up 2.1%
2014-04-11

AJISEN (CHINA) (00538.HK) 0.000 (0.000%) Short selling $698.09K; Ratio 3.207% announced that for the three months as of the end of March, the Group’s fast casual restaurant sales rose 2.1% yearly.

The same-store-sales in Hong Kong rose 1.1% yearly; same-store-sales in China rose 5.1% yearly.


Source: AAStocks Financial News
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Re: Ajisen 538

Postby winston » Mon Apr 14, 2014 7:26 pm

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AJISEN (CHINA) (00538.HK) rated Neutral with target cut to $6.5 by JPM
2014-04-14

AJISEN (CHINA) (00538.HK) +0.050 (0.714%) Short selling $596.97K; Ratio 5.626% showed weakened operational performance during the 1Qr, as the SSS growth in Hong Kong and Mainland was slower than that in the 3Q and 4Q in 2013, JP Morgan mentioned in the latest research report.

For the restaurant sales growth, the reading slowed from 6% on a yearly basis during 2H13 to 2%, hinting that the Group may close more restaurants during the quarter.

JP Morgan previously estimated the 2014 revenue and earning of Ajisen will grow 9% and 22%, respectively, in 2014 but the readings were reduced to 6% and 12%.

The current stock price represents 2014 forecast P/E of 25 times, the Bank believes it is a normal level.

The Neutral rating is maintained, with target price cut from $7.5 to $6.5.


Source: AAStocks Financial News
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Re: Ajisen 538

Postby winston » Wed Aug 27, 2014 4:51 pm

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AJISEN (CHINA) (00538.HK) sees mid single digit SSSG in China

AJISEN (CHINA) (00538.HK) +0.160 (+2.581%) Short selling $1.32M; Ratio 10.752% reported the interim same-store sales growth of China and HK was 4.2% and -0.7% respectively.

CFO Lau Ka Ho was confident that the group will record mid single digit SSSG in China in 2H, since it had introduce the afternoon tea series and invited Korean celebrity as brand ambassador.

For businesses in HK, Lau anticipated the SSSG will resume positive growth in 2H, as the company will open 7-8 branches.

He mentioned CAPEX in 2H will be $150 million, of which $90 million will be used to establish new restaurants.

Source: AAStocks Financial News
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Re: Ajisen 538

Postby investar » Thu Aug 28, 2014 4:25 pm

No BKW/Buffet effect so far...
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Re: Ajisen 538

Postby winston » Wed Jan 14, 2015 8:29 am

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Facing structural headwinds

Ajisen’s 4Q14 PRC SSSG was down by 1.1% yoy while Hong Kong SSSG was down by 2.2% yoy, below our expectations. We cut FY14-16 earnings forecasts
by 7.9-18.7% and lower our DCF-based target price from HK$6.8 to HK$5.7 (WACC 11.8%).

We downgrade the stock from Add to Hold due to several headwinds:
1) difficulty in launching new products,
2) low likelihood of SSSG improvement in the short term, and
3) intensifying competition as high-end restaurants start to target mass market customers.


What Happened

Ajisen’s 4Q14 performance was worse than expected.

PRC SSSG has been deteriorating qoq in FY14. Ajisen cancelled its UCC afternoon tea service after merely one month of its debut in Oct in Shanghai. Management said the service was cancelled due to the lack of advertising for the new product, leading to weak market reception. However, Ajisen will re-launch this product after WiFi is installed in the stores in 1H15 and will embark on more marketing.

The cancellation of the afternoon tea made us concerned about Ajisen’s capability to develop new products successfully, which may make the company lack meaningful SSSG catalysts in the near term. We now expect Ajisen’s PRC SSSG to be 2% for FY14 and 3.5% for FY15.


What We Think

We have seen intensifying competition from high-end restaurants, as these restaurants have been hit hard by anti-corruption measures and are now
launching cheaper products targeting mass market customers. For example, South Beauty (俏江南) has started to offer lunch boxes targeting white-collar
workers while XiaoNanGuo has launched cheaper casual food style products in its Nanxiaoguan (南小馆) restaurants.

We believe this may become a structural trend and negatively impact the SSSG of existing mass market players, such as Ajisen. Compared to its high-end competitors, Ajisen’s menu is a bit simple while the high-end Chinese food players can offer greater variety.


What You Should Do

One positive highlight in FY14 was that Ajisen did a commendable job controlling its operational costs through measures such as more part-time
workers and shutting down inefficient stores. However, we think the company’s stock price will be under pressure as long as SSSG shows no meaningful
improvement. We downgrade to Hold.

Source: CIMB
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Re: Ajisen 538

Postby winston » Sun Mar 08, 2015 6:59 am

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AJISEN (CHINA) (00538.HK) downgraded to Neutral, target cut to $4.2-Macquarie

Macquarie stated in its research report that AJISEN (CHINA) (00538.HK) -0.120 (-2.740%) Short selling $540.66K; Ratio 14.654% should stop expansion after the fast growth for 10 years.

The company should enhance its improve store productivity of its maturing brand to protect margins.

Since the restaurant sales growth was weak and lower than its peers in 2014, the research house lowered the earning forecast in 2014 - 2016 by 7 - 19% to reflect the slower pace of expansion and lower same store sales growth.

Considering the muted outlook over the next 12 months, Macquarie lowered the company's target price from $9.3 to $4.2 based on the PE of 15x.

However, the valuation of the company is reasonable and the momentum of earning growth is limited so the rating was downgraded to Neutral.

Source: AAStocks Financial News
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