Ajisen 538

Re: Ajisen 538

Postby winston » Wed Sep 02, 2009 1:26 pm

Noticed that service at Ajisen is not as good as before. They seem understaffed and the huge crowd at lunchtime is also not helping things..

This counter touched a high of HK$6. It's now down 17% from the top, to about HK$5.

PE is about 24. Expect top-line growth to be about 25%. Bottom-Line may not be that high due to upfront expenses associated with new store openings.

Just initiated a position today. Follow me at your own risk.
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Re: Ajisen 538

Postby winston » Tue Sep 15, 2009 11:42 am

Not vested anymore. PEG of about 2. Results unaudited. Key Operating Ratios for restaurants continues to detiorate...

=================================

INTERIM RESULTS HIGHLIGHTS

• Turnover rose by 24.3% to HK$937 million (corresponding period of 2008: HK$754m)

• Profit from core operations of the Group rose by 26.3% to HK$157.8 million (corresponding period of 2008: HK$124.9 million)

• Gross profit margin improved by 0.8 percentage point to 68.9% (corresponding period of 2008: 68.1%)

• Profit attributable to owners of the Company grew by 12.1% to HK$133.1 million (corresponding period of 2008: HK$11 8.7 million)

• Basic earnings per share increased by HK1.34 cents to HK12.46 cents, representing 12.1% increased (corresponding period of 2008: HK11 .12 cents)

• Total number of restaurants reached 350 by 30 June 2009 and 361 as at the date of this announcement

http://www.hkexnews.hk/listedco/listcon ... e_main.asp
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Re: Ajisen 538

Postby winston » Tue Sep 15, 2009 2:09 pm

DJ MARKET TALK: 1H Net Pft +12.1%, Sales +24.3%

1303 [Dow Jones] Ajisen (0538.HK) may rise on rebound after ending 2.1% lower at HK$5.53 Monday, supported by 12.1% on-year rise in its 1H net profit at HK$133 million.

Sales +24.3% at HK$937 million with restaurant chain expansion as major growth drivers; number of restaurants increased to 350 end-1H09 vs 315 end-2008.

BOC International says results in line with expectation and accounting for 46.5% of its FY09 net profit forecast. Notes, same-store-sales down 5.1%, 16.3% for China, HK, respectively, mainly due to less traffic flow.

"We expect the economies of scale (from store network expansion) to kick in once same-store-sales start to grow, which we believe will occur in 2H09." House reviewing its rating (currently at Hold), target (not shown).

Source: Dow Jones Newswire
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Re: Ajisen 538

Postby winston » Tue Sep 15, 2009 4:13 pm

DJ MARKET TALK: Ajisen Down 0.5%; Slowing Consumer Spending - MS

1533 [Dow Jones] Ajisen (0538.HK) down 0.5% at HK$5.50, likely due to post-result profit-taking after stock's 8.0% gain over past 4 sessions vs HSI's 0.7% fall during same period. Stock likely priced in +12.1% on-year rise in 1H net profit at HK$133 million;

Morgan Stanley says results "largely in line" with its forecast. Still, broker warns same-store sales down significantly (HK restaurants down 16.3%), reflecting severe impact from slowing consumer discretionary spending amid stressed macro environment.

Adds growing pressure on consumer discretionary income expected, likely constraining sales growth for industry in FY09-FY10 and unexpected food/labor cost inflation. Keeps at Equal-weight, target at HK$3.20.

Source: Dow Jones Newswire
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Re: Ajisen 538

Postby winston » Wed Sep 16, 2009 2:43 pm

Not vested anymore. I'm not as bullish as these guys. PEG = 2. It''s a "show-me" stock now...

========================================================

DJ MARKET TALK: BOCI Ups Ajisen (China) To Buy; HK$6.35 Target

1243 [Dow Jones] STOCK CALL: BOC International upgrades Ajisen(China) (0538.HK) to Buy from Hold, raises target to HK$6.35 (based on 18.5X FY10 P/E) from HK$4.40, to reflect better macro-economic situation.

"We believe its store efficiency will improve going forward." Notes, it held net cash of HK$1.70 billion end of 1H09, vs HK$1.32 billion end-2008, implying healthy cash inflow from its operations. Adds, given its replicable business model and ample room for restaurant chain expansion in China, expects earnings CAGR at 26.8% for FY08-FY11.

Source: Dow Jones Newswire
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Re: Ajisen 538

Postby winston » Fri Sep 18, 2009 5:00 pm

Not vested. PEG 2

DJ MARKET TALK: MS Raises Ajisen Target To HK$6.40 Vs HK$3.20

1549 [Dow Jones] STOCK CALL: Morgan Stanley raises Ajisen (0538.HK) target to HK$6.40 from HK$3.20, after revising up FY09-FY11 earnings forecasts by 3%-5%; expects company to show stronger growth in 2H09 and 2010, citing economic recovery in place.

At 16.7X FY10 P/E, says stock looks fairly valued, maintains Equal-weight call. 'We believe same store sales growth may have troughed in 1Q09 and is set to accelerate over the next 6-12 months, along with the economy.' Adds, margins could expand due to ease in food inflation.

Source: Dow Jones Newswire
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Re: Ajisen 538

Postby winston » Tue Sep 29, 2009 7:39 pm

Financial Statements - [Interim/Half-Year Report]
Interim Report 2009


http://www.hkexnews.hk/listedco/listcon ... =000869534
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Re: Ajisen 538

Postby winston » Fri Oct 09, 2009 6:43 am

Not vested.

Hefty appetite by Derek Yiu, The Standard HK

It may surprise people to know that Ajisen (China) (0538) started its factory in Shenzhen way before opening its first outlet in the special economic zone in 1997.

For the first half of this year, the firm's turnover and net profit recorded doubt-digit growth at HK$937 million and HK$139 million respectively.

Chairman Poon Wai credits the Shenzhen move - one of the best decisions of her life - for the robust bottomline.

The move linked manufacturing with retail centralized production for Ajisen, whose outlets primarily sell soup noodles.

Before running Ajisen in China, Poon sourced foodstuffs in the mainland and sold them overseas. But it was a risky business as some clients - who could pay on credit - eventually failed to do so.

"[Giving] credit scared me off at the time," Poon said. "I wanted cash."

Then she went on a field trip to Japan.

Established in Kyushu in 1968, Poon merely saw Ajisen as a small business selling noodles.

Yet the production plant of Ajisen's owner - Shigemitsu Industry - captivated her.

Soup and noodles were centrally produced in a 28- to 32-hectare plant. With this, she thought restaurants - the front end of the business - faced little supply or inventory problems.

That the restaurants received cash from customers and ran on credit from suppliers made it all the more attractive to bring Ajisen to China, she said.

Poon provided full details of the franchise agreement with the Japanese company right after she started the Shenzhen plant.

Royalties were fixed at 3,500 yuan (HK$3,971) per annum for each mainland branch and HK$7,000 per annum for a Hong Kong outlet - for good. No changes were possible without a mutual agreement.

"Some of our Shanghai restaurants had [annual] revenues upwards of 2 million yuan," Poon said. "The franchise owner took only 3,500 yuan from each."

Shigemitsu also took a minor stake in Ajisen (China).

Ajisen had 315 stores by the end of last year and aims to add another 90 stores this year. Next year, it hopes to open up to 120 new branches.

"Ajisen is attractive because of the scale and speed of its expansion in the mainland," said Bernard Chu Chun- ming, analyst at Guodou Securities, who has a "buy" recommendation. At least eight other institutions have had the same rating on the stock as of September 16.

"But it has to keep opening a certain number of restaurants to maintain the current growth [momentum]. Whether it can find appropriate shops with enough customer flow is of paramount importance," Chu said.

Over the years, Ajisen's network has spread across 61 cities in 19 provinces. Faced with an economic crisis, the company has moderated its expansion drive, especially in southern China, which has been more hard hit by the global financial crisis than other parts of the country.

Ajisen has been focusing on smaller outlets in existing markets rather than expanding to new provinces.

Indeed, many people knock on Poon's door for the right to run Ajisen, which enjoys yet another permanent right - to sub-franchise as it sees fit while its annual royalty to the Japanese franchise owner remains unchanged.

Poon believes a franchise owner has more responsibilities than just charging royalties. An important element is the provision of technical support. In this sense, Shigemitsu is very supportive.

Ajisen changes 30 percent of its menu twice a year and Shigemitsu sends staff over to help with developing new items, Poon said.

"Japan spends much effort in research and development, especially in terms of flavor," Poon said, explaining why Japanese ramen tastes better and can command higher prices than Chinese hand-pulled noodles.

"No matter what you eat, it cannot taste other than sweet, spicy, sour and the like. How do you make your noodles more attractive and enrich their tastes? The Japanese are the best at combining different ingredients through endless and careful research."

With this in mind, Poon has employed a team of Japanese research specialists.

Ajisen is constructing four more production bases in Shanghai, Tianjin, Dongguan and Chengdu.

Phase 1 of the Dongguan project commenced operation at the end of last year while the one in Shanghai will start in December next year.

When the four bases come into full capacity in two to three years time, they can support between 1,500 and 1,800 branches in the mainland and Hong Kong.

With such a surge in productivity, Ajisen also expects to expand the sales of packaged noodles, currently its second largest business.

While opening self-operated stores tops the ramen chain's agenda, Ajisen has further development plans. With the support of a solid production line, it hopes to tap into the high-end market first and then break into the mass market.

It started renovating a store in the International Finance Centre earlier this month.

The ramen store - expected to open later this month - will bear a different name than Ajisen. To enhance food quality, it will ship flour from Japan to make noodles and devise a unique soup formula.

Analyst Chu believes the mass market would be the more attractive choice of the two, though Poon has as yet no detailed plan.

"Suppose there is a badly run chain with 70 to 80 restaurants, we will purchase it," Poon said. "We don't want their business, but their locations. Ajisen can take some of them. Locations that do not suit Ajisen will go to the mass market noodle brand."

There are opportunities here and there in the market, but perhaps only those with entrepreneurial spirit will spot them.

A merchandiser for 10 years back then, Poon said she had to do everything on her own, from sourcing to marketing, and staffing to accounting. This trained her sensitivity and judgment toward food, markets and people. So when an opportunity in Japan arose, she grasped it.

Along with other entrepreneurs in the catering business, Poon visited Taiwan twice this year in search of more business opportunities.

"With a high table turnover, Ajisen can do the same," Poon added. "We have the flexibility to run restaurants even round the clock, for people who want to have a hot bowl of noodles late at night."

At the end of the day, however, a sound business model matters more than anything.

http://www.thestandard.com.hk/news_deta ... 91005&fc=1
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Re: Ajisen 538

Postby winston » Wed Dec 02, 2009 3:34 pm

Not vested.

DJ MARKET TALK: DBS Starts Ajisen (China) At Buy; HK$7.90 Target

1234 [Dow Jones] STOCK CALL: DBS starts Ajisen (China) (0538.HK) at Buy, sets target at HK$7.90, tipping company as key beneficiary of growing catering market in China, especially considering high profitability and scalable model.

"Given its first-mover advantage in Japanese ramen, it has built an extensive restaurant network in China under the well-known Ajisen brand." Notes stock trading at 20X FY10 P/E, valuation still lags major consumer players.

Says target price based on 0.9X FY10 PEG, still at 30% discount to China's consumer sector average, translates into 23X FY10 P/E.

Source: Dow Jones Newswire
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Re: Ajisen 538

Postby winston » Tue Jan 26, 2010 8:22 am

Not vested. It's not as busy as before. In addition, I prefer to eat at Mian Ai Mian.

==============================================

From Dr. Check, The Standard HK:-

One stock you may consider is Ajisen (China) (0538), a restaurant chain selling Japanese noodles.

As of last June, it operated 350 outlets in 64 mainland cities. First-half net profit grew 12.1 percent year-on-year to 133 million yuan (HK$151.3 million).

The stock is currently trading at around 27 times its 2009 expected earnings.

BOC International believes Ajisen may sharply raise its operating margin through cost controls. It set a target price of HK$8.25 or 24 times its 2010 expected PE. The stock peaked at HK$15.20 in early 2008 but fell below HK$3 during the financial crisis.

It has since rebounded, closing yesterday at HK$7.50. Around HK$6.80, Ajisen should arouse more than just the taste buds.
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