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Ajinomoto Co Inc 2802 Stock Quote

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Morningstar‘s Stock Analysis 2802

Valuation
Currency in JPY
Is it the right time to buy or sell?
Is it the right time to buy or sell?

1-Star Price

INVESTOR

5-Star Price

INVESTOR

Economic Moat

INVESTOR

Capital Allocation

INVESTOR

Slowdown in Value-Added Seasonings Growth May Threaten Ajinomoto's Premiumization Strategy

Jeanie Chen Senior Equity Analyst

Analyst Note

| Jeanie Chen |

Narrow-moat Ajinomoto’s first-quarter results, with sales up 16.4% (7.7% currency-neutral) year on year and business profits up 4% (negative 3.8%), are ahead of our expectations and the company’s internal targets thanks to the greater-than-expected foreign-exchange impact and healthcare strength, in part inflated by the timing of shipments. As we had pointed out in our note published on July 15, a weak yen has pumped up margins of the healthcare business including functional materials, which offers a cushion against cost pressures. The sales decline in some value-added seasonings categories does not bode well for its growth strategy of lifting margins through premiumization. After the recent rally, we view shares as overvalued, trading at a 16% premium to our intrinsic value of JPY 3,200 (raised on July 15). Our business profit forecast for 2022 is 2% above guidance.

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Key Statistics 2802

Company Profile 2802

Business Description

Ajinomoto is Japan’s leading food company specializing in amino acids and seasonings derived from amino acid fermentation technologies. It also produces processed foods including dry soup mixes, frozen foods, and beverage products. Apart from the consumer business, it is a key supplier of MSG and nucleotides to global food manufacturers including Nestle. The food business represents more than three fourths of group sales and 80%-plus of profits with roughly half generated overseas. Animal nutrition, healthcare, and specialty chemicals make up the balance of its business portfolio.

Contact
15-1, Kyobashi 1-chome, Chuo-ku
Tokyo, 104-8315, Japan
T +81 352508111
Industry Packaged Foods
Most Recent Earnings Mar 31, 2022
Fiscal Year End Mar 31, 2020
Stock Type
Employees 42,947