Disappointing Results on Unexpected Weakness and One-Offs; Shares Undervalued After a 7% Correction
Narrow-moat Ajinomoto’s first-quarter results were somewhat disappointing, with sales 4% below our expectations, although earnings were largely in line. A 7% correction in its share price after the result announcement appears to be triggered by unexpected weakness in the healthcare business and in overseas consumer foods, specifically in Thailand. On the other hand, the moaty domestic consumer food business, which saw its margin advance nearly 200 basis points along with double-digit earnings gr...Ajinomoto and its affiliates are mainly engaged in the manufacture and sale of food products, fine chemicals and pharmaceuticals in Japan and overseas. Co.'s principal food products for the retail and commercial markets include umami seasoning "AJI-NO-MOTO®," "HON-DASHI," and "Cook Do®," processes foods, frozen foods, instant noodles, coffee products, sweeteners and umami seasonings for processed food manufacturers. Co. also manufactures feed-use amino acids, amino-acids for pharmaceuticals and foods, amino acid-based products and specialty chemicals, as well as pharmaceuticals for gastrointestinal and metabolic diseases.
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