Ajinomoto Co: Strategic Restructuring and Growth Prospects Justify Buy Rating

DBS analyst Zheng Feng Chee maintained a Buy rating on Ajinomoto Co (AJINF – Research Report) today and set a price target of Yen4,000.00.

Zheng Feng Chee’s rating is based on Ajinomoto Co’s strategic restructuring and growth prospects. The company has been actively reshaping its business portfolio by divesting non-core operations with limited competitive advantage, such as the sale of Althea and the planned exit from the Hayward Plant. This strategic focus is expected to enhance Ajinomoto’s competitive edge and drive growth, particularly in the Healthcare & Others segment, which is projected to be a key driver of profitability.
Furthermore, Ajinomoto’s commitment to shareholder value through a progressive dividend policy and share buybacks supports the Buy rating. The company has increased its dividend per share and executed significant share buybacks, with plans to expand these efforts. Despite the elevated valuation multiple, Zheng Feng Chee believes it is justified due to the company’s disciplined portfolio reshaping and potential upside to earnings, including a conservative revenue forecast for Functional Materials amidst ongoing AI server demand.