Ajisen (China) Holdings Limited (0538) AI Stock Analysis

• Market Cap: HK$1.07B
• Dividend Yield: 6.53%
• Average Volume (3M): 1.13M
• Price to Earnings (P/E): 19.8
• Beta (1Y): 0.44
• Revenue Growth: -7.18%
• EPS Growth: -110.84%
• Country: HK
• Employees: 7,790
• Sector: Consumer Cyclical
• Sector Strength: 68
• Industry: Restaurants
• EPS (TTM): -0.01
• Shares Outstanding: 1,091,538,800
• 10 Day Avg. Volume: 2,434,941
• 30 Day Avg. Volume: 1,133,309
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$1.00
• Price Target Upside: 2.04% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 57 Neutral
• Price Target: HK$1.00 ▲(2.04% Upside)

The overall stock score is primarily influenced by financial performance concerns, particularly the negative cash flow and profitability issues. Technical analysis provides some positive momentum, but valuation concerns due to a negative P/E ratio offset this. The attractive dividend yield offers some support.

Ajisen (China) Holdings Limited Business Overview & Revenue Model

Company Description

Ajisen (China) Holdings Limited (0538) is a prominent operator of quick-service restaurants based in China, specializing in Japanese-style ramen noodles. The company is known for its high-quality ramen offerings and operates a large network of restaurant outlets across various regions in China. In addition to ramen, Ajisen provides a diverse menu that includes various Japanese dishes, catering to a wide range of customer preferences.

How the Company Makes Money

Ajisen (China) Holdings Limited generates revenue primarily through its chain of quick-service restaurants. The company's main revenue stream is the sale of food and beverages at its numerous restaurant locations. Ajisen's strong brand presence and extensive network of stores enable it to attract a large customer base seeking Japanese cuisine, particularly ramen. The company may also engage in strategic partnerships or collaborations to enhance its market presence or diversify its offerings, although specific partnerships contributing to its earnings are not detailed. Additionally, the company might explore franchising opportunities or expand its product lines to include packaged goods, which could provide supplementary revenue streams.

Ajisen (China) Holdings Limited Financial Statement Overview

Summary

The company's financial performance is under pressure, with declining revenue, negative net profit margin, and cash flow constraints in 2024. While the balance sheet remains strong, the negative cash flow raises liquidity concerns.

Income Statement

The company has experienced fluctuating revenue, with a significant decline in 2024 compared to 2023. Gross profit margin has remained relatively stable, but net profit margin has deteriorated due to negative net income in 2024. EBIT and EBITDA margins have also decreased, indicating challenges in operational efficiency.

Balance Sheet

The company maintains a strong equity base with a declining debt-to-equity ratio over recent years, showcasing financial stability. The equity ratio is healthy, indicating a solid capital structure. However, the return on equity has been negative in 2024 due to net losses, which is a concern.

Cash Flow

The cash flow statement reveals challenges, with operating cash flow falling to zero in 2024. Free cash flow has also dropped significantly, impacting financial flexibility. The absence of free cash flow growth and operating cash flow to net income ratios in 2024 highlight cash flow constraints.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.72B	1.82B	1.43B	2.00B	1.82B
Gross Profit	829.10M	892.30M	626.05M	911.23M	822.52M
EBITDA	128.44M	583.75M	216.74M	162.59M	381.87M
Net Income	-20.22M	181.19M	-143.91M	20.94M	-77.87M
Balance Sheet
Total Assets	3.99B	3.96B	3.87B	4.30B	4.61B
Cash, Cash Equivalents and Short-Term Investments	1.64B	1.63B	1.47B	1.53B	1.74B
Total Debt	611.57M	439.79M	503.13M	681.37M	818.79M
Total Liabilities	1.02B	903.59M	947.27M	1.19B	1.38B
Stockholders Equity	2.91B	3.00B	2.87B	3.06B	3.16B
Cash Flow
Free Cash Flow	319.48M	432.86M	244.87M	296.46M	279.67M
Operating Cash Flow	429.94M	503.18M	299.92M	417.72M	405.33M
Investing Cash Flow	-392.44M	-506.58M	-47.91M	-104.57M	-6.34M
Financing Cash Flow	-333.31M	-329.04M	-347.82M	-519.84M	-350.22M

Ajisen (China) Holdings Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.98
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0538, the sentiment is Positive. The current price of 0.98 is above the 20-day moving average (MA) of 0.92, above the 50-day MA of 0.88, and above the 200-day MA of 0.79, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 70.12 is Negative, neither overbought nor oversold. The STOCH value of 84.44 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0538.

Ajisen (China) Holdings Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2217	74 Outperform	HK$2.11B	26.39	5.40%	4.62%	3.43%	-32.96%
6811	64 Neutral	HK$1.00B	16.51	6.54%	5.33%	2.49%	-33.12%
0341	64 Neutral	HK$4.20B	18.09	8.26%	7.78%	-1.42%	-28.96%
0538	57 Neutral	HK$1.07B	19.75	-0.69%	6.53%	-7.18%	-110.84%
Sector *	57 Neutral	HK$25.94B	4.53	-4.73%	5.53%	-0.79%	-51.25%
0520	51 Neutral	HK$887.24M	―	-40.47%	7.39%	-21.14%	-107.76%
2150	47 Neutral	HK$2.78B	―	-20.95%	―	-6.61%	-5748.54%

Ajisen (China) Holdings Limited Corporate Events

Ajisen (China) Holdings Limited Announces Expected Profit Turnaround

Ajisen (China) Holdings Limited has issued a positive profit alert, indicating an expected profit for the period ending June 30, 2025, ranging from RMB10.0 million to RMB40.0 million, compared to a loss of RMB7.2 million in the previous year. The turnaround is attributed to an increase in the number of stores and enhanced operational efficiency, which have collectively improved operating profit. However, these results are based on unaudited accounts and are subject to adjustments.

Ajisen (China) Announces Temporary Franchise Fee Reduction

Ajisen (China) Holdings Limited announced a temporary reduction in franchise fees for its operations in Hong Kong and Mainland China under new supplemental franchise agreements with Shigemitsu Industry. The adjustments, effective from January 2025 to December 2026, will see fees reduced from HK$7,000 to HK$5,000 per store in Hong Kong and from RMB3,500 to RMB2,500 per store in Mainland China, while other terms of the franchise agreements remain unchanged.

Ajisen (China) Renews Shanghai Office Lease with Cost Savings

Ajisen (China) Holdings Limited has announced the renewal of its tenancy agreement for office space in Shanghai, extending the lease from July 2025 to June 2028. This renewal, involving a connected transaction with JILIN Property, is exempt from certain regulatory requirements due to its size but will still be reported. The new agreement offers a 4.5% reduction in rent compared to the previous terms, potentially improving cost efficiency for the company.

Ajisen (China) Holdings Limited Announces Change in Trusteeship

Ajisen (China) Holdings Limited has announced a change in trusteeship concerning its controlling shareholder, the ANMI Trust, which is a discretionary family trust set up by Ms. Poon. The change was completed on June 18, 2025, and involved a waiver from the obligation to make a mandatory general offer for the company’s shares, which could have been triggered by this change. This development is significant as it maintains the current shareholding structure without necessitating a general offer, thus preserving the existing control dynamics within the company.

Ajisen (China) Holdings Limited Passes All Resolutions at AGM

Ajisen (China) Holdings Limited announced that all proposed resolutions were passed at its annual general meeting held on 20 May 2025. Key resolutions included the adoption of the financial statements for the year ended 31 December 2024, the declaration of a final dividend, the re-election of directors, and the reappointment of Deloitte Touche Tohmatsu as auditors. The approval of general mandates for the issuance and repurchase of shares indicates a strategic focus on flexibility in capital management, which may impact the company’s market operations and shareholder value.