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Ajinomoto Co Inc (JP:2802)
:2802

Ajinomoto Co (2802) AI Stock Analysis

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Ajinomoto Co

(OTC:2802)

Rating:64Neutral
Price Target:
¥3,864.00
▲(6.95%Upside)
Ajinomoto Co's stock is supported by strong financial performance and a positive technical trend, but the high P/E ratio suggests overvaluation. The overbought technical indicators indicate a potential for short-term price corrections. The lack of earnings call and corporate events data results in a focus on fundamental and technical analysis.
Positive Factors
Market Performance
Ajinomoto's share price has a potential upside of 32-39% based on the sum-of-the-parts analysis, reflecting a transformation in the company's earnings structure.
Product Innovation
Ajinomoto Co. monopolizes the sale of Ajinomoto Build-up Film (ABF), a critical component in high-end chips, maintaining its dominance through innovation and responsiveness to client demands.
Shareholder Actions
Ajinomoto continues to maintain a shareholder-friendly capital management stance, targeting a total shareholder return of 50% or more through a progressive dividend policy and share buybacks.
Negative Factors
Financial Performance
Frozen Foods margins have been softening again in FY3/25, with an estimated dip to 3.8%.
Industry Risks
A key downside risk will be industry-wide cutback on AI capex spend, which will hamper growth of its functional materials segment, a major growth driver.
Operational Risks
Ajinomoto has announced another round of layoffs in their North America Frozen Food business, signaling that the restructuring agenda continues unabated, despite the abrupt change of Global CEO last month.

Ajinomoto Co (2802) vs. iShares MSCI Japan ETF (EWJ)

Ajinomoto Co Business Overview & Revenue Model

Company DescriptionAjinomoto Co., Inc. engages in the seasonings and foods, frozen foods, and healthcare and other businesses in Japan and internationally. Its Seasonings and Foods segment offers sauces and seasonings products under the AJI-NO-MOTO, HON-DASHI, Cook Do, Ajinomoto KK Consommé, Pure Select Mayonnaise, Ros Dee, Masako, Aji-ngon, Sazón, Sajiku, and CRISPY FRY names; and solutions and ingredients to consumer foods and food service industries. This segment also provides instant noodles under the Knorr Cup Soup, and YumYum names; coffee under the Birdy and Blendy brands; powdered drink under the Birdy 3in1 name; MAXIM products; Chyotto Zeitakuna Kohiten products; and gift sets and office supplies comprising coffee vending machines, tea server, etc. The Frozen Foods segment offers Chinese dumplings, cooked rice, noodles, desserts, shumai, processed chicken, and other products. The Healthcare and Other segment provides amino acids to various industries, such as pharmaceuticals, foods, and cosmetics; sports nutrition products; personal care ingredients; and sterile products, as well as engages in the provision of contract manufacturing services for pharmaceutical intermediates and active ingredients. This segment also offers Ajinomoto Build-up Film, an interlayer insulating material for semiconductor packages. Ajinomoto Co., Inc. was founded in 1909 and is headquartered in Tokyo, Japan.
How the Company Makes MoneyAjinomoto Co. makes money primarily through its diverse portfolio of products in the food and biotechnology sectors. The company's revenue streams are largely driven by the sale of seasonings, processed foods, frozen foods, and beverages, which cater to both consumer and commercial markets. Additionally, Ajinomoto generates income from its amino acids and pharmaceuticals segments, supplying ingredients for food products, dietary supplements, and medical applications. The company also engages in strategic partnerships and collaborations to expand its market reach and enhance its product offerings. Key factors contributing to its earnings include a robust distribution network, a strong brand presence, and ongoing investments in research and development to innovate and improve its product lines.

Ajinomoto Co Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q3-2024)
|
% Change Since: 20.23%|
Next Earnings Date:Aug 01, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed sentiment with record-high sales and strong segment performance in seasonings and frozen foods, but significant challenges in healthcare, biopharma services, and the impact of the Forge acquisition. The company's strategic initiatives and new product successes provide optimism for future growth, yet current challenges weigh on the overall sentiment.
Q3-2024 Updates
Positive Updates
Record-High Q3 Sales and Business Profits
Q3 sales and business income reached record highs for both the 9-month period and the quarter. Sales were JPY 1.676 billion, 104% of the previous year's level, and business profit was JPY 124.4 billion, 104.4% of the previous year.
Strong Performance in Seasonings and Foods
Seasonings and foods achieved strong profit growth, almost meeting the full year profit increase forecast. Domestic and overseas sales were driven by price increases and recovery in volume.
Frozen Food Business Success
The frozen food business achieved more than JPY 10 billion in business profit, surpassing the target within the 9-month period of this fiscal year.
Innovative Product Launches
New personalized interactive communication strategy products, such as Cooked Tofu Kiwami premium Mala Mapo Tofu and women-targeted nutritious meals, have been successful in attracting new customer bases.
Negative Updates
Challenges in Health Care and Other Segments
Profit continues to decrease in every segment of health care and others, with an expectation of bottoming out in the fourth quarter.
Biopharma Services Underperformance
Biopharma services experienced a decline due to decreased orders from biopharmaceutical companies, largely impacted by higher interest rates in North America.
Impact of Forge Biologics Acquisition
The acquisition of Forge Biologics is expected to have a negative impact on profits in Q4 and fiscal '24, with anticipated costs in single-digit billions of yen.
Althea's Decline in Sales and Profits
Althea recorded a decrease in both sales and profits due to a decline in orders from its customers, with plans to recover growth trajectory together with Forge.
Company Guidance
During the Q3 2024 earnings call for 2802.T, the company reported record-high sales and business income for the nine-month period, with sales reaching JPY 1.676 billion, which is 104% of the previous year's level, and business profit at JPY 124.4 billion, representing 104.4% of the previous year. Excluding foreign exchange impact, sales increased by 100.6%, and business profit by 100.3%. The seasonings and foods, along with frozen foods segments, showed significant growth, with overseas volume at 102% and domestic at 99%. However, healthcare and other segments faced declines, with the company anticipating a recovery in electronic materials from Q4. The acquisition of Forge Biologics is expected to impact financials from Q4 onwards, with advanced investments leading to a temporary profit reduction. For fiscal 2024, the firm aims for steady profit growth to align with its 2030 roadmap, leveraging improved efficiency and cost reductions across its operations.

Ajinomoto Co Financial Statement Overview

Summary
Ajinomoto Co presents a strong financial profile with excellent profitability, efficient operations, and robust cash generation. The company is growing steadily with a solid capital structure. While there is moderate leverage, the firm manages its financials well, reflecting stability and potential for sustainable growth in the packaged foods industry.
Income Statement
85
Very Positive
Ajinomoto Co demonstrates strong profitability and growth. The TTM (Trailing-Twelve-Months) gross profit margin is approximately 36.05%, and the net profit margin stands at 6.04%. Revenue growth is robust at 5.80% from the previous year. EBIT margin is healthy at 10.65%, and EBITDA margin is 16.15%, indicating efficient operational management. Overall, the company shows solid revenue growth and profitability.
Balance Sheet
75
Positive
The balance sheet reflects a sound financial position, with a debt-to-equity ratio of 0.66, which is manageable. The return on equity (ROE) is 11.33%, showing efficient use of equity capital. The equity ratio is 43.71%, suggesting a stable capital structure with a decent proportion of equity financing. While leverage is moderate, the company maintains a healthy equity base.
Cash Flow
82
Very Positive
Cash flow analysis reveals strong financial health. The free cash flow growth rate is impressive at 33.49%, and the operating cash flow to net income ratio is 2.33, indicating strong cash generation relative to net income. The free cash flow to net income ratio is 1.39, reflecting efficient cash management. Overall, cash flow metrics indicate robust cash generation and management.
Breakdown
TTMMar 2024Mar 2023Mar 2022Mar 2021Mar 2020
Income StatementTotal Revenue
1.52T1.44T1.36T1.15T1.07T1.10T
Gross Profit
549.01B511.45B470.39B425.90B406.22B403.87B
EBIT
162.26B146.68B148.93B124.57B101.12B48.77B
EBITDA
245.98B232.75B226.85B197.67B168.07B118.79B
Net Income Common Stockholders
91.96B87.12B94.06B75.72B59.42B18.84B
Balance SheetCash, Cash Equivalents and Short-Term Investments
229.37B194.19B145.09B169.26B193.69B150.65B
Total Assets
1.86T1.77T1.51T1.46T1.43T1.35T
Total Debt
538.16B442.49B288.56B313.91B350.42B356.91B
Net Debt
308.78B270.96B155.79B162.45B168.81B215.21B
Total Liabilities
976.07B890.43B688.77B717.32B763.44B761.55B
Stockholders Equity
811.41B814.69B768.68B686.91B620.26B538.98B
Cash FlowFree Cash Flow
128.19B96.05B44.59B64.86B79.61B32.81B
Operating Cash Flow
213.92B168.07B117.64B145.58B165.65B114.86B
Investing Cash Flow
-57.73B-132.43B-30.09B-61.57B-66.25B-66.65B
Financing Cash Flow
-169.22B-6.75B-111.06B-123.06B-60.39B-52.31B

Ajinomoto Co Technical Analysis

Technical Analysis Sentiment
Positive
Last Price3613.00
Price Trends
50DMA
3140.22
Positive
100DMA
3103.59
Positive
200DMA
3013.35
Positive
Market Momentum
MACD
147.06
Negative
RSI
76.43
Negative
STOCH
78.83
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2802, the sentiment is Positive. The current price of 3613 is above the 20-day moving average (MA) of 3454.05, above the 50-day MA of 3140.22, and above the 200-day MA of 3013.35, indicating a bullish trend. The MACD of 147.06 indicates Negative momentum. The RSI at 76.43 is Negative, neither overbought nor oversold. The STOCH value of 78.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2802.

Ajinomoto Co Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
65
Neutral
$8.89B15.014.75%203.76%3.54%-2.49%
64
Neutral
$3.61T51.788.89%1.06%6.35%-114.08%
$8.54B20.8112.17%1.86%
$6.10B18.246.71%2.98%
$6.08B17.0011.20%2.26%
$6.43B15.4213.14%2.09%
$4.47B17.258.78%1.45%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:2802
Ajinomoto Co
3,613.00
703.91
24.20%
KIKOF
Kikkoman
8.87
-2.69
-23.27%
MEJHF
Meiji Holdings Co
22.26
0.34
1.55%
NFPDF
Nissin Foods Holdings Co
20.56
-5.05
-19.72%
TSUKF
Toyo Suisan Kaisha
63.34
1.77
2.87%
YZZKF
Yamazaki Baking Co
20.36
-2.57
-11.21%

Ajinomoto Co Corporate Events

Ajinomoto Co. Advances Share Repurchase Program
Jun 3, 2025

Ajinomoto Co., Inc. has announced the progress of its share repurchase program, which was resolved by the Board of Directors on May 8, 2025. The company repurchased 12,374,900 common shares for JPY 38.27 billion between May 9 and May 31, 2025, as part of a larger plan to buy back up to 50 million shares by November 30, 2025. This strategic move is aimed at optimizing capital structure and enhancing shareholder value, with all repurchased shares set to be canceled.

The most recent analyst rating on (JP:2802) stock is a Buy with a Yen3450.00 price target. To see the full list of analyst forecasts on Ajinomoto Co stock, see the JP:2802 Stock Forecast page.

Ajinomoto Co. Initiates Significant Share Repurchase Program
May 9, 2025

Ajinomoto Co., Inc. announced the repurchase of 9,824,800 of its own shares, aiming to enhance shareholder returns and improve capital efficiency. This move is part of a broader plan to repurchase up to 50 million shares by November 2025, reflecting the company’s commitment to optimizing its capital structure and potentially increasing shareholder value.

Ajinomoto Co. Announces Strategic Share Repurchase Plan
May 8, 2025

Ajinomoto Co., Inc. has announced a plan to repurchase up to 10 million of its own shares, representing 1.01% of its total issued shares, through the Tokyo Stock Exchange’s off-auction trading system. This strategic move, with a maximum cost of JPY 30.15 billion, is part of a broader initiative to repurchase up to 50 million shares by November 2025, aiming to enhance shareholder value and optimize capital structure.

Ajinomoto Co. Initiates Transfer of Head Office Assets
May 8, 2025

Ajinomoto Co., Inc. has announced its decision to transfer its non-current assets, specifically the land and building of its current head office in anticipation of relocating to a new head office in fiscal year 2026. The transfer process will be conducted through a competitive bidding process, with the agreement and transfer scheduled for fiscal year 2025. This strategic move is part of Ajinomoto’s broader operational adjustments and is expected to impact its asset management and future operational efficiencies.

Ajinomoto Co. Announces Major Share Repurchase Plan
May 8, 2025

Ajinomoto Co., Inc. has announced a decision to repurchase up to 50 million of its own shares, representing 5.03% of its total issued shares, with a maximum repurchase cost of JPY 100 billion. This move aims to enhance shareholder returns and improve capital efficiency, with plans to cancel all repurchased shares to optimize the company’s capital structure.

Ajinomoto Reports Increased Sales but Decline in Profits for FY2024
May 8, 2025

Ajinomoto Co., Inc. reported its consolidated financial results for the fiscal year ended March 31, 2025, showing a 6.3% increase in sales to 1,530,556 million yen. Despite the rise in sales, the company experienced a decline in profit before income taxes and profit attributable to owners of the parent company, primarily due to changes in accounting treatments and a stock split. The company also announced a forecast for the fiscal year ending March 31, 2026, with expected sales of 1,618,000 million yen and a significant increase in profit attributable to owners of the parent company by 70.7%.

Ajinomoto Revises Earnings Forecast Following Subsidiary Sale
Apr 24, 2025

Ajinomoto Co., Inc. has revised its full-year consolidated performance forecast for the fiscal year ending March 31, 2025, due to an impairment loss related to its subsidiary, Ajinomoto Althea, Inc. The company has sold its shares in Althea to Packaging Coordinators Inc., leading to a downward revision of profit attributable to owners by ¥20.1 billion. This strategic move is expected to impact Ajinomoto’s financial results, with extraordinary losses recorded in its non-consolidated performance estimates due to the valuation of stocks of subsidiaries and affiliates.

Ajinomoto Co. Sells Subsidiary Althea to PCI in Strategic Realignment
Apr 24, 2025

Ajinomoto Co., Inc. has decided to sell its subsidiary, Ajinomoto Althea, Inc., to Packaging Coordinators Inc. (PCI) as part of its strategic realignment. This move aligns with Ajinomoto’s Medium-Term ASV Initiatives 2030 Roadmap, focusing on high-growth areas and leveraging proprietary technologies to enhance profitability in the healthcare sector.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.