SEHK:538

Stock Analysis Report

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Executive Summary

Ajisen (China) Holdings Limited, an investment holding company, operates a chain of fast casual restaurants in the People’s Republic of China and Hong Kong Special Administrative Region.


Snowflake Analysis

Undervalued with excellent balance sheet.

Share Price & News

How has Ajisen (China) Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 538's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

9.8%

538

6.3%

HK Hospitality

5.0%

HK Market


1 Year Return

-59.6%

538

1.1%

HK Hospitality

-5.3%

HK Market

Return vs Industry: 538 underperformed the Hong Kong Hospitality industry which returned 1.1% over the past year.

Return vs Market: 538 underperformed the Hong Kong Market which returned -5.3% over the past year.


Shareholder returns

538IndustryMarket
7 Day9.8%6.3%5.0%
30 Day-22.0%8.7%4.0%
90 Day-36.0%1.4%-4.0%
1 Year-57.3%-59.6%3.3%1.1%-1.9%-5.3%
3 Year-53.8%-59.0%-7.1%-14.5%-0.5%-10.9%
5 Year-61.7%-69.1%9.7%-6.7%-9.0%-23.5%

Price Volatility Vs. Market

How volatile is Ajisen (China) Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Ajisen (China) Holdings undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 538 (HK$1.35) is trading below our estimate of fair value (HK$5.09)

Significantly Below Fair Value: 538 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 538 is good value based on its PE Ratio (8.6x) compared to the Hospitality industry average (15.7x).

PE vs Market: 538 is good value based on its PE Ratio (8.6x) compared to the Hong Kong market (9.4x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 538's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 538 is good value based on its PB Ratio (0.4x) compared to the HK Hospitality industry average (0.8x).


Next Steps

Future Growth

How is Ajisen (China) Holdings forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

18.7%

Forecasted Consumer Services industry annual growth in earnings


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if 538's forecast earnings growth is above the savings rate (1.6%).

Earnings vs Market: Insufficient data to determine if 538's earnings are forecast to grow faster than the Hong Kong market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: Insufficient data to determine if 538's revenue is forecast to grow faster than the Hong Kong market.

High Growth Revenue: Insufficient data to determine if 538's revenue is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if 538's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Ajisen (China) Holdings performed over the past 5 years?

-7.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 538 has a large one-off gain of CN¥43.3M impacting its December 31 2019 financial results.

Growing Profit Margin: 538's current net profit margins (6.1%) are lower than last year (23.2%).


Past Earnings Growth Analysis

Earnings Trend: 538's earnings have declined by -7.4% per year over the past 5 years.

Accelerating Growth: 538's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 538 had negative earnings growth (-71.6%) over the past year, making it difficult to compare to the Hospitality industry average (-12.4%).


Return on Equity

High ROE: 538's Return on Equity (4.9%) is considered low.


Next Steps

Financial Health

How is Ajisen (China) Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 538's short term assets (CN¥2.1B) exceed its short term liabilities (CN¥817.2M).

Long Term Liabilities: 538's short term assets (CN¥2.1B) exceed its long term liabilities (CN¥701.6M).


Debt to Equity History and Analysis

Debt Level: 538's debt to equity ratio (6.9%) is considered satisfactory.

Reducing Debt: 538's debt to equity ratio has increased from 5.5% to 6.9% over the past 5 years.

Debt Coverage: 538's debt is well covered by operating cash flow (214.6%).

Interest Coverage: 538's interest payments on its debt are well covered by EBIT (15.1x coverage).


Balance Sheet


Next Steps

Dividend

What is Ajisen (China) Holdings's current dividend yield, its reliability and sustainability?

5.57%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 538's dividend (5.57%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.46%).

High Dividend: 538's dividend (5.57%) is low compared to the top 25% of dividend payers in the Hong Kong market (7.13%).


Stability and Growth of Payments

Stable Dividend: 538's dividend payments have been volatile in the past 10 years.

Growing Dividend: 538's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (48.1%), 538's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.1yrs

Average management tenure


CEO

Wai Poon (63yo)

no data

Tenure

CN¥1,954,000

Compensation

Ms. Wai Poon is the Founder of Ajisen China Holdings Ltd. and serves as its Chief Executive Officer. Ms. Poon is responsible for the overall management, major decision-making, strategic planning, developme ...


CEO Compensation Analysis

Compensation vs Market: Wai's total compensation ($USD274.83K) is about average for companies of similar size in the Hong Kong market ($USD279.69K).

Compensation vs Earnings: Wai's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Wai Poon
Founderno dataCN¥1.95m3.56% CN¥52.4m
Ka Man Poon
Chief Marketing Officer & Executive Director13.25yrsCN¥841.00k0.23% CN¥3.4m
Minna Ng
Executive Director0.83yrCN¥161.00k0.26% CN¥3.8m
Richard Liu
Investors Relation Officerno datano datano data
Shu Jianqun
VP - HR Management8.17yrsno datano data
Sau Mei Ng
Company Secretary3.08yrsno datano data
Harker Hao
Senior Investor Relations Specialistno datano datano data

3.1yrs

Average Tenure

57yo

Average Age

Experienced Management: 538's management team is considered experienced (3.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Wai Poon
Founderno dataCN¥1.95m3.56% CN¥52.4m
Ka Man Poon
Chief Marketing Officer & Executive Director13.25yrsCN¥841.00k0.23% CN¥3.4m
Minna Ng
Executive Director0.83yrCN¥161.00k0.26% CN¥3.8m
Peter Lo
Independent Non-Executive Director13.25yrsCN¥179.00k0.0069% CN¥101.2k
Shek Voon Jen
Independent Non-Executive Director13.25yrsCN¥179.00k0.0087% CN¥128.2k
Jincheng Wang
Independent Non-Executive Director11.75yrsCN¥151.00kno data
Katsuaki Shigemitsu
Non-Executive Director13.25yrsCN¥110.00k1.99% CN¥29.4m

13.3yrs

Average Tenure

63yo

Average Age

Experienced Board: 538's board of directors are seasoned and experienced ( 13.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Ajisen (China) Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Ajisen (China) Holdings Limited
  • Ticker: 538
  • Exchange: SEHK
  • Founded: 1996
  • Industry: Restaurants
  • Sector: Consumer Services
  • Market Cap: HK$1.474b
  • Shares outstanding: 1.09b
  • Website: https://www.ajisen.com.hk

Number of Employees


Location

  • Ajisen (China) Holdings Limited
  • Ajisen Group Tower
  • 6th Floor
  • Yau Tong
  • Kowloon
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
538SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDMar 2007
AJNDB (Deutsche Boerse AG)YesOrdinary SharesDEEURMar 2007

Biography

Ajisen (China) Holdings Limited, an investment holding company, operates a chain of fast casual restaurants in the People’s Republic of China and Hong Kong Special Administrative Region. It operates through Operation of Restaurants; Manufacture and Sales of Packaged Noodles and Related Products; and Investment Holding segments. The company’s restaurants primarily offer Japanese ramen and Japanese-style dishes under the Ajisen brand. As of December 31, 2019, it had a retail network of 799 restaurants. The company also leases property interests; and invests in financial instruments. In addition, it trades in noodles; and offers management services, as well as operates food processing center. The company was founded in 1996 and is headquartered in Yau Tong, Hong Kong. Ajisen (China) Holdings Limited is a subsidiary of Favour Choice Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/06/05 13:04
End of Day Share Price2020/06/05 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.