We will discontinue analyst coverage of Ajinomoto on or about Oct. 15, 2024. We provide analyst research and ratings on over 1,500 companies globally and periodically adjust our coverage according to investor interest and staffing.
The restructuring plan to withdraw from or downsize the noncore businesses outside the six areas including seasonings, Asian frozen foods, and healthcare will allow Ajinomoto to lift returns on investment and stay focused on its competitive advantages.
Bears
The economic setback resulting from the coronavirus outbreak could depress consumer spending and deter the company's ambition to accelerate growth by raising value-added sales.
Ajinomoto is Japan’s leading food company specializing in amino acids and seasonings derived from amino acid fermentation technologies. It also produces processed foods including dry soup mixes, frozen foods, and beverage products. Apart from the consumer business, it is a key supplier of MSG and nucleotides to global food manufacturers including Nestle. The food business represents nearly three fourths of group sales and 80%-plus of profits with nearly two thirds generated overseas. Healthcare and function materials (mainly Ajinomoto build-up film, or ABF), the key growth drivers through 2030, make up the balance of its business portfolio. The nonfood businesses are expected to contribute half of the group profits by 2030, boosted by ABF and CDMO growth.