Value Investor Club

AJINOMOTO (MALAYSIA) BERHAD [S] Evaluation

noobxiaoz
Publish date: Fri, 10 Jan 2014, 10:29 AM
noobxiaoz
0 37
Proven to be recession proof investing method, we adapt the value investing approach in order to grow our hard earned money, Value Investor Club tends to provide you practical and logical insights and examples upon evaluation of listed equities. Equip yourself with all the qualitative and quantitative technical know-how to make your very own and intelligent investment decision today!
Following Message
Being in the gigantic flavouring manufacturer, Ajinomoto has long established its branding throughout the market. Product such as salt, seasoning, industry use flavouring is well diversified in the company. The only challenging competition for Ajinomoto in Malaysia is Maggie which is a subsidiary of Nestle. As flavouring requires a little R&D which is not survival purpose, Ajinomoto find its way up without much capital expenditure. Establishing a number of subsidiary under the name of Ajinomoto takes a lot of time, hence it is not easy for other firm to enter and dominate the market which is favourable for the existing firm. Despite the stability of food  industry, Ajinomoto faces fallout on 2009 due to 31.69% of its revenue is generated from overseas such as middle east and other Asia countries. Considering its ability to generate increasing earnings in the future is high as the need of preservative is widely recognized especially in the food industry regardless of household or business owners especially with its well established brands together with well diversified of product lines to satisfy customers.

However, there is underlying risks where there is global trend of recognizing healthy consumption practices where flavouring such as MSG( MonoSodium Glutamate) is being boycotted by some parties. Also, it is affected by international financial crises as shown in 2009 where the earnings are dropped to RM0.08 per share as over 30 percent of the revenue is generated internationally.
Ajinomoto Financial Performance Table

Based on the Cash Flow from operating activities for the past ten years, it fluctuated wildly during financial crises as some of its holdings may consist of high risk securities. Return on asset and equity is not showing satisfactory rate  as of 7 and 8 percent respectively(standard for both is 15 and 10%)as it reflects low efficiency. Cash flow under 2009 appears to be doubtful as there was positive cash inflow of 10 million resulted from disposal of shares although the company only possess RM4million worth of shares. The company is not consistent with its earnings and efficiency ratios. Price earning is retrieved by using the lowest market price in the past one year divided by operating cash flow per share. The price earning of 8.4 is rather low where it indicates the share is still within the range of affordability. Also, the book value is worth RM4 per share which is lower than the current market price of RM4.88 where it shows the value of net assets is not up to the price of share. Overall, quantitative factor is not showing desirable results where it is up to further timing to consider the investment of this share.

Stock: AHEALTH Code: 7090 Company: APEX HEALTHCARE BERHAD [S]













AJI (2658)
Related Stocks
More articles on Value Investor Club
TEO GUAN LEE CORPORATION BERHAD VALUE EVALUATION

Created by noobxiaoz | Jun 05, 2014

TAN CHONG MOTOR HOLDINGS BERHAD VALUE EVALUATION

Created by noobxiaoz | May 28, 2014

SPRITZER BHD VALUE EVALUATION

Created by noobxiaoz | May 24, 2014

PPB GROUP BERHAD VALUE EVALUATION

Created by noobxiaoz | May 17, 2014

POWER ROOT BERHAD VALUE EVALUATION

Created by noobxiaoz | May 13, 2014

PANASONIC MANUFACTURING MALAYSIA BERHAD VALUE EVALUATION

Created by noobxiaoz | May 07, 2014

PADINI HOLDINGS BERHAD VALUE EVALUATION

Created by noobxiaoz | May 01, 2014

ORIENTAL HOLDINGS BERHAD VALUE EVALUATION

Created by noobxiaoz | Apr 25, 2014

INTERNATIONAL BUSINESS MACHINES CORP. VALUE EVALUATION

Created by noobxiaoz | Apr 22, 2014

KAMDAR GROUP BERHAD VALUE EVALUATION

Created by noobxiaoz | Apr 20, 2014

Discussions
Be the first to like this. Showing 0 of 0 comments
Post a Comment