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Ajisen pays price for food claims
By Jin Jing |
01:18 UTC+8 August 6, 2011
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Print Edition
Print Edition
TRADING in shares of Ajisen (China) Holdings was suspended yesterday after the Japanese-style fast-food chain operator was accused of making inaccurate claims.
Ajisen China said in a statement to the Hong Kong stock exchange yesterday that it would issue a price-sensitive statement, but it gave no details.
Ajisen China, which is the brand licensing operator of Ajisen Ramen on Chinese mainland and Hong Kong, was last month apparently exposed as using liquid concentrates in its soup instead of cooking the soup fresh at each of its outlets, as claimed in the company's advertisement.
It was also accused of exaggerating the nutritional value of its noodles.
Initial checks by Chinese authorities found no banned food additives in the concentrates, but local officials are investigating Ajisen Ramen's advertisements for inaccurate claims.
UBS researchers yesterday downgraded the 12-month rating of Ajisen China to "neutral" from "buy," and cut the 2011 price target by 35 percent to HK$13 (US$1.70).
UBS analysts estimated same-store sales of Ajisen China will fall 5 percent in the second half of this year and full-year sales growth will slip to 4.5 percent from 10 percent the year before. Analyst Erica Poon Werkun said: "If Ajisen fails to restore its brand value soon, margins will deteriorate permanently."
Ajisen China said in a statement to the Hong Kong stock exchange yesterday that it would issue a price-sensitive statement, but it gave no details.
Ajisen China, which is the brand licensing operator of Ajisen Ramen on Chinese mainland and Hong Kong, was last month apparently exposed as using liquid concentrates in its soup instead of cooking the soup fresh at each of its outlets, as claimed in the company's advertisement.
It was also accused of exaggerating the nutritional value of its noodles.
Initial checks by Chinese authorities found no banned food additives in the concentrates, but local officials are investigating Ajisen Ramen's advertisements for inaccurate claims.
UBS researchers yesterday downgraded the 12-month rating of Ajisen China to "neutral" from "buy," and cut the 2011 price target by 35 percent to HK$13 (US$1.70).
UBS analysts estimated same-store sales of Ajisen China will fall 5 percent in the second half of this year and full-year sales growth will slip to 4.5 percent from 10 percent the year before. Analyst Erica Poon Werkun said: "If Ajisen fails to restore its brand value soon, margins will deteriorate permanently."
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