Ajisen Ramen Shrinks China Restaurants As Net Profit Up 76.2%

Ajisen (China) Holdings Limited, a Chinese fast food restaurant chain, announced in its annual financial report that by December 31, 2013, the company realized operating revenue of HKD3.24 billion, a slight year-on-year increase of 6.5%; while its net profit surged by 76.2% year-on-year to HKD271 million.

Though Ajisen's turnover increased, its store numbers decreased in 2013. Statistics show that by the end of 2013 it had 636 chain restaurants, representing a decrease of 25 outlets compared with the same period of previous year.

Ajisen said 2013 was a year of adjustment for the group and they slowed down chain restaurant network expansion, shut down underperforming sites, and adjusted some restaurant areas to improve output per unit area. Meanwhile, the group applied a targeted development strategy to enhance restaurant expansion in Beijing, Shanghai, Guangzhou, Shenzhen, Jiangsu, Zhejiang, Anhui, and other transport hubs to realize structural improvements. In addition, Ajisen's packaged noodle products achieved sales of HKD138 million, accounting for 4.3% of the total revenue.

Pan Wei, chairman and executive president of Ajisen, said that based on the company's plans, the company aims to shut down 10 to 20 restaurants in 2014; meanwhile, they will open 74 additional outlets to increase the number of their outlets to 710 by year-end. From 2016 to 2017, Ajisen is expected to increase its restaurant number to 1,000.

Liu Jiahao, chief financial officer of Ajisen, added that the company will spend HKD250 million in 2014, including HKD60 million to HKD70 million for factory construction; HKD30 million for equipment; HKD20 million for restaurant renovation; and the remaining for new restaurant openings.