Retailing, Franchising, and Consumerism Business Intelligence in China

Ajisen Reports 11.1% Operating Revenue Drop In China

Are fewer people eating noodles in China these days? According to a fast food noodle chain, retail expansion may have hit a bumpy patch.

Ajisen (China) Holdings Limited published its semi-annual performance report for the first half of 2016, stating that from January to June 2016 the company realized operating revenue of HKD1.395 billion, representing a year-on-year decrease of about 11.1% from HKD1.57 billion.

At the same time, the company's gross profit was HKD988 million, a year-on-year decrease of about 9.8% from HKD1.095 billion; its net profit attributable to shareholders was about HKD671 million, a year-on-year increase of about 506.2%; and its net profit of core businesses was HKD117 million, a year-on-year decrease of 4.8%.

During the reporting period, Ajisen focused on existing stores and adopted a prudent store expansion strategy. The company continued to expand its restaurant network and enhanced deployment in mature markets like Beijing, Jiangsu, Zhejiang, and Shanghai. By June 30, 2016, Ajisen had 662 restaurants, marking a net decrease of two restaurants compared with the same period of last year. Its restaurant network covered 122 cities across the country, an increase of three cities compared with the same period of last year.

Meanwhile, the construction and production of Ajisen's four major production bases in China ensured the stable development of the company's chain restaurant network and its food quality. It is said that Ajisen's four major plants in Shanghai, Chengdu, Tianjin, and Dongguan were already put into operation, which supported the company's network expansion.

The report also revealed that Ajisen's packaged noodle products were sold at supermarkets and department stores and the diversified sales channels further improved its brand awareness. By June 30, 2016, Ajisen's sales sites reached 8,000 and its distribution network covered over 30 cities around China.

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