味之素公司（2802.JP）：日本消费者回报革命味之素的医疗保健重组及2025年关键催化剂

Euan McLeish+81 3 5962 9611euan.mcleish@bernsteinsg.com Hao Wang, CFA+852 2123 2627hao.wang@bernsteinsg.com Mufei Gao+81 3 6777 6995mufei.gao@bernsteinsg.com Price Target Japan Consumer Returns Revolution: Ajinomoto's Healthcarerestructuring and key catalysts for 2025 Ajinomoto’s US Healthcare restructuring will take a major step forward in May 2025 with theexpected sale of the loss making Althea Fill-Finish business which will take US HealthcareBusiness Profit margins from -4% in FY3/25 to +5% in FY3/26, by our estimates. In mid& late 2025, we will be looking for evidence of 2 key Forge customers filing with the FDAin order to commence human clinical trials as we expect these filings to trigger successpayments and increased ongoing production volumes/fees as the human trials progress.Excluding these IND developments, we have raised our FY26/27 Americas BP est. by 6% /9% resulting in a 0.7% / 0.9% overall Business Profit uplift, and an improvement in FY3/26ROIC to 7.6%. Close Date28 Apr 20252802.JP Close Price (JPY)2,893.00Price Target (JPY)4,300.00Upside/(Downside)49%52-Week Range3,295.00/2,443.00JPL1,707.11FYEMarDiv Yield1.4%Market Cap (JPY) (B)2,909.31EV (JPY) (B)3,286.84 In addition to the de-consolidation of Fill-Finish losses, we expect Forge’s fixed cost leverageand margins to benefit from synergy with the Althea Drug Production operations transferredto Forge in late August 2024, as well as incremental customer acquisition. Over the mediumterm, Forge management plan to expand development operations to non-rare diseases,increasing their TAM as a result. Key incremental catalysts:in mid 2025, Life Biosciences (one of Forge’s largestcustomers) plan to file an IND to commence human trials on their Glaucoma therapiesfor conditions affecting up to 10% of the over 75 year old population; Q4 2025, anotherkey customer, Affinia, intend to commence human clinical trials for their AFTX-201Cardiomyopothy therapy, a condition affecting 7,000 patients in the US, UK and Europe. Investment Implications We rateAjinomoto Outperformand have raised ourPrice Targetto¥4,300reflecting theAmericas BP uplift, while maintaining our target EV/EBITDA at 14.5x applied to our forwardNTM+1 EBITDA estimate of JPY315b (link: model). DETAILS Ajinomoto’s global healthcare business (excluding Functional Materials / ABF) will generate c. ¥7.6b of Business Profit, andwill account for c. 5% of overall BP in FY3/25 by our estimates (Exhibit 4). EMEA Healthcare (Omnichem), Japan Healthcareand Asia Healthcare are all profitable, while the Americas business will lose c.¥4b in FY3/25 as a result of the Althea Fill-Finish business which we now know is heavily loss making, and Forge Biologics gene therapy (acquired late 2023) which is stillramping up its customer base following major capacity build out. In FY3/24, Althea Business Profit losses amounted to ¥1.3b with Fill-Finish losing ¥3.7b, while the Drug Production operationsgenerated ¥18.0b of revenue and ¥2.2b of Business Profit in the period (3.6% margin) based on the latest disclosure in the Fill-Finish sale announcement (Exhibit 5). In FY3/25, we estimate that the Fill-Finish losses narrowed to ¥2.4b following 71 layoffsundertaken in September 2024 (see: Ajinomoto: US Healthcare restructuring kicks into gear), and we estimate that the DrugDevelopment margins reached 8.8% in FY3/25. We have re-built our segmental US Healthcare divisional model to reflect the sale of the loss making Fill-Finish operations, andhave increased our FY3/26 BP estimate from ¥3.2b to ¥4.5b as a result. We have increased our FY3/26 Americas BP estimateby 6%, our Overall Ajinomoto BP estimate by 1%, and our overall ROIC estimate by 15bps to 7.6% (Exhibit 2). EXHIBIT 3:We expect FY3/26 US Helathcarte margin enhancement to be driven by increased fixed cost leverage atForge and the expected sale of the loss making Althea Fill-Finish business Forge Biologics is a gene therapy focused CDMO, founded in 2020. In the 12 months to December 2023, Forge generated US$30m of revenue and posted a US$39m EBITDA loss. Ajinomoto’s Bio-Pharma Services acquired 100% of Forge on December21st 2023 (right at the end of Ajinomoto’s Q4 FY3/24) for US$545m (¥82.8b). Ajinomoto is targeting EBITDA breakeven for Forge by the end of FY3/26, driven by a combination of cost synergy with theAlthea Drug Production operations that have been transferred to Forge since late August 2024, reaching human clinical trialmilestones for key gene therapy customers, and incremental gene therapy customer acquisition. In a January 2025 interview, Forge’s CEO also indicated that the company intends to expand therapeutic discovery operationsfrom rate diseases to non-rare diseases, increasing Forge’s TAM as a result. KEY FORGE CATALYSTS In December 2023, Forge had 43 existing customers, and this had increased to 46 by June 30th 2024 according to Ajinomoto’sresults presentations. As of January 2025, the roster had exceeded 50 customers according t