April 3, 2007
Ajinomoto shares soar on upgrades, high lysine prices
Shares of Ajinomoto Co., the world's biggest maker of amino acid food additives, had their sharpest gain in almost seven years after analysts upgraded the company as prices for its lysine products are seen to rise.
The stock rose 148 yen, or 11 percent, to 1,504 yen in Tokyo, its best one-day gain since April, 24, 2000. The company was the biggest gainer on the Morgan Stanley Capital International World Index.
Ikuko Furusho, a spokeswoman at Morgan Stanley, confirmed that analyst Taizo Demura raised Ajinomoto's rating to "overweight'' from "equalweight.'' Furusho declined to state the revised target price for the stock or the reason for the upgrade.
Nikko Citigroup analyst Nobuyoshi Miura upgraded Tokyo-based Ajinomoto to "hold'' from "sell" on March 30, stating lysine prices are expected to rise later this year to boost the company's sales. Germany's BASF AG, the world's largest chemicals maker, said on March 30 it will shut an amino acid factory in South Korea this year. For this reason, Miura raised his target price for Ajinomoto to 1,450 yen from 1,100 yen.
Lysine is an amino acid used as a protein source for livestock feed. Sales of amino acid products comprised 30 percent of Ajinomoto's sales last year.
On March 27, Ajinomoto cut its net income forecast for the year ending March 31 16 percent to 30 billion yen, citing higher- than-expected raw materials costs.
Note: US$1 = 118.22 yen