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5 Things To Know About Japan Foods Holding (SGX: 5OI), The Company Behind Ajisen Ramen, Menya Musashi, Konjiki Hototogisu And Other Japanese Restaurants

Menya Musashi, Konjiki Hototogisu, Afuri, Sho Ryu Ramen are all part of the same company

Singaporeans love our food and I love my ramen. Currently, one of my favourite ramen places is Afuri which I discovered on a random walk through Funan. Imagine my delight when I realized that I could use my existing JFH rewards points to claim an additional discount.

JFH stands for Japan Foods Holding and this is the company behind many well-loved Japanese restaurants in Singapore. Some of their restaurants include Konjiki Hototogisu – a 1-Michelin star ramen restaurant, Menya Musashi – known for its tsukemen or dipping-style ramen, Akimitsu – an award-winning tendon and tempura restaurant and Ajisen Ramen – its flagship brand.

Established in Singapore in 1997 and listed on the Catalist Board of the Singapore Exchange (SGX) in 2009, Japan Foods Holdings has restaurants all over Singapore. Due to the pandemic, the Group trimmed the number of restaurants to 50 as of 31 Mar 2020, a reduction of 9 restaurants from a year ago. While revenue and gross profit fall due to the dining prohibitions during Circuit Breaker and subsequent dining restrictions throughout the various Phases of safe management measures, the Group has maintained their gross profit at 84.7% with tight cost control measures and efficient uses of raw materials.

JFH has also expanded overseas with 9 restaurants in Hong Kong, 9 in China and one in Indonesia operated by associate companies under the under the Menya Musashi and Konjiki Hototogisu brands. They are also present in Malaysia through sub-franchisees of the Ajisen Ramen brand. Plans to expand further through a joint venture with Minor Food Group (Singapore), called Dining Collective, have been disrupted by the pandemic. The Group is now focusing on their local growth while maintaining a more cautious approach to overseas expansion until a more opportune time.

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For ramen lovers and interested investors, here are 5 things to know about Japan Foods Holding’s business.

For someone who is new to your company, can you explain (in as little words as possible) what Japan Foods does?

Japan Foods is one of the leading Japanese restaurant chains in Singapore that has a track record for innovative concepts and brands.  Its Executive Chairman and CEO, Mr Takahashi Kenichi, introduced Singapore’s first ramen chain –  “Ajisen Ramen”, which was franchised from Japan and popularised the ramen culture here.  Today the Group has more than 50 restaurants under 15 franchised and self-developed brands in its portfolio, including “Osaka Ohsho”, “Menya Musashi”, and “Konjiki Hototogisu” which earned one Michelin Star in Tokyo in 2019.

Going digital/technological innovation is seen as a requirement to remain a viable business. What are some ways the Group is “disrupting” itself?

Our Executive Chairman and CEO, Mr Takahashi Kenichi, is an engineer by training and he is quick to embrace automation and technology to increase efficiency and productivity.

We were one of the first restaurant chains to adopt an iPad self-order system to address the manpower crunch that the F&B industry constantly struggles with.  This enabled us to reduce the number of staff per restaurant but yet at the same time free the staff to serve the food to the tables faster.

Increasingly, we have also been using delivery apps.  Although we still derive the bulk of our revenue from dine-in customers, we cannot ignore the fact that food delivery is rising partly because of convenience and also because this is a trend that has emerged as a result of restricted movements during the Covid-19 pandemic.

Describe the Group’s financial performance over the past few years

Our revenue has grown steadily since our IPO in 2009 and despite the onset of COVID-19 pandemic, the Group achieved record revenue of S$68.4 million for the financial year ended 31 March 2020 (FY2020).

During the subsequent financial year ended 31 March 2021 (FY2021), lockdown measures to curb the pandemic led to devastating impact on the F&B industry. Dine-ins, which contribute the bulk of our sales, were prohibited for several months and we had to rely on takeaways and deliveries. At the same time, the number of operating restaurants fell from 59 in FY2020 to 50 in FY2021 as the Group decided not to renew some leases in view of the situation. As such, our revenue declined to S$51.0 million in FY2021.

Cushioned by various government grants, which amounted to S$10.3 million (registered as Other Income), the Group’s net profit attributable to equity holders came in at S$3.6 million in FY2021 as compared to S$1.0 million in FY2020. Despite the ongoing and fluid COVID-19 situation, the Group’s financial standing remained strong in FY2021 with cash and cash equivalents of S$23.1 million with no borrowings.


What are some new consumer trends and behaviours you observed in recent years?

With growing affluence in Singapore, customers are demanding higher standards, better quality as well as more sophisticated and unique tastes.

To cater to these new trends, the Group brought in Tokyo ramen brand Konjiki Hototogisu in 2018, which at that time had already received mention in the Michelin Bib Gourmand Guide for three consecutive years and subsequently went on to receive one Michelin star in 2019. We received encouraging response when the chef owner of Konjiki Hototogisu introduced shellfish broths, instead of the usual tonkatsu (i.e. pork bone) broth, at our Singapore outlets.

There is an increasing demand for healthier options. In 2019, the Group added Afuri Ramen to our portfolio. It is a well-known brand among ramen aficionados for its unique and light citrusy yuzu-flavoured broth and very popular in Japan with ladies and those who are health conscious.

Another trend we observed is the rising popularity of “specialty” restaurants. Both Konjiki Hototogisu and Afuri Ramen cater to more discerning customers who seek out restaurants with a specialty. This is unlike Ajisen Ramen for example, which is popular among students and families because of the wide variety on its menu.

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What is Japan Foods’ value proposition to its shareholders and potential investors? What do you think investors may have overlooked about it?

Established market presence and brand recognition – Our Group Executive Chairman and CEO, Mr Takahashi Kenichi, introduced the Japanese ramen culture to Singapore with the launch of Ajisen Ramen, which became the first ramen chain in the country. Japan Foods now has over 50 restaurants under various established brands in Singapore as well as 19 restaurants overseas in Hong Kong, China and Indonesia through associate companies and one restaurant in Malaysia operated by a sub-franchisee.

Continuous innovation and introduction of new concepts – The Group has been launching at least one new brand every year. Our extensive brand portfolio of compelling dining concepts and proven formula for restaurant portfolio management has enabled the Group to remain resilient even during tough economic cycles.

Target annual dividend payout ratio of at least 100% – We are committed to protecting and growing the interests of shareholders who have invested in our Group.

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Editor’s Note: Some answers for this article were extracted from the SGX 10 in 10 series published on 6 July 2021 and have been republished with permission. You can read more on the SGX website.

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