Menya Musashi vs Ajisen

I can't quite figure it out. Why is Menya Musashi so much better than Ajisen? I'm referring to their ramen. Menya Musashi's offer a range of "white", "black" and "red" ramen. The "red" ramen is probably for the masochists. I go with the "black" - it has a strong onion flavour. Burp.

The more cozy look and feel of Menya Musashi outlets are a lot more interesting, giving a more Japan-like "feel". Even the service staff seems a lot more motivated. Perhaps the smaller stalls allow them to provide a more steady rate of service? Or maybe they are better paid?

Or perhaps it's just the locales. Different place, different service?

Both are part of Japan Food Holdings. I think they should just consider replacing the Ajisen's with Menya Musashi's.

Japan Food hasn't been doing well of late on the stock market. It has been going downhill all the way for months. Yet, the company is holding steady with its revenue, although profitability has fallen. Dividend remains good, although nearly equivalent to its earnings. It has remained profitable.

Food is such a competitive market and is totally sensitive to labour costs. Given Singapore's labour shortage, it is quite a challenge for such businesses. It needs to find more productive ways of delivering the service.

I wonder if those 3-4 men shops that serve out ramen with long queues flowing out of the stores which I experienced in Tokyo may be a better deal? Rental is the other killer given our property prices.

Productivity, finding the next boundary to leap over. May be easier to catch a Pokemon?

Boteyju San - satisfying a crave for Japanese food

Tuesday was Deepavali. It was great to have yet another public holiday to take things easy. Zen. Happy Dewali to our friends.

I've yet to satisfy my craving for Japanese food despite having gone for a week's sojourn in Tokyo two months ago. Having no other plans for the day, wifey and I decided to give it a go at a Boteyju San restaurant at Star Vista.

Guess we were early. The restaurant wasn't crowded and we managed to get a table for the three of us. I noticed the restaurant was largely laid out for 2-seaters. Perhaps that's more of their typical clientele. Like many such restaurants, orders were placed using a Tablet (iPad?).

I ordered a mixed set which came with servings of wagyu beef, salmon and chicken, along with some potato and vegetables. Tasty enough, although the beef was a tad overcooked.

My daughter ordered the garlic fried rice. It was really tasty! Fragrant.

Wifey went for the yakisoba. It was quite good as well.

The main feature was probably the okonomiyaki which I believe this restaurant is famous for. It didn't disappoint. Might have been more fun though if we could have done some self cooking for this. Kind of remembered the fun we had when we did this previously in Japan, even if we couldn't communicate a word at all with the Japanese staff then who spoke no english! All we needed was a smartphone with a language translator! A life saver to break down language barriers.

What's this got to do with investment or finance? Not much, except maybe the point that we have to enjoy life even as we save towards a financial future. Ok, ok, that's perhaps a wee bit cheesy?

Actually, there is a link. But it wasn't the reason that led me to patronise this restaurant. It was a discovery after the fact, and therefore totally serendipitous. As I was paying for the meal, I discovered with some glee that this restaurant is actually part of a chain for which I had a discount card. 10% discount is no small amount. Thank you Japan Foods!

As a stock though, Japan Foods hasn't been great for me so far. I guess the food industry is a difficult one as there is much competition. Labour in Singapore is expensive. But I do note that Japan Foods makes use of technology to streamline its operations. Its service staff standard isn't as great though, so there's much room for improvement.

Still, the discount card hasn't been a bad thing. Slurp slurp, munch munch.

Related:
Japan Foods - Ajisen Discount

4 Ways to Reduce Spending (aka Spend to Save?)

Spend to Save? That's a tagline that's such an oxymoron. But here goes with my 4 ways to reduce spending.

Credit Cards

Dr Wealth shared about 6 ways to reduce monthly expenses without compromising lifestyle. One idea was to use credit cards whenever we can so that we can score points and benefit from the card discounts. He also made an important point that this would go well only if one has the discipline to pay off in full each month, and not to allow ourselves to fall into the debt trap. It's really a silly idea to owe credit card debts. It's a downhill spiral that squeezes away our hard earned money paying interests. Worse, it's easily 24% per annum! I'm pretty disciplined.

I use a few Visa credit cards and found several to be good deals. The UOB One card and the Citibank Dividend card offer various cash rebates. Comes in the form of either a quarterly cash-back to offset the bills, or credits to offset the next payment at selected merchants. So I use the credit cards wherever possible for payments and have benefited substantively from these rebates. It all adds up. Worth a thought?

And, be stingy. Don't pay the annual card fees. The banks are going to hate me for this. Seek the waiver when the fee is due. Often, it's just a phone call away. Most banks have automated this process. I'm not even going to agree to pay half. They've always waived the fee, so long as there has been some spending. I'm 'ngiaow'.

Groceries

We need to buy groceries and numerous household items on a regular basis, unless you're the type of family that doesn't even cook at home. One of my brothers is like that. He has a fetish about keeping the whole house clean, all the time. We say he's "ko tak". His kitchen is really a museum, for display only.

I believe the wider community of modern working class is almost certainly going to buy a lot of stuff from the supermarkets. Their omni-presence and ubiquity is really a blessed convenience. Thank god for urbanisation! Whether it's NTUC, Cold Storage or any of the smaller chains, I guess we'll shop. When spoilt for choice, parking convenience, store crowded-ness, cleanliness, variety and freshness of food are perhaps other considerations by which we differentiate them.

I would advise, go get the darn NTUC Fairprice Card if you're shopping at NTUC supermarkets frequently. The points really add up very quickly. And it gets bigger, the bigger your family is. The points are redeemable to offset against payments and can be done at their check-out lines. Quite convenient, really. Except, when the cashier happens to be blur. Which happens, often enough. The elderly aunties (cashiers), sometimes a bit lost with technology. Forgive them, they're earning a tough living. Try again with a different cashier next time. The money is still there. Or as my daughter would say, "Chill."

And speaking of "chill", for Cold Storage, use the Citibank Dividend Visa Card. It's a few percent worth of rebate.

I'm sure there are many more options like these.

Restaurants

Credit cards often have offers for restaurants. Many restaurants also offer their own membership cards. I mentioned before the pleasant surprise I had when I bought shares in Soup and Japan Foods. Both offer their store discount cards to shareholders. See (1) Soup Restaurant - Slurping with a Discount and (2) Japan Foods - Ajisen Discount. The discounts feel like a form of dividend aren't they? Slurp slurp.

Transportation

And finally, transportation. Need to travel right? Our legs can only take us so far.

If you commute by train, you might want to sign up with Travel Smart Rewards.  It used to be called InSinc (see Insinc with the Times). Points are generated based on the time of travel on the MRT. These points are then spun in a snake-and-ladder game to generate prizes. Prizes are good and seems frequent enough. I've been receiving a few dollars a month. They have enabled a crediting arrangement so that the winnings can be credited into your bank account directly.

If you drive, then back to using your credit card. I get additional discounts when I use the Citibank Dividend Visa Card to pay for petrol at Shell stations, along with the Shell Card for points (redeemable rebates). I've a Shell station right round the corner, so that works really great for me. Again, there are various credit cards with similar arrangements with different petrol stations. Pick one that works for you.

Concluding Remarks

So there you have it, 4 ways to reduce spending. It's coming to lunch time. Time to go fetch my daughter and to run some errands. Let's see now, supermarket, lunch, petrol, and ...

Disclaimer: As far as buying the above shares go, study the companies carefully and make your own decision. The price may not be right. I'm not advocating a buy or sell. I bought Soup way back when it's price was far lower.

Japan Foods - Ajisen Discount

Bought Japan Foods a few days back after having watched this stock for some time. Guess I'm still very much in a Japan mood after visiting the land of the rising sun on a holiday recently. Is this a bias effect?

The company appears to be in a growth phase with reasonably good margins. Scale likely matters in such a business. It appears to be expanding with some initial footprints in various Asia-Pacific countries. Its latest annual report hinted at likely expansion of its overseas outlets.

Financials appear reasonable, though not necessarily with much margin of safety at the moment. Numbers are suggestive of its growth. DPS and EPS has continued to rise year on year after an initial dip, with dividend standing at 2.8%, and more coming. Total dividend payout for 2014 is expected to be 2.6 cents in total, representing a total of 53% of net profit. The Board intends to recommend dividends of at least 40% of the Group's consolidated net profits, an increase from its current 35% level. With that, it has maintained a steady year-on-year increase in its dividends paid out.

Interestingly, the founder, Takahashi Kenichi, who is still driving the company was a mechanical engineer.  And he continues to hold the majority stake of almost 66% in the company. His pay for FY2014 was $716,000, of which 64% was bonuses.

Stock Data
Market Capitalization (SGD 'mil)	107.88
Common Shares Outstanding ('mil)	173.4660
52 Week High (SGD) (28/11/2013)	0.815
52 Week Low (SGD) (16/10/2013)	0.470
52 Week Return (%)	32.860
Average Volume ('mil)	0.0176
Beta	0.02

Financial strength
Current Ratio	2.79
Quick Ratio	2.71
Long Term Debt to Equity (%)	-
Total Debt to Equity (%)	-
Interest Coverage Ratio (TTM)	-
Free Cash Flow to Firm (TTM) (SGD 'mln)	2.80

Margin
Gross Margin (TTM) (%)	81.59
Operating Profit Margin (TTM) (%)	13.70
Net Profit Margin (TTM) (%)	11.64

Dividend §
Annual Dividend per share (SGD)	0.0073
Dividend Yield (TTM) (%)	2.80
Dividend Yield (Annual) (%)	2.80
Payout Ratio (TTM) (%)	53.04
3-Year Growth Rate (%)	18.10

Valuation
Historical P/E Ratio	14.71
P/E Ratio (TTM)	14.71
P/BV (latest interim)	3.66
BVPS (latest interim) (SGD)	0.1693
EPS TTM (SGD)	0.0421

Ratios & Other data
ROA (%)	21.48	10.15	13.86	20.57	20.14
ROE (%)	40.16	16.08	19.60	28.18	26.85
DPS (SGD)	0.0033	0.0045	0.0066	0.0127	0.0073
EPS (SGD)	0.0288	0.0150	0.0215	0.0370	0.0421

Peer Comparison Ø Industry Peer ROA(%) ROE(%) P/E P/BV EPS DPS Div Yield(%) Japan Foods Holding Ltd 18.43 24.18 14.71 3.66 0.0421 0.0073 2.80 ABR Holdings Limited 5.19 6.80 18.07 1.60 0.0408 0.0250 3.29 Neo Group Ltd 16.66 35.45 21.16 6.61 0.0444 0.0267 2.84 Sakae Holdings Ltd 4.57 8.59 14.30 1.49 0.0384 0.0200 3.64 Soup Restaurant Group Limited 13.33 18.14 145.57 4.65 - 0.0075 - [Source: POEMS, dated 9 Jul 2014]

From the peer comparison, Japan Foods stands up well in terms of its ROA and ROE.  Its P/E is at a more reasonable level compared to the rest.  In terms of P/BV, it appears to be in the same league as Neo Group and Soup Restaurant, commanding a premium.

What came as an unexpected added surprise was this:

Ownership of the shares came with an Ajisen Family Card that offers various discounts at their restaurants (largely at 10%), though only valid for a year. Cool, nonetheless! And I thought Soup Restaurant was the only one that did this (Soup Restaurant - Slurping with a Discount).

I'm not too impressed with Ajisen Ramen itself though. Have tasted better. Food tends to be too oily. Fruit Paradise is interesting. Its outlet at VivoCity used to be packed. It seems a lot quieter these days though. Have not had the opportunity to try its other bands.

Disclaimer: This is not a call to buy or sell. Make your own assessment before investing.