Ajinomoto (2802): 2Q results: Still room for ABF overshoot, but earnings and shareholder returns miss expectations

Although ABF did better than expected, 2Q business profit fell short of our estimate on CDMO production losses. Management raised full-year guidance, but it falls short of the consensus estimate and ours. We see room for ABF to overshoot 2H guidance, but the results are unlikely to raise market expectations further, and the absence of a new share buyback announcement is also somewhat disappointing. 2Q business profit was ¥48.5 billion, up 23% YoY but below our ¥51.7 billion estimate; functional materials led by ABF and seasonings & foods beat, while CDMO and frozen foods missed. FY2026 business profit guidance was raised from ¥202 billion to ¥210 billion. We maintain Overweight with a December 2027 price target of ¥6,800.