Food & Life Cos. (3563.T): Briefing on recent share price: Confirms no signs of slowdown in China; Buy

Food & Life held a briefing with sell-side analysts after the market close on September 18. The company cited three main factors behind the -18% share price decline over the past two weeks: (1) not being selected as a Nikkei 225 constituent; (2) market concerns that FY9/27 guidance, due in November, will be conservative as in the past; and (3) a plateauing of margins. On (2), the company's policy is to not be overly conservative and to present realistic, achievable figures. On (3), it explained this reflects strategic groundwork for business expansion, and it remains committed to maintaining or improving the companywide operating margin (including overseas) over the next medium-term plan. Food & Life said news reports suggesting a slowdown in same-store customer traffic in China are not accurate, and actual August and first-half September figures show no sense of a slowdown. The hygiene reputational issue at a Beijing store has not affected earnings so far, and the impact of rising tun