(Yicai Global) March 21 -- Ajisen (China) Holdings Limited, China subsidiary of well-known Japanese chain brand Ajisen Ramen, lost CNY487 million (USD77 million) last year due to the change in the value of its equity in Baidu Waimai, a takeout food platform previously operated by internet giant Baidu Inc.
Ajisen China's operating revenue hit CNY2.33 billion, down by 2 percent year-on-year, and its net loss reached CNY487 million, said its 2017 annual report released today. However, it posted net profit of CNY276 million, without taking into consideration the change in its investment return on Baidu Waimai.
Ajisen China invested USD60 million in Baidu Waimai in 2015, acquiring less than 10 percent of the equity. When the market valuation of Baidu Waimai surged to over USD2 billion in 2016, Ajisen China's investment yielded substantial return.
However, the leading takeout platform Ele.me, established by Shanghai Rajax Information Technology Co., purchased Baidu Waimai for over USD600 million last year, nearly 70 percent lower than its value in 2016. Affected by the transaction, Ajisen China's investment return on the project declined significantly.
Ajisen China continued developing its core business with the funds obtained from the sale of equity in Baidu Waimai. The annual report showed that the company restarted its expansion operation in China last year, opening 54 new outlets to bring the total to 704. It gave up on its earlier target of opening 1,000 outlets in five years, which it announced in 2010, due to poor performance.