[Click eStock] "CJ Daehan Tongun, Surge in Delivery Volume Due to COVID-19... Buying Expansion"

[Asia Economy Reporter Minji Lee] Daishin Securities maintained a buy rating and a target price of 210,000 KRW on CJ Logistics on the 16th, expecting favorable first-quarter earnings due to increased parcel volumes amid the COVID-19 pandemic.

CJ Logistics' estimated first-quarter revenue is expected to reach 2.5896 trillion KRW, a 6.4% increase compared to the same period last year. Operating profit is anticipated to record 87.4 billion KRW, up 92.9% year-over-year.

By business segment, contract logistics (CL) revenue is expected to decline by 3% year-over-year to 604.4 billion KRW. The parcel delivery and global segments are projected to increase by 22% and 3%, reaching 752.5 billion KRW and 1.0527 trillion KRW, respectively, during the same period.

Researcher Yang Jihwan of Daishin Securities stated, “The global business segment’s growth rate is expected to slow due to disruptions in forwarding and the Chinese subsidiary’s operations during the Lunar New Year holiday. While the CL and global segments are forecasted to underperform due to COVID-19 impacts, the surge in parcel volumes from February will offset this with improved parcel delivery segment performance.”

The company’s expected parcel volume for the first quarter is projected at 367 million boxes, a 19.8% increase year-over-year, significantly exceeding the previous forecast of 340 million boxes.

From the second quarter, normal business activities of the Chinese subsidiary are also anticipated. Researcher Yang explained, “Although the Chinese subsidiaries experienced operational disruptions in the first quarter, normalization of global segment operations is expected from the second quarter onward. Additionally, the company plans to secure approximately 70 billion KRW in cash within the year through real estate sales.”

This content was produced with the assistance of AI translation services.