CJ CheilJedang Soars Past 400,000 Won with Wings Given by COVID-19...

[Asia Economy Reporter Eunmo Koo] The novel coronavirus disease (COVID-19) has accelerated growth in the domestic and international food sectors, centered on Home Meal Replacements (HMR), giving wings to CJ CheilJedang's stock price.

According to the Korea Exchange on the 14th, CJ CheilJedang's stock price closed at 400,000 KRW, up 2.56% (10,000 KRW) from the previous trading day. This is the first time in about 2 years and 7 months since December 15, 2017 (401,000 KRW) that CJ CheilJedang's stock price has recovered to 400,000 KRW based on the closing price.

Recently, CJ CheilJedang's stock price has been soaring relentlessly. It has risen 22.7% this month alone up to the previous day, and since the low point in March, it has increased by 158.0%, continuously following an upward trajectory. On this day as well, it rose to 414,000 KRW in early trading, setting a new 52-week high and continuing its upward momentum.

Due to the impact of COVID-19, demand for processed foods centered on HMR has been continuously increasing, which is interpreted as reflecting expectations for CJ CheilJedang's performance in its stock price. In the domestic processed food sector, sales and operating profit are expected to improve evenly as the operating rate of the Jincheon plant rises due to increased HMR demand.

Prior to this, CJ CheilJedang proactively expanded facilities by establishing the Jincheon Food Integrated Base in June 2017 to respond to the rapidly growing HMR demand and has strengthened market dominance through promotional activities. Sanghoon Cho, a researcher at Samsung Securities, said, "In this process, while focusing on sales, operating profit fell short of market expectations over the past 3 to 4 years, but from this year, a profitability-focused management strategy will shine and enter a profit recovery cycle."

The strong performance of the bio sector is also a major factor boosting expectations for second-quarter results. From February to April, the selling prices of major amino acids rose due to production and logistics disruptions at competitors, but CJ CheilJedang had factories at key locations and maintained safety stock, so production was not disrupted. Jeongeun Lee, a researcher at Korea Investment & Securities, explained, "CJ CheilJedang has conducted numerous contracts at higher prices, and the effect of both improved prices and sales volume will be reflected in this quarter."

Consequently, expectations for second-quarter performance are naturally expanding. According to financial information provider FnGuide, CJ CheilJedang's sales for the second quarter of this year are estimated at 5.9408 trillion KRW, a 7.7% increase compared to the same period last year, and operating profit is expected to grow 47.1% to 257.9 billion KRW.

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