[Click eStock] "CJ Daehan Tongun, Early Normalization of Global Business Unit Performance"

NH Investment & Securities Issues 'Buy' Rating and Sets Target Price at 220,000 Won... Closing Price on 16th at 177,500 Won

[Asia Economy Reporter Kum Boryeong] An analysis has emerged that CJ Logistics' global business unit performance is normalizing early due to the global economic recovery and the recovery of consumption in major markets.

According to NH Investment & Securities on the 17th, CJ Logistics' third-quarter performance is estimated at KRW 2.8687 trillion in sales and KRW 102.3 billion in operating profit. These figures represent increases of 9.4% and 15.3%, respectively, compared to the previous year. Researcher Jeong Yeonseung of NH Investment & Securities explained, "Strong performance is expected due to increased parcel volume and recovery in the global sector's results," adding, "With continued efforts to control non-operating expenses, net profit is projected to grow 510% year-on-year to KRW 36.7 billion."

In the third quarter, due to e-commerce and increased untact demand caused by COVID-19, parcel volume is expected to increase by more than 20% compared to the previous year in the second half. Strengthening cooperation with e-commerce platform company Naver and expanding the fulfillment market have also improved CJ Logistics' status from a simple parcel delivery company to a logistics partner. Due to physical parcel transport capacity limits, parcel companies' pricing negotiation power is also strengthening.

Researcher Jeong said, "Parcel volume, which had been sluggish due to COVID-19, is gradually recovering. The recent strong demand for air cargo and rising container freight rates are seen as freight rate increases due to global volume recovery," adding, "The strong performance of global logistics company FedEx also indicates economic recovery."

He continued, "Due to the increase in parcel volume, CJ Logistics' global (overseas subsidiaries) performance has normalized early. In particular, the subsidiaries in China and the United States, where consumption is robust, are showing strong results," adding, "Considering that uncertainty in the global business unit's performance was a risk factor despite strong parcel demand, this is a process of risk reduction."

NH Investment & Securities gave CJ Logistics a 'Buy' investment rating and set a target price of KRW 220,000. The target price was raised from the previous KRW 190,000. The closing price on the 16th was KRW 177,500.

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