[Click eStock] "CJ Daehan Tongun, Rapid Parcel Growth... Operating Profit Exceeds Market Expectations"

[Asia Economy Reporter Park Jihwan] Daishin Securities maintained a 'Buy' rating and a target price of 210,000 KRW for CJ Logistics (000120), stating that despite the impact of the novel coronavirus disease (COVID-19), the parcel delivery segment continues to experience rapid growth.

Researcher Yang Jihwan of Daishin Securities said, "The parcel volume, which increased by 29% in the first half of this year, is estimated to grow by about 26.5% in the third quarter," adding, "Despite the implementation of 'No Parcel Day' on August 14 and the traditional vacation season, the social distancing level 2.5 due to the resurgence of COVID-19 led to a continued increase in parcel volume." He explained that the leverage effect from the increase in parcel volume and improved profitability are expected due to increased efficiency in handling small parcels through expanded Multi Point investments.

The global segment, which was sluggish in the first half, is expected to normalize profitability with the normal operation of overseas subsidiaries. There is also an analysis that additional cooperation with NAVER related to the fulfillment business is anticipated.

Researcher Yang forecasted, "CJ Logistics' third-quarter earnings this year are expected to slightly exceed market expectations," and "Operating profit is expected to surpass market expectations at 99.3 billion KRW."

He added, "Warehouse leasing and MP investment expansion for the fulfillment business growth are expected to serve as factors confirming differentiated growth and profitability compared to the second-largest competitors."

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