[Click eStock] "CJ CheilJedang, Valuation Reassessment Needed"

NH Investment & Securities Presents 'Buy' Investment Opinion and Target Price of 600,000 KRW... Closing Price on 30th Last Month Was 381,000 KRW

[Asia Economy Reporter Kum Bo-ryeong] There is an opinion that a valuation reassessment of CJ CheilJedang is necessary.

On the 4th, NH Investment & Securities gave CJ CheilJedang a 'Buy' rating with a target price of 600,000 KRW. The closing price on the 30th of last month was 381,000 KRW.

NH Investment & Securities estimated CJ CheilJedang's logistics-excluded sales for Q4 last year at 3.4777 trillion KRW and operating profit at 213.4 billion KRW, representing increases of 4.6% and 24% respectively compared to the previous year. Researcher Jo Mi-jin of NH Investment & Securities explained, "The bio sector is expected to see double-digit increases in both the price and sales volume of feed additive amino acids such as lysine and tryptophan."

Despite the base effect burden caused by the timing difference between Chuseok and Lunar New Year holidays, the domestic processed food sales growth rate is expected to be in double digits. Although recent won appreciation has prevented overseas growth from being fully reflected in performance, the rise in raw material prices is offsetting this.

Researcher Jo said, "A valuation reassessment is necessary due to fundamental improvements," adding, "2021 is expected to be the first year when collaboration with Schwan's fully begins. Bibigo dumplings will expand new entry contracts with mainstream retailers starting with Target and Walmart, securing over 50% coverage in the U.S." Sales of Bibigo dumplings in mainstream frozen end displays are recognized as Schwan's revenue.

Jo further stated, "The bio sector is expected to maintain double-digit operating profit growth based on industry improvement and high cost competitiveness. Additionally, business expansion into the biodegradable plastics market is positive not only for performance but also from an ESG (Environmental, Social, and Governance) perspective," and added, "Despite overall performance and strength improvements, the 2021 price-to-earnings ratio (PER) is only 10 times, indicating excessive undervaluation."

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