[Click eStock] "CJ Daehan Tongun Offsets Costs with Price Increase"

[Asia Economy Reporter Eunmo Koo] DB Financial Investment estimates that CJ Logistics' sales in the fourth quarter of last year reached 3.0736 trillion KRW, marking a 9% increase compared to the same period last year, and operating profit rose by 3% to 105.9 billion KRW. Kim Pyeongmo, a researcher at DB Financial Investment, explained in a report on the 8th, "The parcel delivery sector continued to perform well in the fourth quarter of last year," adding, "CJ Logistics' parcel volume in October and November last year increased by 23% year-on-year, and despite the rise in the proportion of small parcels, the ASP decline was limited to around 1% due to the effect of charging appropriate prices for parcel delivery." He further projected, "With the increase in parcel volume and continued improvement in the performance of overseas subsidiaries in the global division, the fourth-quarter results last year are expected to meet consensus."

It is assessed that a price increase is imminent. Since the end of last year, the government has been reviewing measures such as raising parcel delivery fees and limiting transportation hours to prevent overwork and safety accidents among parcel delivery workers. CJ Logistics has been continuously increasing parcel sorting personnel to reduce the sorting time for delivery workers. In conjunction with regulatory changes by the government, CJ Logistics is expected to raise parcel prices, which will also lead to an increase in delivery workers' fees.

Assuming a 5% increase, the parcel price would rise by about 80 KRW. Researcher Kim said, "Through the increased parcel fees, CJ Logistics will be able to cover most of the increased costs related to higher delivery fees and sorting operations," and added, "This year, the CL division is also expected to gradually improve due to factors such as increased automobile exports."

The investment opinion was maintained as 'Buy,' and the target stock price was raised to 230,000 KRW. Researcher Kim explained, "Concerns about increased labor costs related to safety and sorting will be alleviated by the price increase," and emphasized, "Attention should be paid to the performance improvements expected to continue through this year."

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