[Click eStock] CJ CheilJedang, 'Post-Corona' Earnings Improvement... NH Maintains "Top Pick"

[Asia Economy Reporter Ji Yeon-jin] NH Investment & Securities announced on the 11th that it has maintained a buy rating and the top pick within the sector for CJ CheilJedang, expecting continued earnings improvement following an earnings surprise in the first quarter of this year, and raised the target price from 600,000 KRW to 700,000 KRW.

Jomi Jin, a researcher at NH Investment & Securities, said, "Although there were concerns about a slowdown in growth rate and a decline in profitability due to the high base last year from increased food demand caused by COVID-19, quarterly growth and profitability improvements are expected to continue," adding, "The bio division is expected to reflect profitability improvements from the anticipated spot price increase more fully in earnings from the second quarter onward."

CJ CheilJedang's first-quarter sales excluding logistics reached 3.6711 trillion KRW, up 5.4% year-on-year. Operating profit was 342.3 billion KRW, an increase of 55.5% over the same period. This exceeded the operating profit forecast (260 billion KRW) by more than 30%. The food and bio resource divisions achieved operating profits higher than expected.

The domestic processed food division saw profitability improvements due to an increased contribution from high-margin gift sets related to the timing difference of the Lunar New Year, as well as cost and promotion efficiency. Schwans and U.S. food businesses were affected by unfavorable exchange rates, while the bio division improved year-on-year results due to increased sales of high-margin products and spot price rises. The bio resource division saw a significant increase in operating profit as strong performance continued in Vietnam pork prices and Indonesian broiler chickens.

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