[Click eStock] "CJ Daehan Tongun, Gets Better and Better in the Second Half"

Daishin Securities Report

[Asia Economy Reporter Minji Lee] Daishin Securities maintained a buy rating and a target price of 250,000 KRW for CJ Logistics on the 6th. This is based on the expectation of additional growth in the second half of the year, considering the rising average unit price and the possibility of the Korea Post discontinuing its private parcel delivery business.

Looking at CJ Logistics' expected performance for the second quarter, sales are projected at 2.9288 trillion KRW and operating profit at 108.2 billion KRW, representing growth of 10.3% and 29% respectively compared to the same period last year. By business segment, contract logistics (CL) sales are estimated to reach 639.6 billion KRW, a 4% increase year-on-year. The parcel delivery segment is expected to grow by 16% to 906.6 billion KRW, while the global and construction segments are forecasted to grow by 11% and 3%, reaching 1.1788 trillion KRW and 197.8 billion KRW respectively.

Parcel delivery volume in the second quarter is expected to increase by 7.2% year-on-year to 453.6 million boxes, with the unit price rising 8.5% to 1,999 KRW. Notably, parcel volume in April and May grew by about 6%, and the average unit price increased by 9% compared to the same period last year. Ji-hwan Yang, a researcher at Daishin Securities, stated, “Although the overall volume growth in the second quarter is somewhat lower than previously estimated, the average unit price is showing a much stronger upward trend,” adding, “Second-quarter results are expected to surpass market expectations.”

The trend of improving performance is expected to strengthen in the second half of the year, as the Korea Post's discontinuation of its private parcel delivery business is anticipated to be the biggest beneficiary. The lack of automation facilities among competitors and strong demands for additional sorting personnel also suggest the possibility of further unit price increases, which is positive.

Researcher Ji-hwan Yang analyzed, “The e-commerce business segment is expected to experience significant external growth,” and added, “The delivery wars among retailers and moves toward service differentiation will contribute to valuation expansion for companies leading in delivery competitiveness and fulfillment business.”

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