[Click e Stocks] "CJ CheilJedang, Solid Performance... Positive Active Investment"

[Asia Economy Reporter Song Hwajeong] Hana Financial Investment evaluated that CJ CheilJedang's active investment moves will have a positive impact on enhancing corporate value in the mid to long term, maintaining a 'Buy' rating and a target price of 620,000 KRW on the 9th.

CJ CheilJedang's Q3 performance this year met market expectations. On a consolidated basis for Q3, sales increased by 8.1% year-on-year to 6.8541 trillion KRW, and operating profit rose by 7.7% to 433.2 billion KRW. Sim Eunju, a researcher at Hana Financial Investment, explained, "Excluding logistics, sales increased by 12.7% to 4.2243 trillion KRW, and operating profit rose by 3.4% to 322.2 billion KRW, meeting market expectations. Domestic and overseas processed food sales grew by 5%, showing a solid performance despite the high base last year, and overseas sales grew by 11.8% due to category expansion and recovery of Schwann's B2B channel." She added that bio sales volume increased due to recovery in pig farming numbers in China and demand for dining seasoning, but operating margin decreased compared to the previous quarter due to a sharp rise in global maritime freight rates. The bio-resources segment showed a profit contribution of around 10 billion KRW as pork prices in Vietnam began to decline significantly.

The active moves for new growth are evaluated positively. CJ CheilJedang announced the acquisition of a 75.82% stake in the Dutch bio contract development and manufacturing company Batavia Bioscience (Batavia) for 267.7 billion KRW the day before. Researcher Sim said, "CJ Group announced plans to invest 10 trillion KRW in growth engines over the next three years, and CJ CheilJedang will expand its business areas into global food and red bio. Considering the EBITDA level (about 2 trillion KRW) this year and next year excluding CJ Logistics, the annual scale of new investments is estimated to be between 800 billion and 1 trillion KRW," she analyzed.

There is an opinion that the stock price is undervalued. Researcher Sim said, "CJ CheilJedang has leveled up its corporate value through successful mergers and acquisitions, and its active investment moves will positively affect mid- to long-term corporate value enhancement. Considering its leap to a global company, the current stock price, trading at around 10 times the 12-month forward price-to-earnings ratio (PER), is very undervalued."

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