[Click eStock] "CJ CheilJedang, Strong Earnings to Continue... A Buying Opportunity at Low Prices"

[Asia Economy Reporter Myunghwan Lee] Hana Financial Investment announced on the 23rd that it maintains a buy rating and a target price of 620,000 KRW for CJ CheilJedang. This is because the company is expected to continue strong performance this year, contrary to market concerns.

Hana Financial Investment estimated CJ CheilJedang's consolidated sales and operating profit for the second quarter of this year at 6.9644 trillion KRW and 482.1 billion KRW, respectively. These figures represent increases of 10.4% and 2.7% compared to the same period last year. Excluding the logistics sector, consolidated sales are expected to rise 12.8% year-on-year to 4.2379 trillion KRW, and operating profit is projected to decrease slightly by 0.7% to 377.1 billion KRW, exceeding market expectations.

The reason for continued strong performance despite increased cost burdens is attributed to solid processed food top-line growth and favorable bio market conditions. Domestic and overseas processed food sales remain robust, with domestic processed food sales expected to grow due to price increases and recovery in B2B (business-to-business) channels. Overseas processed food sales are also anticipated to achieve double-digit growth. Hana Financial Investment analyzed that the company is defending profitability through price pass-through and expanding market dominance.

Hana Financial Investment forecasts that CJ CheilJedang will continue strong performance this year, contrary to concerns. Consolidated sales and operating profit excluding logistics are estimated at 17.2104 trillion KRW and 1.3651 trillion KRW, respectively, representing increases of 9.3% and 15.8% year-on-year. This indicates that earnings estimates have been continuously revised upward since the beginning of the year. Despite cost pressures, profitability is expected to slightly improve due to high growth in domestic and overseas processed food sales, and the bio sector's favorable conditions are expected to continue until the end of the year. However, if grain prices fall next year, expectations for the bio sector should be lowered. Considering significant price increases in the second half of last year and this year, leverage effects in materials and processing are expected to be substantial.

Sim Eunju, a researcher at Hana Financial Investment, stated, "Contrary to concerns, second-quarter earnings will also exceed market expectations," and added, "Considering the solid performance, buying at low prices is effective."

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