[Click eStock] "CJ ENM, Long-Term Perspective Needed"... Target Price ↓

[Asia Economy Reporter Lee Jung-yoon] NH Investment & Securities adjusted its earnings estimates for CJ ENM on the 25th, reflecting the sluggish business conditions due to uncertain macroeconomic environment, and lowered the target stock price from the previous 135,000 KRW to 100,000 KRW. However, the buy rating was maintained.

Researcher Lee Hwa-jung of NH Investment & Securities explained, "The media sector inevitably suffered from a slowdown in the broadcasting advertising market, and profitability continued to decline due to ongoing costs related to new businesses," adding, "Commerce is inevitably affected by the slow recovery of consumer sentiment amid macroeconomic uncertainties." She continued, "The music division strengthened its quarterly performance thanks to the success of self-developed intellectual property (IP), and with additional IPs scheduled to debut this year, high growth is expected to continue."

On a consolidated basis, CJ ENM's third-quarter sales this year are projected to increase by 40% year-on-year to 1.2 trillion KRW, while operating profit is expected to decrease by 37% to 55 billion KRW. Except for the music division, all other sectors are expected to show sluggish performance.

By division, the media segment's operating profit is estimated to have decreased by 68% year-on-year to 20.4 billion KRW. Although content hits diversified sales channels and the number of paid subscribers to its own online video service (OTT) increased, growth was limited due to the slowdown in the broadcasting advertising market.

The commerce segment's operating profit is forecasted to decline by 26% to 19.9 billion KRW, reflecting a slow recovery amid unfavorable business conditions. The film division is expected to record an operating loss of 2.6 billion KRW, while the music division's operating profit is analyzed to have increased by 58% year-on-year to 17.3 billion KRW.

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