[Click eStock] "CJ CheilJedang Diversifies Portfolio Through Product Advancement"

[Asia Economy Reporter Kwon Jae-hee] Shinhan Investment Corp. maintained its 'Buy' rating and target price of 530,000 KRW for CJ CheilJedang on the 16th.

CJ CheilJedang recently established the FNT (Food & Nutrition Tech) division through an organizational restructuring. The existing HNH (Human Nutrition & Health) within the bio business will be transferred to the FNT division, which will operate businesses such as future food ingredients and nutrition, alternative proteins, and cultured proteins. By combining the B2C DNA of the food sector with the technology and infrastructure of the bio sector, the company is expected to respond quickly to trends and accelerate new growth areas. This aligns with CJ Group’s initiatives in C (Culture), P (Platform), W (Wellness), and S (Sustainability). The company aims to achieve sales exceeding 2 trillion KRW by 2025.

Researcher Cho Sang-hoon of Shinhan Investment Corp. said, "CJ CheilJedang has grown by leading trend changes with differentiated capabilities and strategies from the past," adding, "This can be explained by portfolio diversification through product advancement and evolution."

The bio sector experienced poor performance due to a continuous decline in lysine prices caused by oversupply since 2011. However, the company overcame this by diversifying its portfolio with tryptophan, arginine, valine, and others. This specialty-focused growth has led to improved product mix and favorable profitability. Although the specialty amino acid market size is still small, it has high growth potential. While competitors are reluctant to invest in facilities, CJ CheilJedang possesses compatible equipment within existing plants, making it easier to establish market dominance. Additionally, profitability is better compared to existing products, which is a positive factor for overall company performance and ESG perspectives.

Researcher Cho analyzed, "The food sector satisfies both growth and profitability, and the bio sector is expected to overcome the base burden through specialty amino acid growth," adding, "If the stability of existing businesses improves while synergy with new growth engines is created, we will actively consider removing the discount rate applied to the global peers in our current corporate valuation."

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