[Click eStock] "CJ, Olive Young's Solo Dominance Drives Online and Offline Sales Growth"

[Asia Economy Reporter Kwon Jaehee] Hi Investment & Securities maintained its 'Buy' rating and target price of 114,000 KRW for CJ on the 20th.

Hi Investment & Securities forecasted that CJ Olive Young's dominant position this year will strengthen, leading to continuous growth in both offline and online sales. Over the past decade, as the growth potential of the H&B (Health & Beauty) store market slowed due to COVID-19, restructuring began. Accordingly, GS Retail (Lalavla) withdrew from the H&B market after 17 years, and Lotte Shopping (Lob's) also closed all remaining street stores nationwide.

In this environment, CJ Olive Young expanded its store count to 1,289 as of the end of Q3 last year, an increase of 29 stores year-on-year and 14 stores quarter-on-quarter. Thanks to offline stores located in key hubs, CJ Olive Young has been able to offer the "Today Dream" service since 2018, delivering purchases within three hours. With over 80% of stores operated directly by headquarters, nationwide store networks enable integrated online-offline services and support fast delivery specialization.

This kind of online-offline integrated omnichannel has provided a foundation for CJ Olive Young to increase its online sales ratio despite COVID-19.

Subsidiaries such as CJ CGV and CJ Foodville are also expected to show visible performance turnarounds. CJ CGV is expected to return to profitability this year, driven by the lifting of indoor mask mandates, the release of Hollywood blockbuster films, and ticket price increases, marking a full recovery from the COVID-19 impact.

CJ Foodville is anticipated to see sales growth this year as the dining industry recovers following the easing of social distancing, with increased sales per store through premiumization of dining brands and expansion of bakery franchise openings. Additionally, cost reductions from store operation efficiencies are expected to significantly improve profitability.

Lee Sangheon, a researcher at Hi Investment & Securities, analyzed, "With CJ Olive Young's strengthened dominant position, not only offline expansion but also growth in online sales through integrated online-offline omnichannel will continue. The visible performance turnaround of subsidiaries such as CJ CGV and CJ Foodville, escaping the COVID-19 impact, will act as momentum for stock price increases."

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