[Click eStock] "CJ CheilJedang, Earnings Show Low in Early Year and Strong Outlook"

On the 27th, Kiwoom Securities maintained a 'Buy' rating on CJ CheilJedang but lowered the target price from 440,000 KRW to 410,000 KRW.

CJ CheilJedang's consolidated operating profit for the second quarter is expected to be 323.2 billion KRW (213.9 billion KRW excluding CJ Logistics), slightly below market consensus. In the food segment, while high growth in the Americas business continues, the rate of decline in domestic sales volume is easing, leading to a positive year-on-year increase in domestic sales. In the bio segment, although the recovery of the industry is delayed due to the slow economic recovery in China, operating profit is expected to slightly increase compared to the first quarter due to strong growth in specialty amino acid sales and overcoming the off-season impact of Selecta. The F&C segment is expected to return to profitability in the second quarter as pork prices in Vietnam rose about 20% compared to the first quarter.

CJ CheilJedang's stock price has been significantly adjusted due to concerns over price reductions in major food ingredient materials and sentiment deterioration caused by affiliated companies' capital increases. However, second-half performance is expected to improve compared to the first half. The reasons include a gradual recovery in domestic food sales, external growth enhancement through new K-Street Food product launches mainly in the US and Japan, growth in specialty amino acid sales in the bio business, and a slight rebound in lysine spot prices, suggesting that further deterioration in the industry is unlikely.

Park Sang-jun, a researcher at Kiwoom Securities, analyzed, "Although it is necessary to lower performance expectations for the bio sector due to the delayed economic recovery in China, second-half performance is expected to improve compared to the first half, supported by the recovery of domestic food demand and high growth in overseas businesses."

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