[Click eStock] "CJ CheilJedang, 2Q Earnings Below Expectations... Target Price Down"

Ebest Investment & Securities lowered the target price for CJ CheilJedang from 480,000 won to 420,000 won on the 28th. The investment rating was maintained at 'Buy.'

CJ CheilJedang's second-quarter earnings are expected to record sales of 7.3003 trillion won and operating profit of 320.3 billion won. These figures represent decreases of 2.9% and 36.5%, respectively, compared to the same period last year. The operating profit is also below the market expectation of 345.2 billion won.

The food division's operating profit is forecasted to be 136.1 billion won, down 18.8% from the same period last year. It is expected to contract in China, where economic recovery remains slow.

The bio and Food & Tech (FNT) divisions are expected to see operating profits plunge by nearly 70%. The major commodity markets such as lysine and methionine remain at low points, showing weakness in both sales volume and prices. Due to the sluggish Chinese economy, demand for food products including pork has not significantly increased, resulting in a slower-than-expected recovery in nucleotides.

Jiwoo Oh, a researcher at Ebest Investment & Securities, said, "The industry is still passing through the bottom, and there does not appear to be much room for further deterioration," adding, "Both the food and bio sectors are expected to be influenced by China's economic conditions as a variable affecting performance."

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