[Click eStock] "CJ Daehan Tongun, Expected Benefit from Ali Korea Market Entry... Target Price Up"

Daishin Securities raised the target price for CJ Logistics on the 3rd, expecting it to be the biggest beneficiary of AliExpress's Korean market penetration, from the previous 120,000 KRW to 160,000 KRW. The investment rating was maintained as 'Buy.'

Ji-hwan Yang, a researcher at Daishin Securities, explained, "The target price increase is due to the upward revision of profit forecasts for the fourth quarter of last year and this year, as well as the volume growth in the parcel delivery sector," adding, "The target price is based on an estimated price-to-earnings ratio (PER) of about 12 times and a price-to-book ratio (PBR) of 0.9 times for CJ Logistics this year. Despite the recent stock price rise, the valuation burden is not considered significant."

The stock price of CJ Logistics has risen more than 60% since mid-November last year, driven by expectations of increased volume from direct purchases from China, especially AliExpress. Researcher Yang said, "Although the short-term rise was significant, the upward trend in the stock price is likely to continue," explaining, "This is because the volume from AliExpress handled by CJ Logistics last year is estimated to be around 30 million boxes, but it is expected to increase significantly to about 50 million boxes this year."

Currently, CJ Logistics is responsible for some customs clearance and parcel delivery of AliExpress volumes. CJ Logistics plans to expand the capacity of its International Courier Center (ICC), which currently processes 2 million boxes per month, by 2025. Researcher Yang forecasted, "Although there are still consultation procedures with customs, if CJ Logistics increases ICC processing capacity, the volume growth could accelerate due to higher efficiency compared to companies currently performing customs clearance."

CJ Logistics' fourth-quarter performance last year is expected to exceed previous estimates. Researcher Yang stated, "CJ Logistics' fourth-quarter results are expected to surpass prior estimates, with sales of about 2.9 trillion KRW and operating profit of 131 billion KRW."

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