[Click eStock] "CJ CheilJedang Earnings Growth... Target Price Maintained"

Expected Sales of 4.465 Trillion KRW and Operating Profit of 159.4 Billion KRW

Sangsangin Securities maintained a buy rating and a target price of 420,000 KRW for CJ CheilJedang on the 8th, stating that "its performance will turn to a growth trend starting from the fourth quarter of last year."

On the day, researcher Kim Hyemi of Sangsangin Securities said, "CJ CheilJedang's consolidated performance for the fourth quarter of last year (excluding CJ Logistics) is expected to show sales of 4.465 trillion KRW and an operating profit of 159.4 billion KRW," adding, "Profits will begin to recover due to input cost improvements and base effects, but the impact of the global consumption downturn will cause results to be weaker than expected."

Looking at the performance by segment compared to the fourth quarter of 2022, food sales are expected to decrease by 1%, while operating profit is projected to increase by 56%. Domestic processed food sales are expected to decline by 2%, which is attributed to the absence of gift set sales effects due to the timing difference of the Lunar New Year holiday, despite a recovery in sales volume. Overseas processed food sales are expected to decrease by 1%. Researcher Kim analyzed, "In the U.S., market dominance continues to expand. Participation in large channel consumer events will sustain solid sales growth," but added, "In Asian countries including China and Japan, sales are expected to be sluggish due to the impact of consumption slowdown and efforts to improve profitability through channel adjustments."

BIO and FNT (Food & Nutrition Technology) are expected to see sales decline by 12% and operating profit decrease by 20%. Despite a challenging business environment caused by weak demand in China, pressure on input costs (raw sugar), and poor performance of CJ Selecta, a Brazilian subsidiary, improvement compared to the previous quarter is possible due to the expansion of special product sales. Feed & Care (feed and livestock) sales are expected to decrease by 14%, with operating losses continuing at 23.9 billion KRW. The segment's poor performance is anticipated due to reduced livestock consumption in emerging countries such as Vietnam and Indonesia amid macroeconomic impacts.

Researcher Kim said, "The stock price rose 11% as expectations for a performance turnaround in the fourth quarter of last year were reflected. However, the strength of the recovery, which has not met expectations, appears to be limiting further gains," adding, "Global interest in K-food is increasing. Since the company has diversified its entry regions, it is expected to have opportunities, so buying during the sideways movement of the stock price is considered advantageous."

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