[Click eStock] "CJ CheilJedang, Performance Recovery... Operating Profit Expected to Rebound in 2024"

Recovery Trend in Core Business Performance Including Food Sector
Bio Sector Also Expected to Rebound Upon Completion of CJ Selecta Sale
"Low Valuation Within Food and Beverage Industry Will Be Highlighted"

On the 14th, NH Investment & Securities maintained a target price of 430,000 KRW for CJ CheilJedang, stating that the core business sectors are experiencing a recovery in performance. The investment opinion of 'Buy' was also maintained. CJ CheilJedang's closing price on the 13th was 298,000 KRW.

Younghoon Joo, a researcher at NH Investment & Securities, said, "The recovery in performance of core business sectors is underway due to the recovery in demand for processed foods and the easing of cost burdens from the decline in raw material prices." He added, "Although the performance of the subsidiary CJ Selecta has deteriorated, this entity is expected to be removed from consolidated earnings once the sale process is completed, so the impact on corporate value will be limited."

CJ CheilJedang's sales in the fourth quarter of 2023 were 7.2894 trillion KRW, and operating profit was 298.3 billion KRW, meeting the consensus (market average forecast) for operating profit. Researcher Joo stated, "Excluding the performance of the subsidiary CJ Logistics, sales decreased by 7% year-on-year, while operating profit increased by 28%. Sales in the food sector amounted to 2.8013 trillion KRW, reflecting a positive recovery in domestic processed food sales, and a strong market dominance is maintained in the U.S. market as well." The bio sector showed some weakness due to the downturn in CJ Selecta's business, but since this entity is planned to be sold, operating profit excluding it increased compared to the same period last year. However, the F&C sector recorded a loss due to a decline in pork prices in Vietnam.

Researcher Joo said, "Although concerns such as the deterioration of profitability in the F&C sector remain, considering the low base, the visibility of a rebound in consolidated operating profit in 2024 is very high," and added, "Along with the performance rebound, the relatively low valuation within the food and beverage industry is expected to be highlighted."

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