[Click eStock] "CJ CheilJedang, Operating Profit Margin Improvement... Target Price Raised from 410,000 to 440,000"

Q1 Expected Operating Profit to Exceed Consensus
Profitability Improvement Momentum, Operating Margin Also Upward
"Growth Trend to Remain Steady... Volatility to Decrease"

Kiwoom Securities analyzed on the 3rd that CJ CheilJedang's operating profit margin will improve along with reduced volatility. They maintained a 'Buy' investment rating and raised the target price from the previous 410,000 KRW to 440,000 KRW. CJ CheilJedang's closing price on the previous trading day was 304,500 KRW.

Sangjun Park and Daehyun Shin, researchers at Kiwoom Securities, stated, "As sales growth continues centered on the global food business and specialty amino acids, the stabilization of grain input costs and structural improvements in the bio business will strengthen the momentum for profitability improvement in the mid-term."

CJ CheilJedang's expected operating profit for the first quarter is 373.3 billion KRW. Thanks to the recovery in domestic processed food sales volume and profitability, as well as the reduction of operating losses in the Selecta/F&C division, overall profitability is expected to exceed market expectations. The two researchers added, "Domestic processed foods are normalizing in sales growth rate and profitability as online channel routes diversify (Coupang, Naver, Kurly, AliExpress, etc.), and overseas food sales are expected to show steady growth centered on the Americas, Europe, and Australia."

The operating profit margin is expected to be revised upward overall, with volatility also easing. As grain input costs stabilize, the potential for overall cost ratio improvement is expanding. The reduction in the sales proportion of lysine and sales focused on high-profit customers are expected to reduce the profit contribution and volatility of the lysine business. Additionally, the closing of the Selecta deal within the year and the strengthening of the portfolio centered on high-profit products are expected to raise the operating profit margin level of the bio division.

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