[Click eStock] "CJ Freshway, Earnings Improvement Expected with Consumer Sentiment Recovery"

Kiwoom Securities analyzed that CJ Freshway's operating profit in the first quarter of this year is expected to continue the growth trend for the second consecutive quarter, supported by a rebound in consumer sentiment and cost efficiency. The investment opinion was maintained as 'Buy' with a target price of 32,000 KRW.

With recent domestic consumer sentiment recovering, CJ Freshway is evaluated to have entered a demand recovery phase. Sangjun Park, a researcher at Kiwoom Securities, said, "Domestic consumer sentiment formed a bottom (88.4) in December last year due to increased political uncertainty, and has been recovering to a level of 90-95 in the first quarter of this year," adding, "In the second quarter, a rebound in demand across overall offline distribution channels, including dining out consumption, is expected."

CJ Freshway has been controlling the increase in selling and administrative expenses since the second half of last year, and with the prices of major raw material distribution products likely to rise, the momentum for performance improvement in the food ingredient distribution sector is expected to gradually strengthen.

Performance recovery in the food service sector is also anticipated. Researcher Park noted, "There is a base effect on performance from the second quarter due to the medical strike impact, and new orders are recovering to levels seen in previous years," emphasizing, "Especially if medical services normalize in the future, the scope of performance improvement could become even steeper."

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