[Click e-Stock] "CJ Logistics: Logistics Industry Now Enters the Era of Polarization"

On November 10, Korea Investment & Securities analyzed that CJ Logistics is leading the 'era of polarization' in the logistics industry, recording results in the third quarter of this year that exceeded market expectations.

Choi Gowoon, a researcher at Korea Investment & Securities, stated, "Despite ongoing unfavorable internal and external conditions, operating profit increased year-on-year for the first time this year," adding, "Thanks to increased market share driven by differentiated delivery services and improved cost structure through digital innovation such as logistics automation, the company delivered the most impressive profit improvement in the transportation sector during the third quarter earnings season."

In the third quarter of this year, CJ Logistics reported revenue of 3.0666 trillion won, up 3% from the same period last year, and operating profit of 147.9 billion won, up 4%. Although overall growth was somewhat sluggish due to decreased demand in forwarding and port operations, operating profit exceeded consensus by 7%, surpassing market expectations.

By business segment, the parcel delivery division showed a clear recovery. Operating profit in the parcel delivery segment was 62.8 billion won, a 16% increase year-on-year, with an operating profit margin (OPM) of 6.5%. Choi Gowoon explained, "Parcel volume increased by 5%, marking the highest growth rate since the first quarter of 2021. Although the average unit price fell by 2% due to promotional effects, this was offset by fulfillment growth." She added, "In particular, cost efficiency improvements through automation completely offset the cost burden from expanding seven-day delivery services, enabling a turnaround in operating profit for the first time in five quarters."

The Contract Logistics (CL) segment also maintained solid growth. Operating profit in this segment was 55.3 billion won, up 8% year-on-year, with the operating profit margin rising to 6.4%. She assessed, "Despite increased economic uncertainty, the effect of new orders has enabled the company to sustain double-digit growth throughout the year. Based on its logistics technology, CJ Logistics is rapidly gaining market share in the third-party logistics sector, and despite the upfront costs of new large-scale projects, the operating profit margin improved from 5.1% in the first half to 6.4% in the third quarter."

On the other hand, the global segment underperformed. Operating profit was 20.1 billion won, down 29% year-on-year, with an operating profit margin of just 1.9%. The analysis indicated that despite growth in the India business, the weak performance in the forwarding segment had a negative impact.

CJ Logistics is expected to accelerate its growth again from the fourth quarter onward. Choi Gowoon commented, "The effect of the seven-day delivery service is becoming more pronounced, and parcel volume in the fourth quarter is expected to increase by 5% despite the Chuseok holiday. In 2026, both parcel volume and pricing are expected to improve together for the first time in five years." She added, "In the CL segment, the temporary increase in costs this year will be resolved, and from next year, the company is expected to achieve record-high operating profit once again."

She emphasized, "Unlike its traditional industry image, CJ Logistics is supporting profit momentum through service differentiation and logistics digitalization. The current share price, which is trading below a price-to-earnings ratio (PER) of 7 times based on 2026 estimates, deserves a revaluation."

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