[Click e-Stock] Market Share Expansion Is Key... CJ Logistics, Target Price Lowered from 180,000 to 150,000 Won

Sangsangin Securities has maintained its investment rating of "Buy" for CJ Logistics, but lowered its target price from 180,000 won to 150,000 won.

On April 21, Sangsangin Securities researcher Seo-yeon Lee stated, "The share price has undergone an adjustment as expectations for a market share reshuffle, stemming from the revision of the Large-scale Distribution Act for hypermarkets, have been delayed."

However, the company is expected to continue its growth trajectory. Researcher Lee explained, "Parcel delivery performance is growing thanks to seven-day-a-week delivery, which is expanding both market share and volume. The contract logistics (CL) division is expected to see the easing of initial costs and the beginning of full-scale new order leverage starting in the second half of this year."

For the first quarter of this year on a consolidated basis, revenue is projected at 3.0921 trillion won and operating profit at 110.2 billion won, falling short of market expectations. Researcher Lee attributed this mainly to a decrease in average selling price (ASP) due to promotions in the parcel delivery segment, as well as ongoing initial expenses from new corporate logistics (W&D) orders. Nevertheless, she added, "With the launch of seven-day-a-week delivery services, the company is expanding its parcel delivery market share, and operating profit from parcel delivery is expected to grow 22% year-on-year."

She continued, "Although the global division is expected to see an 8% decline in year-on-year performance due to increased volatility in ocean freight rates and subsequent deterioration in the forwarding division, growth in volume from securing major cold chain clients in the US and a reduction in vacancy rates are expected to drive operating profit margin (OPM) to 2.1%, contributing to earnings growth."

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