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[Alpha Biz=(Chicago) Reporter Kim Jisun] CJ CGV's stock price has plummeted day after day after day of massive paid-in capital increase. Analysts say that short-term stock prices are inevitable to fall as the company seeks to expand capital worth 1 trillion won.
According to the Korea Exchange on the 22nd, CJ CGV was traded at 10,500 won on the KOSPI market, down 8.22% from the previous trading day. Stock prices fell to the level of 2008 when the global financial crisis was in full swing. It plunged 27.58% in two days, including the previous day (-21.10%).
CJ CGV announced on the 20th that it will promote a paid-in capital increase of 570 billion won and in-kind investment (450 billion won) by its parent company CJ to improve its financial structure. It attracted a trillion won in capital, but investor sentiment froze sharply
CJ CGV's expansion of capital is aimed at improving the financial situation with COVID-19. CJ CGV's sales reached 2 trillion won in 2019, but shrank to 583.4 billion won in 2020. During the same period, operating profit shifted from 122 billion won to -388.7 billion won.
Sales are recovering to 736.3 billion won in 2021 and 1.2813 trillion won last year, but operating losses are still in the red at 241.4 billion won and 76.8 billion won, respectively. As of the end of the first quarter of this year, the debt ratio was close to 912%, and net borrowing amounted to 2.4 trillion won.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
