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CJ CheilJedang Headquarters Exterior (Photo = CJ) |
[Alpha Biz= Paul Lee] Daishin Securities has downgraded CJ's target price from 160,000 KRW to 145,000 KRW, reflecting a decrease in net asset value (NAV) due to the decline in stock prices of its affiliated subsidiaries.
CJ’s consolidated financial results for last year showed a 5% year-on-year increase in revenue to 43.6 trillion KRW, a 25% rise in operating profit to 2.5 trillion KRW, and a 73% decline in net profit to 1.39 trillion KRW. The company’s Q4 revenue stood at 11.7 trillion KRW, operating profit at 630.2 billion KRW, and net loss at 25.1 billion KRW, falling short of expectations.
Although the financials of its unlisted subsidiary Olive Young have not yet been disclosed, Q4 revenue is estimated to have grown by 4-5% from the previous quarter, reaching approximately 1.28-1.29 trillion KRW. Olive Young's annual revenue for last year is estimated at 4.8 trillion KRW, a 24% increase from the previous year, with expectations for this year set at 5.5 trillion KRW in revenue and 600 billion KRW in operating profit.
Daishin Securities stated, "There are market expectations regarding CJ Group’s corporate governance restructuring and Olive Young’s expansion into the U.S., particularly in relation to the Commercial Act amendment. However, we anticipate a performance trend of a slow first half followed by recovery in the second half this year." The firm recommended investors to monitor domestic economic conditions, early presidential elections in Q2, and subsidiary performance improvements, particularly Olive Young's overseas market expansion.
Additionally, Daishin Securities highlighted CJ ENM’s losses related to Live City in Q3 and CJ CheilJedang’s goodwill impairment in its bio subsidiary and overseas asset disposal losses in Q4 as factors that weighed on the company’s second-half performance.
Given CJ’s business structure, which is heavily influenced by domestic economic conditions, the company is expected to see stronger performance in the latter half of the year. The firm projects CJ’s annual revenue to reach 45.9 trillion KRW and operating profit to grow by 14% year-on-year to 2.9 trillion KRW.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
