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(Photo= Yonhap news) |
[Alpha Biz= Reporter Kim Minyoung] On the 16th, SK Securities maintained a "Buy" rating and a target price of 140,000 won for CJ (001040), expecting that the strong performance of its subsidiary Olive Young will be fully reflected in the stock price. The stock closed at 116,800 won on the previous trading day (14th).
In Q2 of this year, CJ reported a 3.8% increase in revenue to 10.6 trillion won and a 33.6% rise in operating profit to 666.4 billion won. SK Securities analyst Choi Kwan-soon attributed this improvement to better performance by major listed subsidiaries like CJ CGV and CJ ENM, and strong results from unlisted subsidiaries such as CJ Olive Young.
SK Securities highlighted that Olive Young achieved its highest-ever quarterly net profit of 124.9 billion won in Q2. The growth was driven by an increase in offline stores, higher sales per store, and robust online sales.
The firm also noted that Olive Young is expected to benefit from an increase in foreign tourists and expanded online sales in the second half of the year. The recent establishment of a Japanese subsidiary in May is likely to sustain the company’s growth trajectory. SK Securities believes that the merger or listing of Olive Young in the short term is unlikely, so any increase in Olive Young's value will likely translate directly into a rise in CJ's stock price.
SK Securities forecasts that Olive Young's positive performance will be fully reflected in CJ's stock price and suggests that there is potential for an upward revision of the target price based on current results. They predict CJ's annual operating profit will reach 2.456 trillion won, a 20% increase from last year's 2.039 trillion won.
Alphabiz Kim Minyoung (kimmy@alphabiz.co.kr)
