Hana Securities announced on August 18 that it has lowered its target price for CJ from 240,000 won to 200,000 won, reflecting a decrease in the value of its shares due to falling stock prices of major listed subsidiaries and declining profitability at its unlisted companies, CJ Olive Young and CJ Foodville.
In a report released that day, analyst Choi Jeong-wook explained, "In the second quarter, CJ's consolidated revenue reached 11.5 trillion won, a 3.7% increase compared to the same period last year, but operating profit fell by 14.1% to 531.8 billion won, significantly missing market expectations."
Regarding the decline in operating profit at CJ CheilJedang, he noted, "Despite growth in domestic processed food and global food sales, profitability was weaker than expected due to increased logistics and packaging costs from rising oil prices."
As for CJ Logistics, he stated, "Thanks to strengthened competitiveness in daily O-NE, parcel volume increased by 12.1% year-on-year, but operating profit fell by 11.8% due to a drop in delivery prices, costs for service enhancements, and cost pressures from the Middle East."
Choi also mentioned that while CJ Freshway saw positive growth in size and market share, its operating profit decreased by 14.2% year-on-year due to spending on online advertising and promotions to acquire new customers.
Performance from unlisted companies also fell short of expectations. Choi assessed, "Both CJ Olive Young and CJ Foodville underperformed expectations, indicating that while most subsidiaries are growing in size, profitability is deteriorating due to increased cost burdens."
In contrast, CJ ENM reported a 16.9% increase in operating profit, driven by Tving achieving its first quarterly operating profit of 6 billion won since its launch. CJ CGV also saw a 576.5% increase in operating profit, benefiting from the recovery of the domestic film market and a reduction in losses from its theater operations.
* This article has been translated by AI.
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