▷ Sugar Companies Hit Hard by Collusion Penalties; CJ CheilJedang Shares Drop 25%
- Amid a booming stock market, the shares of CJ CheilJedang, Daehan Sugar, and Samyang Foods, the "Big Three" sugar companies, have declined.
- Despite stable performance, the companies have suffered a blow to their credibility due to penalties imposed by the Fair Trade Commission for collusion.
- According to the Korea Exchange on June 30, CJ CheilJedang's stock price fell from 254,500 won on July 1 last year to 191,400 won on June 29, a drop of 24.8%.
- During the same period, Daehan Sugar's shares decreased from 3,020 won to 2,385 won, a decline of 21.0%, while Samyang Foods saw a drop from 53,800 won to 44,150 won, or 17.9%.
- In February, the Fair Trade Commission imposed hefty fines on the three sugar companies for collusion, with CJ CheilJedang facing a fine of 150.7 billion won, Samyang Foods 130.3 billion won, and Daehan Sugar 127.4 billion won.
- The fines have been reflected as non-operating expenses, impacting last year's net profits. CJ CheilJedang reported a net loss of 417 billion won, Samyang Foods 302.4 billion won, and Daehan Sugar 603 million won.
- The first quarter of this year also saw poor profitability. CJ CheilJedang's operating profit fell by 28.5% compared to the same period last year, while Samyang Foods and Daehan Sugar reported declines of 12.6% and 33.6%, respectively.
- However, recovery potential varies among the companies. Korea Credit Rating Agency predicts that CJ CheilJedang and Samyang Foods have sufficient cash flow and diverse business portfolios, limiting the financial impact of the fines.
- Daehan Sugar, on the other hand, is seen as the most burdened due to the relatively large fines compared to its capital and profit size.
- The three sugar companies are considering measures to boost their stock prices. CJ CheilJedang plans to expand its global business and foster future projects while enhancing shareholder returns to increase long-term corporate value.
- Daehan Sugar has outlined plans to improve corporate value, aiming for a 7% return on equity and a price-to-book ratio of 0.8 by 2028, along with increasing annual dividends to over 10 billion won. Samyang Foods has decided to maintain its dividends despite reporting a net loss last year.
◆ Major Reports
▷ Turbulent First Half; Focus on Dollar Over Foreign Investors in Second Half [Korea Investment & Securities]
- The Korean won closed at 1,484 won amid pressures from both domestic and international factors, peaking at 1,560 won.
- Internationally, inflation concerns stemming from the U.S.-Iran conflict have intensified strong dollar pressures linked to expectations of Federal Reserve interest rate hikes.
- Domestically, large-scale selling by foreign investors continues due to profit-taking and rebalancing pressures following a surge in domestic stocks.
- In the second half, as the KOSPI continues to rise, significant selling by foreign investors in domestic stocks is expected to persist.
- The primary factors determining the direction and level of the dollar-won exchange rate in the second half will be the Federal Reserve's monetary policy path and dollar movements.
- Externally, expectations for a reduction in U.S. interest rates are expected to ease strong dollar pressures.
- However, until a clear turning point for a weaker dollar is established, domestic supply and demand pressures will likely persist, making high exchange rates in the 1,500 won range unavoidable.
- If the previous peak of 1,560 won is surpassed, it may be challenging to identify significant resistance, so the upper limit may extend to 1,600 won.
◆ Major Announcements After Market Close (June 30)
▷ Humax Decides to Absorb Humax Holdings
▷ Green Optical Signs 4.7 Billion Won Supply Contract for ZnS Components with Israeli Defense Solutions Provider
▷ SJG Sejong Decides to Burn 4.7 Billion Won of Previously Acquired Treasury Shares
▷ InnoGen Announces 3.36 Billion Won Third-Party Allotment Capital Increase
▷ Seongjin Beauty Science Decides to Acquire 3 Billion Won of Its Own Shares
▷ Hyper Corporation Extends 5.4 Billion Won Operating Fund Loan to Finger Labs
▷ NextEye Announces 1.9 Billion Won Third-Party Allotment Capital Increase
◆ Fund Trends (As of June 29, Excluding ETFs)
▷ Domestic Equity Funds: +234.4 Billion Won
▷ Overseas Equity Funds: +27.9 Billion Won
◆ Key Schedule for Today (July 1)
▷ South Korea: June Export and Trade Balance, 30th Anniversary of KOSDAQ Launch
▷ Japan: Second Quarter Tankan Index
▷ China: June RatingDog Manufacturing Index
▷ Eurozone: June Consumer Price Index (Preliminary)
▷ United States: June ISM Manufacturing Index, June ADP Private Employment, June Challenger Job Cut Report
* This article has been translated by AI.
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