Corporate Logo(source: cjnews.cj.net)
Hana Securities maintained its "BUY" rating and target price of 420,000 won for CJ CheilJedang(097950) on the 24th, forecasting a gradual recovery in the company’s performance throughout the year, with increasingly favorable operating conditions expected in the second half.
Shim Eun-joo, an analyst at Hana Securities, noted, "Considering the company’s mid- to long-term strategy to focus on the food business, this presents an attractive opportunity for low-cost buying." She added, "Investing in the food sector is positive not only for improving the financial structure but also for long-term synergies within the group."
For the first quarter, CJ CheilJedang’s consolidated sales and operating profit are estimated to be 7.398 trillion won, up 2.5% year-over-year, and 364.7 billion won, down 3% year-over-year. Excluding logistics, the consolidated sales and operating profit are projected to be 4.554 trillion won(a 2.5% increase) and 254.7 billion won(a 4.6% decrease), respectively.
These estimates slightly miss market expectations, as challenges from Q4 2022—such as sluggish domestic consumption and operational disruptions in some dessert lines due to a tornado in the U.S.—are expected to continue into the first quarter.
The company is expected to see a stronger second half, with a gradual recovery in performance. Domestic processed food sales are anticipated to slightly decline or remain flat due to base effects from the timing of Lunar New Year gift sets. Despite strong growth in online channels driven by the resumption of transactions with Coupang, the overall consumption slump in offline channels is expected to offset this.
Overseas processed food sales are expected to grow by around 5% year-over-year, with U.S. sales facing continued disruptions in the dessert line, while growth in regions outside the U.S. is expected to continue.
Shim forecasts the bio division will contribute approximately 80 billion won in profit, with the price of lysine expected to rise due to anti-dumping duties on Chinese lysine in Europe. This is expected to have a positive impact on performance in the second half of the year. Additionally, the Feed & Care segment is expected to remain profitable, supported by a recovery in Vietnamese pork prices.
Shim also commented, "The annual results are expected to align with market expectations, with a stronger second half driven by increasingly favorable operating conditions."
At the beginning of the year, stable grain prices and the gradual effect of the resumption of Coupang transactions are positively impacting the domestic processed food business, while the repair of the tornado-affected dessert line in the U.S. is expected to be completed in the first half of the year.
The bio business environment is also seen as favorable. With the anti-dumping tariffs on Chinese lysine products in the EU, CJ CheilJedang is expected to benefit from its diversified production bases, leading to indirect gains.
*[KOSPI]CJ CheilJedang(097950) engages in the business of food ingredients such as sugar, flour, and cooking oil, as well as processed foods such as Hetbahn(instant rice), dumplings, pizza, home convenience foods, and processed meat products. The market capitalization is 4.042 trillion won(as of March 21, 2025, closing price).
Corporate Logo(source: cjnews.cj.net)
Hana Securities maintained its "BUY" rating and target price of 420,000 won for CJ CheilJedang(097950) on the 24th, forecasting a gradual recovery in the company’s performance throughout the year, with increasingly favorable operating conditions expected in the second half.
Shim Eun-joo, an analyst at Hana Securities, noted, "Considering the company’s mid- to long-term strategy to focus on the food business, this presents an attractive opportunity for low-cost buying." She added, "Investing in the food sector is positive not only for improving the financial structure but also for long-term synergies within the group."
For the first quarter, CJ CheilJedang’s consolidated sales and operating profit are estimated to be 7.398 trillion won, up 2.5% year-over-year, and 364.7 billion won, down 3% year-over-year. Excluding logistics, the consolidated sales and operating profit are projected to be 4.554 trillion won(a 2.5% increase) and 254.7 billion won(a 4.6% decrease), respectively.
These estimates slightly miss market expectations, as challenges from Q4 2022—such as sluggish domestic consumption and operational disruptions in some dessert lines due to a tornado in the U.S.—are expected to continue into the first quarter.
The company is expected to see a stronger second half, with a gradual recovery in performance. Domestic processed food sales are anticipated to slightly decline or remain flat due to base effects from the timing of Lunar New Year gift sets. Despite strong growth in online channels driven by the resumption of transactions with Coupang, the overall consumption slump in offline channels is expected to offset this.
Overseas processed food sales are expected to grow by around 5% year-over-year, with U.S. sales facing continued disruptions in the dessert line, while growth in regions outside the U.S. is expected to continue.
Shim forecasts the bio division will contribute approximately 80 billion won in profit, with the price of lysine expected to rise due to anti-dumping duties on Chinese lysine in Europe. This is expected to have a positive impact on performance in the second half of the year. Additionally, the Feed & Care segment is expected to remain profitable, supported by a recovery in Vietnamese pork prices.
Shim also commented, "The annual results are expected to align with market expectations, with a stronger second half driven by increasingly favorable operating conditions."
At the beginning of the year, stable grain prices and the gradual effect of the resumption of Coupang transactions are positively impacting the domestic processed food business, while the repair of the tornado-affected dessert line in the U.S. is expected to be completed in the first half of the year.
The bio business environment is also seen as favorable. With the anti-dumping tariffs on Chinese lysine products in the EU, CJ CheilJedang is expected to benefit from its diversified production bases, leading to indirect gains.
*[KOSPI]CJ CheilJedang(097950) engages in the business of food ingredients such as sugar, flour, and cooking oil, as well as processed foods such as Hetbahn(instant rice), dumplings, pizza, home convenience foods, and processed meat products. The market capitalization is 4.042 trillion won(as of March 21, 2025, closing price).