Kiwoom Securities analyzed that on the 13th, CJ CheilJedang's second-quarter performance met market expectations (consensus), but a deterioration in performance is expected in the third quarter. This is because a downturn in the bio institutional sector is anticipated despite a recovery in the food institutional sector. The target share price was downgraded from 340,000 won to 320,000 won, while the investment opinion remains 'buy'.
CJ CheilJedang's consolidated operating profit for the second quarter was 353.3 billion won, an 8% decrease compared to the same period last year. Operating profit slightly decreased due to poor performance in the food institutional sector despite strong results in the bio institutional sector. However, it is similar to the consensus.
Kiwoom Securities forecasted that in the third quarter, CJ CheilJedang's revenue would see single-digit growth and the operating profit margin would be 5%. Performance is expected to show an improvement compared to the first half due to the rebound in domestic consumer sentiment in the food sector and the impact of the Chuseok holiday.
However, in the bio sector, operating profit is expected to significantly decrease compared to the previous quarter due to deterioration in the market conditions for key products. The lysine materials in Europe have peaked and are trending downward, and it is inevitable to adjust prices in response to increased supply from Chinese competitors.
Park Sang-jun, a researcher at Kiwoom Securities, noted, "Considering that the market conditions for the key bio products are weaker than expected, we are adjusting the target share price downward," adding, "Whether and when to raise prices for key bio products in the second half will be a key point of observation."