KB Securities said on the 6th that CJ Logistics is expected to benefit if regulations on large retail stores are eased. It raised its target price to 140,000 won from 130,000 won and kept its investment rating at "buy." The previous trading day's closing price of CJ Logistics was 109,400 won.
Recent reports said the ruling party, government, and presidential office discussed adding a clause to the Distribution Industry Development Act's "regulations on late-night operations and mandatory closure days for large-scale stores" stating that "this does not apply to business activities for e-commerce." If such an exception clause is added, business activities such as late-night packing, carry-out, and delivery could be possible at hypermarkets and corporate supermarkets.
Kang Seong-jin, a KB Securities analyst, said, "With deregulation, Daehan Tongwoon could benefit from an increase in new dawn-delivery volumes," and explained, "In dawn delivery, fresh food accounts for a large share, and CJ Logistics exclusively handles dawn delivery for E-MART, which is strong in fresh food."
Last year, CJ Logistics' dawn-delivery revenue is estimated at 160 billion won, and its domestic dawn-delivery market share is estimated at 7% to 21%.
Kang also said that if regulations are eased, the increase in dawn-delivery volumes is expected to help spread out parcel delivery times. Kang said, "If deregulation of large stores spreads parcel delivery times, volumes can grow without additional investment in terminals and trunk-line vehicles."