SK Securities said on the 19th that CJ Olive Young's strong results are expected to be reflected in CJ's share price, but added that to drive a sustained uptrend in the stock, performance at listed subsidiaries needs to improve. It maintained a Buy rating and raised its target price to 230,000 won. CJ's previous closing price was 200,000 won.
CJ's fourth-quarter results last year were 11.4 trillion won in revenue and 712.3 billion won in operating profit. Those figures rose 1.6% and 13.6% from a year earlier, respectively.
Choi Gwan-soon, an analyst at SK Securities, said, "Although major listed affiliates such as CJ CheilJedang, CJ ENM, and CJ CGV posted net losses in the fourth quarter, CJ Olive Young's improved results drove improvement in consolidation results."
CJ Olive Young posted 1.5804 trillion won in revenue and 132.9 billion won in net profit in the fourth quarter. For the full year, it reported 5.8 trillion won in revenue and 744.7 billion won in operating profit. Those figures were up 21.8% and 22.5% from a year earlier, respectively. Net profit rose 15.8% from a year earlier to 554.7 billion won.
Choi said, "Balanced growth in offline sales, which expanded as the number of foreign visitors to Korea increased, and online sales, which grew on rising user numbers, drove strong growth and profitability."
CJ Foodville also exceeded 1 trillion won in full-year revenue last year, posting double-digit growth.
SK Securities projected that CJ Olive Young's strong results will be reflected in CJ's share price. It also said that for the stock to rise in a sustained trend, performance improvement at listed subsidiaries is necessary.
According to the consensus (market average forecast), CJ CheilJedang and CJ ENM, which recorded net losses in the fourth quarter last year, are expected to swing to profit in the first quarter this year. As a result, a positive trend is anticipated for CJ's share price.