KB Securities said on the 7th that for CJ CGV(079160), theater demand is stronger than expected and raising investment from the Public Growth Fund could improve finances. It maintained its investment opinion of "neutral (Hold)" but raised the target price to 6,000 won. The previous trading day's closing price of CJ CGV was 5,400 won.
KB Securities cited as reasons for raising the target price: ▲ theater demand is stronger than expected ▲ considering the potential for financial improvement as 4DPLEX attracts investment from the Public Growth Fund and reflecting a narrower net loss attributable to controlling shareholders in 2026.
The August box office recorded 19.5 million admissions, showing 45% growth from a year earlier.
Choi Yong-hyeon of KB Securities said, "Considering the major film release schedule and the Chuseok holiday in September, demand is expected to remain strong," and added, "Third-quarter operating profit is estimated to reach 56.4 billion won, exceeding the consensus (market average estimate) of 43.8 billion won."
The main reason expected to beat consensus is the increase in moviegoers. KB Securities estimated that third-quarter box office admissions will reach 40 million. The hits of "Odyssey" and "Spider-Man 4," along with policy support, are boosting theater demand.
For the 4DX segment, it estimated operating profit of about 9 billion won as "Spider-Man 4" set its own best performance. In the overseas segment, the China segment is also expected to turn profitable as theater demand recovers, and the Southeast Asia segment is projected to remain stable.
In addition, 4DPLEX is set to raise a 220 billion won investment from the Public Growth Fund.
Choi said, "Through this investment, the financial burden will be reduced, and the global penetration speed of 4DPELX can be increased, which is positive," adding, "Global user demand for premium technology auditoriums has been strengthening recently, and with this investment, 4DPLEX will achieve economies of scale by advancing its technology and increasing the number of screens installed in theaters worldwide."
Meanwhile, CJ CGV is expected to continue profitability-focused management. The number of sites has decreased from about 190 to 176 over the past five years, and it analyzed that a gradual further decline remains possible.
Choi said, "If industry conditions improve through cost structure efficiency, operating leverage will strengthen."