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[Alpha Biz= Reporter Kim Minyoung] SK Securities downgraded its target price for CJ Corporation (001040) from 160,000 Korean won to 140,000 Korean won on June 15th. Despite expecting CJ to exceed market expectations for the second quarter of this year, with operating profit projected to increase by 31.7% year-on-year to 656.9 billion won and sales to rise by 6.4% to 10.9534 trillion won, SK Securities adjusted the target price downwards due to a revised discount rate on subsidiary valuations (from 20% to 35%).
The brokerage maintains a 'buy' rating on CJ, citing recent increases in net asset value despite a decline in CJ's share price, which they see as creating buying opportunities. They anticipate growth in operating profit for major listed subsidiaries like CJ CheilJedang and CJ CGV, along with CJ ENM returning to profitability.
SK Securities also forecasts strong growth for unlisted subsidiaries such as CJ Olive Young, projecting a 21.6% increase in revenue and a 10.3% increase in net profit, and for CJ Foodville, expecting a 21.3% increase in revenue and a 13.9% increase in net profit due to overseas expansion efforts.
Notably, they expect CJ Olive Young to maintain high growth throughout the year, forecasting a 20.5% year-on-year increase in net profit to 418.6 billion won and a 23.8% increase in revenue to 4.781 trillion won for the year.
Alphabiz Kim Minyoung (kimmy@alphabiz.co.kr)
