The CJ stock 'buy' opinion was maintained.
Profitability of major unlisted subsidiaries CJ Olive Young and CJ Foodville is improving.
Hi Investment & Securities maintained its CJ target price of KRW 133,000 and 'buy' investment opinion on the 7th.
CJ Olive Young is expected to increase profitability by strengthening its online operations under the monopoly system with a 50% market share in the health & beauty (H&B) market.
CJ Olive Young's share of online sales rose from 10.6% in 2019 to 17.9% in 2020 and 23.4% in the first quarter of 2021. CJ Foodville is expected to turn into a surplus in 2021. CJ Foodville has franchises such as VIPS, Seasonal Table, The Place, and Cheil Jemyeonso.
The number of CJ Foodville stores decreased from 2,558 in the first quarter of 2019 to 1,525 at the end of 2020. In particular, the number of direct management stores decreased from 230 to 92 during the same period, significantly reducing fixed costs.
CJ is expected to generate 3.5539 trillion won in consolidated sales and 1.928 trillion won in operating profit in 2021. Sales are up about 11.1% and operating profit is up about 38.7% from 2020.
Reporter Lee Dong-hoon usinvestmentidea2020@gmail.com
