April 19, 2024

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[THE INVESTOR] CJ CheilJedang’s earnings and stock price hit bottom in the first quarter and will begin to recover, said Korea Investment and Securities on May 22, maintaining a “buy” recommendation and 500,000 won (US$446.83) target price.

Its foodstuff division dragged down the earnings in the period with 2 percent operating profit ratio but will improve from the second quarter as raw sugar prices begin to fall, said analyst Lee Gyeong-ju. 

The foodstuff and animal feed markets will pick up in earnest from the third quarter while operating profit ratio of processed food will rise, forecast the analyst. 

The home meal replacement sector is growing fast and will pass the break-even point in the third quarter, according to Lee, adding that the company might seek an overseas M&A but it will not lead to a fall in stock price. 

By Hwang You-mee (glamazon@heraldcorp.com)