Investors should confirm whether CJ Korea Express
’ M&A has actually improved its profits before applying a valuation premium, Kiwoom Securities said Jan. 3, lowering its target price for the stock to 190,000 won (US$178.64) from 200,000 won.
CJ Korea Express used 529,398 shares of its own when it merged with CJ E&C last year and it would have been better to use it to acquire a foreign logistics firm than to merge with a construction affiliate, analyst Cho Byeong-heui said.
Meanwhile, despite the rise in delivery volumes, it will not be easy to raise profitability until its automated terminal in Gonjiam, Gyeonggi Province, ent ers full operation, noted the analyst.
Investors, however, should consider the company’s dominant market share in the delivery sector and its remaining means for investment, said Cho maintaining a “buy” recommendation.
By Hwang You-mee (email@example.com