April 23, 2024

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[THE INVESTOR] CJ Hello could be an acquisition target soon, said Mirae Asset Daewoo on June 28, maintaining a “trading buy” recommendation and raising the target price to 12,000 won (US$10.71) from 8,000 won.

As the regulation on 33.33 percent share in paid television sector has been lifted, KT can now take over a cable television operator, and it is likely to eye industry leader CJ Hello. Its earnings, however, will not be able to recover as fast as expected as its profits have been weighed down by the decline in average revenue per user in the wake of sliding revenue from video on demand service, and the increase in mobile virtual network operator business, said analyst Lee Hak-mu.

The communications industry will continue to struggle for the time being. However, CJ Hello’s operating profit in the second quarter will climb up 7.7 percent from the previous quarter to 14.3 billion won, he added.

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