April 26, 2024

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[THE INVESTOR] CJ’s decision to acquire 40 billion won (US$35.73 million) stake of its own will be positive to its stock price, said Daishin Securities on July 6. 

It announced that it would repurchase 287,770 common shares (1 percent stake) on the previous day. 

CJ’s stock price has been weakening as investors were concerned about strengthening regulations on holding companies as well as the slowing down of its key private subsidiary CJ Olive Networks, said analyst Yang Ji-hwan.

This is the first time it is purchasing its own stocks since it turned to a holding company in 2007, and the decision reflects its will to stabilize the stock price and promote shareholder value, and will be positive on investor sentiment as it bolsters stock price amid uncertain market conditions, noted the analyst.

CJ’s second-quarter revenue will increase 6.1 percent on-year to 6.9 trillion won and operating profit 22.4 percent to 364.3 billion won, estimated Yang. Its stock price is currently discounted at 59 percent, close to the record 61.5 percent, he added, recommending to purchase from a valuation perspective.

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