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A view of CJ CheilJedang headquarters. (Photo: CJ) |
[Alpha Biz= Paul Lee] Seoul, South Korea — July 9, 2025 — IBK Investment & Securities announced its earnings outlook for CJ CheilJedang’s second quarter, forecasting that operating profit will fall approximately 5% short of market expectations. Despite the expected shortfall, the firm maintained its Buy rating and target price of KRW 310,000, citing improving margins from the third quarter onward due to easing cost pressures.
According to analyst Taehyun Kim, consolidated revenue for Q2 is projected to reach KRW 7.3431 trillion, up 1.4% year-over-year, while operating profit is expected to decline 6.9% to KRW 357.2 billion. These figures are largely in line with IBK’s own estimates (KRW 7.3801 trillion revenue, KRW 352.1 billion operating profit) but slightly below the market consensus (KRW 7.3912 trillion revenue, KRW 374.0 billion operating profit).
“Domestic food sales remain under pressure due to sluggish consumer spending, and overseas markets—especially in the Americas—face intensified competition,” Kim noted. “That said, concerns appear to be largely priced in, as reflected in the share performance. From Q3 onward, the benefits of recent price hikes should begin to materialize, alleviating raw material cost burdens and driving profit recovery.”
By segment, the food division is forecast to post KRW 2.7638 trillion in sales (+2.2% YoY) and KRW 96.7 billion in operating profit (-28.8% YoY). Domestic sales are expected to decline 1.6%, while overseas sales may rise 6.1%. Kim added that although input cost pressures remain in Korea, the pie production line in the U.S. resumed operations in May and is likely to normalize by mid-Q3. Europe, Japan, and China are expected to see continued double-digit growth.
In the bio segment, sales are projected at KRW 1.0722 trillion (+1.5%) and operating profit at KRW 107.2 billion (+8.3%). The analyst cited strong demand for lysine, a 15% rise in European spot prices, and robust performance from subsidiary Selecta as key growth drivers.
“During H1, CJ CheilJedang took a volume-led pricing strategy in the tryptophan market—where it holds a 90% share—to fend off new entrants,” Kim noted. “However, we expect pricing to normalize in the second half.”
For the F&C (Food & Culture) division, IBK forecasts sales of KRW 530 billion (-7.0%) and operating profit of KRW 46.1 billion (+35.2%). While top-line growth will likely remain constrained due to restructuring of underperforming operations in Vietnam, higher pork prices are expected to drive a notable improvement in profitability.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
