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Photo= Yonhap news |
[Alpha Biz= Reporter Kim Sangjin] On November 11, KB Securities reduced its target price for CJ Logistics from 150,000 won to 125,000 won, citing limited growth in direct purchase (D2C) volume despite the company exceeding earnings expectations for the third quarter.
KB Securities noted that CJ Logistics reported operating profit of 141.6 billion won in the third quarter, a 13.5% year-on-year increase, which was 13.8% above market consensus. The firm's overseas subsidiaries showed growth, and non-parcel business operating profit increased by 26.8% compared to the previous year, partly due to a surge in container shipping rates. However, parcel business operating profit fell by 3.1%, due to underwhelming direct purchase volume and e-commerce shipments.
KB Securities revised its full-year operating profit estimate for CJ Logistics upward, adjusting it from 521 billion won to 532 billion won, a 2.2% increase. However, due to bottlenecks in customs procedures limiting direct purchase volume growth, the firm lowered next year's operating profit forecast from 547 billion won to 543 billion won, a 0.7% decrease.
Despite the downward revision of the long-term parcel business outlook, KB Securities highlighted CJ Logistics' competitive edge in contract logistics (CL), logistics consulting, and operations, noting that the company continues to grow its contract logistics segment. Additionally, with a recent 11.4% drop in stock price over the past three months, KB Securities maintained its 'Buy' rating on the stock.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
