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Meritz Securities office building. (Photo=Meritz Securities) |
[Alpha Biz= Reporter Kim Sangjin] Meritz Securities stated on the 30th that CJ CGV (079160) is expected to show improved metrics starting in 2025, as the effects of integrating CJ Olive Networks become more apparent. The firm maintained a "Buy" rating and set a target price of 9,000 won, compared to the previous closing price of 5,540 won.
According to Meritz Securities, CJ CGV's consolidated revenue for the third quarter is projected to be 544 billion won, representing a 33.5% increase year-on-year, while operating profit is expected to reach 36.4 billion won, a 19.4% rise, although this falls short of the market consensus of 49.5 billion won. CJ Olive Networks, which was integrated in June, is anticipated to report third-quarter revenues of 175 billion won and operating profits of 15.1 billion won.
Excluding the integration effects of CJ Olive Networks, the company's revenue is expected to decline by 6.5% year-on-year due to disappointing box office performances of anticipated releases. Furthermore, due to economic downturns, the Chinese box office is forecasted to decline by 27.5% compared to the previous year.
However, the consolidated revenue for this year is projected to reach 1.9416 trillion won, a 25.6% increase year-on-year, with operating profit expected to increase by 125.4% to 110.6 billion won.
In contrast to Southeast Asia, where recovery is underway, the Chinese market is still struggling. CJ CGV plans to reduce fixed costs by closing additional underperforming sites. Analyst Jeong emphasized that in 2024, CJ Olive Networks is expected to account for 21.4% of revenue and 33.1% of operating profit, with the benefits of integration being reflected more significantly in 2025.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
