[Click eStock] "CJ Daehan Tongun, Strong Q1 Performance Expected Due to Increased Cargo Volume"

Ebest Investment & Securities Issues 'Buy' Rating and 200,000 KRW Target Price... Closing Price on 17th at 118,500 KRW

[Asia Economy Reporter Geum Bo-ryeong] CJ Logistics is expected to show strong performance in the first quarter of this year as the volume of goods increased thanks to the novel coronavirus disease (COVID-19).

According to Ebest Investment & Securities on the 18th, CJ Logistics' consolidated sales for the first quarter of this year are estimated to be 2.5227 trillion KRW, up 3.7% from the same period last year, and operating profit is expected to increase by 80.2% to 81.7 billion KRW.

Due to COVID-19, online shopping for daily necessities and groceries has increased, leading to a significant rise in parcel delivery volume. Orin Ah, a researcher at Ebest Investment & Securities, said, "In January this year, while the volume of quarantine items such as masks and sanitizers increased, the volume from and to China decreased, so the overall effect is estimated to have been minimal. However, in February and March, the spread of COVID-19 strongly boosted online shopping growth, and the parcel volume of CJ Logistics in the first quarter is expected to reach 368 million units, up 20.1% from the same period last year." She added, "Due to the sharp increase in parcel volume beyond expectations caused by COVID-19, we believe CJ Logistics has entered a phase where volume leverage occurs."

In the Contract Logistics (CL) sector, while industries related to China are sluggish, the consumer goods sector is experiencing increased volume, partially offsetting the decline in sales. The first quarter CL sales are estimated to decrease by 0.7% from the same period last year to 618.7 billion KRW.

Ebest Investment & Securities gave CJ Logistics a 'Buy' rating with a target price of 200,000 KRW. The closing price on the 17th was 118,500 KRW.