[Click eStock] CJ CGV, 150 Billion Won Rights Offering 'Target Price Downgrade'

[Asia Economy Reporter Lee Seon-ae] Daishin Securities announced on the 8th that it maintains a buy rating on CJ CGV but lowers the target price by 11% to 32,000 KRW.

Researcher Kim Hoe-jae explained, "The target price was calculated using the SOTP method by combining the 2021 performance of the headquarters, Turkey, CGI (Southeast Asia SPC), and 4DX, and was lowered reflecting a 1.5 trillion KRW rights offering. However, the buy rating is maintained considering the headquarters' return to profitability in Q2 and the forecast of consolidated profitability from Q3 onward."

The stock price is expected to fluctuate between the 40 billion KRW convertible bond conversion price, issued in July and convertible from August, and CGV's call option price range of 22,000 KRW to 29,000 KRW.

This year, the domestic movie audience is projected to be 130 million, which is 56% of the 2019 level. Domestic operating profit is expected to be 16 billion KRW, and consolidated operating profit is forecasted at 3.7 billion KRW. If the domestic audience recovers to 75% of the 2019 level, operating profit is expected to return to the 2019 level. It is anticipated that profits will recover to the 2019 level in 2024?2025.