On the 22nd, Samsung Securities anticipated that CJ would greatly benefit Olive Young if the offline cosmetics market rebounds. Accordingly, they maintained a 'Buy' investment rating and raised the target price by 12% to 123,000 KRW.
Hong Junhyuk, a researcher at Samsung Securities, stated, "If the offline cosmetics market rebounds, the benefits will be significant," adding, "The stock price increase could continue."
Researcher Hong explained, "CJ has previously experienced a situation in 2015 when the number of Chinese visitors to Korea surged, where the stock price moved more elastically than the net asset value (NAV) seen in other holding companies (with a level where a 1 increase in NAV corresponded to a 2 increase in market capitalization)."
He continued, "If the mask-wearing mandate is lifted and Chinese visitors to Korea coincide, demand could increase significantly," adding, "In particular, travelers are likely to have low price sensitivity, and with few domestic H&B store competitors, expectations for further profitability improvement are valid."
CJ Olive Young's operating profit in 2022 was 274.5 billion KRW, a 98% increase compared to the previous year. Researcher Hong noted, "CJ Olive Young showed highly visible performance by recording a steady sales growth rate of around 30% year-on-year for four consecutive quarters in 2022," and added, "The year-on-year sales growth rate for January and February 2023 is also estimated to be at a very favorable level, not significantly different from the fourth quarter of last year."
He further evaluated, "Considering that the Korean cosmetics retail sales index in January shrank compared to the previous year, it is judged that CJ Olive Young continues to demonstrate competitiveness."
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