[Click eStock] CJ Logistics Lowers Net Profit Estimates... Target Price Down

On the 8th, Samsung Securities projected that CJ Logistics' net profit for this year would decrease more than expected. Accordingly, they maintained the investment rating at 'Hold' but lowered the target stock price to 95,000 KRW.

Researcher Kim Young-ho of Samsung Securities stated, "We are lowering the 2023 net profit estimate by 10%."

Researcher Kim explained, "It is encouraging that the average selling price (ASP) in the parcel delivery sector continues to rise, but the growth in shipment volume is somewhat sluggish. The poor shipping market conditions persist, so it will take time for the global segment's performance to improve as well."

In the first quarter, sales amounted to 2.8 trillion KRW, a 1.7% decrease compared to the previous year. Operating profit surged 30.9% to 99 billion KRW, meeting market consensus.

By segment, parcel delivery sales increased by 7.6% year-on-year to 910.8 billion KRW. The ASP was 2,318 KRW per box, up 6.8% from the previous year, while shipment volume (390 million boxes) rose by 0.8%.

Operating profit has improved for nine consecutive quarters since the first quarter of 2021. High-margin fulfillment volume surged 62% year-on-year to approximately 1.36 million boxes, but this represented only a 3.6% increase compared to the previous quarter.

Researcher Kim pointed out, "Considering the base effect from the parcel delivery union strike in the first quarter of last year, the shipment volume trend is somewhat sluggish," adding, "The growth momentum appears to be slowing down."

In the CL segment, P&D (port transportation) sales increased by 2.2% to 390.7 billion KRW, supported by growth in port cargo volume. W&D (warehouse logistics) sales rose 9.1% to 288.7 billion KRW due to expanded orders from large customers.

The global segment continued to underperform. Sales fell 16.8% year-on-year to 1.0361 trillion KRW, and operating profit decreased 18% to 14 billion KRW. Researcher Kim analyzed, "The main cause is the downturn in the forwarding segment due to worsening shipping market conditions."