[Click eStock] "CJ CGV, Theater Recovery Puts It on Normalization Track... Operating Profit Expected at 140 Billion Won"

2023, Annual Surplus Expected After 3 Years
Rapidly Normalizing Theater Environment Positive
Operating Profit Expected to Exceed 2019 Pre-Pandemic Level

Daishin Securities analyzed on the 23rd that the rapidly normalizing theater environment is the key to CJ CGV's performance recovery in 2024. They maintained a 'Buy' investment rating and a target price of 10,000 KRW. CJ CGV's closing price on the 22nd was 5,260 KRW.

Researcher Kim Hoe-jae of Daishin Securities stated, "The nationwide audience in 2023 is expected to be 125 million, which is 55% of 2019," and added, "Since new releases have been actively screened since 2022, most of the backlog accumulated during the pandemic is expected to be cleared by 2024." He continued, "The nationwide audience in 2024 is expected to recover to 143 million, which is 64% of 2019 levels."

CJ CGV's Q4 2023 performance is expected to record sales of 380 billion KRW and operating profit of 15.6 billion KRW. This marks a return to profitability for three consecutive quarters and on an annual basis for the first time in three years. Operating profits are expected to be 13.4 billion KRW in South Korea, 1.9 billion KRW in China, and 1.3 billion KRW each in Turkey and Indonesia. On the other hand, Vietnam is expected to post a loss of 1.7 billion KRW due to delays in scheduling caused by censorship issues with local blockbuster films.

Researcher Kim said, "Upon completion of the in-kind capital contribution of CJ OliveNetworks, which is currently under review, the debt ratio is expected to improve from 529% (as of Q3 2023) to 386%," and added, "With the reflection of CJON from Q2 2024, operating profit in 2024 is projected to reach 140 billion KRW, achieving 117% of the 2019 level."