[Featured Stock] CJ Daehan Tongun Rises on Logistics Cooperation with Shinsegae Group

CJ Logistics is showing strong performance amid expectations of improved earnings following news of logistics cooperation with Shinsegae Group.

As of 9:45 a.m. on the 14th, CJ Logistics is trading at 102,700 KRW, up 3,200 KRW (3.22%) from the previous session on the KOSPI market.

The trading volume stands at 36,000 shares, with a trading value of approximately 3.7 billion KRW. The stock price opened higher at 100,400 KRW, surged to a high of 103,500 KRW, before giving up some of the gains.

Daishin Securities analyzed that CJ Logistics’ sales could increase by 300 billion KRW annually through logistics cooperation with Shinsegae Group.

Researchers Yang Ji-hwan and Lee Ji-ni from Daishin Securities stated, "CJ Logistics has decided to pursue logistics cooperation with Shinsegae Group. Accordingly, CJ Logistics is expected to be entrusted with the operation and delivery of logistics for Gmarket and SSG.com."

The volume of Gmarket Smile Delivery under Shinsegae affiliates is about 2.5 million shipments per month, and SSG.com’s dawn delivery and SSG Delivery volume is about 2 million shipments per month. The annual delivery volume is estimated to reach approximately 50 to 55 million shipments. This corresponds to about 3.4% of CJ Logistics’ parcel handling volume of approximately 1.6 billion shipments in 2023.

The stock price had fallen about 20% over the past three months due to consumer dissatisfaction with the growth of direct purchases from China and government regulatory moves. However, there is analysis that growth is expected through cooperation with Shinsegae Group.

The two researchers added, "Furthermore, if Shinsegae Group entrusts CJ Logistics with the purchase volume of agricultural products from Emart’s production areas, the volume could increase up to 100 million shipments annually. Although there are concerns about the slowdown in growth of direct purchases from China, CJ Logistics’ direct purchase handling volume in the second quarter is expected to reach about 18 to 19 million shipments."