[Click eStock] "CJ, Olive Young's Record High Performance... Peak Is Still Far"

Olive Young Anticipates High Growth in Japan and North America
Foodvill Sees Rapid Growth in North American Market... Tous Les Jours Stores on the Rise

On the 16th, DS Investment & Securities maintained its 'Buy' rating and target price of 180,000 KRW for CJ, stating that the growth potential of its subsidiary Olive Young is still substantial. CJ's closing price on the previous trading day was 116,800 KRW.

Kim Suhyun, a researcher at DS Investment & Securities, said, "Olive Young is expected to sustain high growth in the short and medium term through its expansion into Japan and strengthened marketing focused on North America and Japan," adding, "There is also growing interest in future utilization plans such as treasury stock cancellation." Foodville is experiencing high growth in the North American market, with Tous Les Jours stores expected to increase from 108 in 2023 to 163 in 2024. Foodville's book value was assessed at 100 billion KRW, but it recently received a valuation of 600 billion KRW during a funding round.

CJ's consolidated sales for the second quarter reached 10.7 trillion KRW, up 3.8% year-on-year, while operating profit rose 33.6% to 666 billion KRW. This improvement is attributed to the enhanced operational efficiency of its affiliates, leading to better profitability. CJ CheilJedang increased by 11.4% year-on-year, and ENM turned profitable with a net income of 65.4 billion KRW. CGV also achieved a 41% growth in operating profit. Unlisted subsidiaries continued to show improved net income trends, with Olive Young recording a 22% increase and Foodville a 12.3% rise. A disposal gain of 164.2 billion KRW from the 100% in-kind contribution of Olive Networks common stock was recognized as other net income.

Notably, Olive Young recorded its highest-ever performance with second-quarter sales of 1.2 trillion KRW, a 24.8% increase year-on-year. Net income also grew 22% to 124.9 billion KRW. The foreign sales growth rate in the second quarter is estimated at about 60%, attributed to the expansion of flagship stores and increased recognition of K-beauty. Online sales rose 35% to 329.8 billion KRW, accounting for 27.3% of total sales.