[Click eStock] "Record-breaking 4Q CJ Daehan Tongun, Growth Continues Despite Domestic Slowdown"

Improved Parcel Delivery Profitability Despite Domestic Slowdown
Expectations for Cooperation with Shinsegae, Ali, and Naver

CJ Logistics achieved record-breaking performance in the fourth quarter of last year by improving parcel delivery profitability despite concerns over a slowdown in e-commerce demand. There is a forecast that the company can continue steady growth by leveraging its smart logistics competitiveness despite domestic demand slowdown concerns.

On the 12th, Korea Investment & Securities maintained its 'Buy' rating and target price of 130,000 KRW for CJ Logistics based on this background. The closing price the previous day was 88,900 KRW.

CJ Logistics posted its best-ever results in the fourth quarter of last year. Revenue reached 3.1603 trillion KRW, and operating profit was 154.3 billion KRW, increasing by 3.3% and 7.2% respectively compared to the same period last year. These record results slightly exceeded market consensus. Although concerns about a slowdown in e-commerce demand existed, parcel delivery profitability improved, pushing operating profit 4% above consensus.

Parcel delivery operating profit was 69.6 billion KRW, marking the second-best performance ever. Although cargo volume decreased by 4% due to domestic economic stagnation, efficient operations based on automation restored the operating profit margin to the 7% range for the first time in four quarters. Contract logistics (CL) and overseas divisions maintained profits at the previous quarter’s level. The W&D (Warehousing & Distribution) division also grew by 17% for two consecutive quarters, defying the domestic economic slowdown.

Based on this, differentiated growth is expected this year as well. In particular, W&D order expansion is anticipated to accelerate sharply. By proactively absorbing new third-party logistics demand and strengthening competitive advantages, W&D sales are expected to grow in the double digits this year.

Choi Go-woon, a researcher at Korea Investment & Securities, explained, "The current decline in cargo volume is temporary, as cooperation with major clients such as Shinsegae, Ali, and Naver is expected to accelerate in parcel delivery, which started seven-day-a-week service. Rather than worrying about the domestic economy, it is time to focus more on this year’s opportunities such as Maeil One (seven-day delivery service), strategic cooperation with Shinsegae, and the expansion of domestic investments by Chinese companies like Ali and Temu."