[Click eStock] "CJ, Expected to Reflect Olive Young Value Increase... Target Price Up"

Target Price Raised by 20% Compared to Previous Level

On the 20th, SK Securities raised the target price for CJ from the previous 125,000 KRW to 150,000 KRW, anticipating that the continuously rising value of CJ Olive Young will be reflected in the stock price. The investment rating was maintained as 'Buy.'

Choi Gwan-soon, a researcher at SK Securities, explained, "The growth of unlisted companies CJ Olive Young and CJ Foodville remains valid, and as the value of CJ Olive Young continues to rise, the possibility of CJ's stock price increasing is high. The target price is raised by 20% due to changing the value of CJ Olive Young from the corporate value of 1.8 trillion KRW at the time of the 2020 paid-in capital increase to 3.4 trillion KRW recognized during the 2024 equity acquisition process."

CJ recorded sales of 11.7 trillion KRW in the fourth quarter of last year, up 9.5% year-on-year, and operating profit increased by 9.9% to 6,301 billion KRW. Researcher Choi analyzed, "The unlisted subsidiaries are performing well. CJ Olive Young showed strong results with fourth-quarter sales and net profit increasing by 19.2% and 37.9%, respectively, driven by inbound foreign tourists and online growth. CJ Foodville also saw fourth-quarter sales and net profit rise by 9.1% and 33.8%, respectively, due to expansion of stores in North America, with annual sales and net profit increasing by 7.6% and 20.4%, respectively."

The value of CJ Olive Young is expected to rise. Recently, CJ Olive Young announced that it will purchase 11.29% of CJ Olive Young shares held by Korea Beauty Pioneer in the form of treasury stock. Researcher Choi stated, "Originally, there was a call option to purchase within three years, and this is being exercised early. As a result, CJ Olive Young's treasury stock will increase from 11.29% to 22.58%. CJ Olive Young is a key subsidiary in the group succession process, and so far, there have been no decisions regarding an initial public offering (IPO), merger with CJ, or in-kind contribution of the largest shareholder's shares to the holding company. However, since an increase in the value of CJ Olive Young is necessary in any case, the attractiveness of CJ Olive Young as an unlisted company is likely to be transferred to CJ's stock price."