(Photo = Yonhap news)

 

[Alpha Biz= Reporter Kim Jisun] CJ Freshway's operating profit in the first quarter of this year is expected to fall below market expectations, a report showed. Kiwoom Securities maintained its investment opinion 'buy' and adjusted its target price from 41,000 won to 38,000 won.

Kiwoom Securities said, "CJ Freshway's consolidated sales in the first quarter of this year were 732.3 billion won (+5% year-on-year) and operating profit was 10.7 billion won (-
"It is expected to be 16%," he said. "Operating profit will fall short of market expectations due to the slowdown in the restaurant industry."

"Sales growth in the food distribution sector will slow significantly compared to the previous quarter as sales of retailers' channels deteriorate due to the slowing restaurant market," Kiwoom Securities said. "In the food service sector, despite the expansion of new orders, sales growth will slow down due to strikes by hospital majors."

"The slowdown in the restaurant business may continue in the medium term, but sluggish sales of hospital routes is likely to be a temporary phenomenon," Kiwoom Securities said. "It is expected that we will continue to control control costs in the mid- to long-term and gradually expand our online business."

Kiwoom Securities analyzed, "The growth of the online business in the future will be an important variable for the valuation level." CJ Freshway's sales this year rose 7% year-on-year to 3.289 trillion won and operating profit increased 7.2% to 106.4 billion won.

 

 

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