Hana Securities said Tuesday it lowered its target price for CJ Logistics to 165,000 won, citing clearer signs of a downturn in its forwarding business. The brokerage maintained its “buy” rating, saying the company’s mid- to long-term growth outlook remains intact.
In a report, Hana Securities analyst Ahn Do-hyeon said the firm had previously projected CJ Logistics’ full-year profit growth at 10% on rising parcel volumes and expansion in its warehousing and distribution (W&D) business, but cut its estimate to 2%.
Ahn said the parcel unit is seeing operating leverage from volume growth, but profitability improvement in the global division is likely to be slower than expected. He added that higher oil prices since the war are expected to raise costs in the contract logistics (CL) unit and could also weigh on port cargo volumes.
He said the W&D unit acquired logistics assets from major commerce companies such as E-Mart in 2025, but profitability gains are being delayed as the company works to stabilize the centers.
Ahn forecast first-quarter revenue of 3.097 trillion won, up 4% from a year earlier, and operating profit of 99.1 billion won, up 16%, for an operating margin of 3.2%. He said parcel volume is expected to rise 14% from a year earlier, far outpacing market growth of 6%, and that CJ Logistics’ parcel market share continues to increase.
However, he said that despite W&D growth, overall CL revenue is expected to rise 5% year over year due to weaker port volumes. Global revenue is estimated to fall 6%, he said, adding that while the U.S. and India units are performing well, a postwar contraction in the forwarding business is becoming more visible.
Still, Ahn said CJ Logistics’ growth trajectory “remains valid” in broad terms. He said the parcel business is expected to grow by gaining market share on the back of the company’s seven-day delivery service, and that CJ Logistics’ W&D business should improve profitability as outsourcing expands in the domestic W&D market.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.