Samsung Securities announced on August 11 that it has raised its target price for CJ CGV from 5,300 won to 6,200 won, citing the company's efforts to differentiate the movie-going experience through special theaters and non-film content. However, the firm maintained a 'neutral' investment rating due to ongoing financial burdens, including high financing costs.
Choi Min-ha, a researcher at Samsung Securities, stated, "CJ CGV is enhancing the unique experiences available only in theaters by leveraging technology-driven special theaters like ScreenX and 4DX, as well as CGV Only content. Interest in special theaters is rising, coinciding with the global expansion of these technologies and the release of Hollywood blockbusters."
He added that the company is continuing to improve its business structure by closing unprofitable locations and reducing fixed costs across its domestic and international operations. The focus is on strengthening the competitiveness of special theaters and renewing sites to enhance the profitability of key locations.
Thanks to a strong domestic box office in the first half of the year, the company's revenue increased by 26% compared to the same period last year, while domestic operating losses were significantly reduced to 12.8 billion won from 48.3 billion won in the previous year. Although Vietnam continued to show profitability, China experienced a shift to operating losses due to the high base effect from last year's 'The Nun 2,' and Indonesia also saw a decline in profits.
Choi noted that while the company improved its operating profit in the second quarter and returned to net profitability, this was partly due to the reduction of lease liabilities from site closures. He emphasized that financial burdens remain high, with ongoing financing costs of around 50 billion won per quarter.
He concluded, "The global expansion of specialized theaters like ScreenX and 4DX is a positive development for the value of related businesses. However, given the ongoing uncertainty regarding financial burdens, we maintain a 'neutral' investment rating and adjust the target price to 6,200 won to reflect changes in valuation estimates."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.