Korea Investment & Securities announced on August 10th that it managed to turn its operating profit to a surplus in the second quarter of last year, but it was disappointing that it did not meet market expectations and lowered its target price from 77.96 dollars to 69.10 dollars. Investment opinions maintained the ‘price’ ratings.
CJ CGV’s second quarter sales grew 5.8 percent year-on-year to 362.2 million dollars, and its operating profit turned to 239,182 dollars. However, operating profit consensus was significantly lower than its estimate of 10.54 million dollars.
“In the South Korean market, profits improved due to base effect, which had an operating loss of 7.97 million dollars due to the impact of the renovation of the Yongsan CGV I-park in the same period last year,” said Choi Min-ga, a researcher at the Korea Investment & Securities.
Performance in the Chinese and Turkish markets was also sluggish. “China has suffered a sluggish market due to the delayed opening of commercials and the company’s operating profit has been adversely affected by the increase in expenses due to net additions to the site. Turkey has worsened due to political issues and the weakness of the lira as well as the movie market,” added researcher Choi.
In response, researcher Choi lowered the target share price of CJ CGV, considering the fact that estimates of profits in South Korea have decreased and global market conditions are unstable.
However, expectations about the third quarter performance were revealed. “In the high season of the third quarter, South Korea’s box office sales are showing strong performance, and China is saving the base burden from the second half of the same year. The Vietnam’s corporate sector is also expected to continue to improve its profits as it is expected to be listed within this year,” said researcher Choi.
