Thursday, April 17th, 2014
SEOUL, KOREA - Shinhan Investment & Securities said on April 17 that CJ CheilJedang will see its share price rebound thanks to a rise in the selling price of lysine, the essential amino acid in animal feed, in the latter half of this year. The securities firm adjusted the stock's target price upward to 350,000 won from 340,000 won, with the investment opinion maintaining at "buy."
It forecast the company's first-quarter sales revenue and operating profit at 1,772.1 billion won and 65.3 billion won, respectively, down 1.4 percent and 42.4 percent from the same quarter last year.
Shinhan Investment & Securities analyst Cho Hyun-A said, "The company's first-quarter performance won't be so good as widely expected. That's because the selling price of lysine that peaked at US$1,389 per ton in the fourth quarter last year is expected to decline to $1,208 by the first half."
CJ CheilJedang's sales revenue for the whole year was estimated at 7,528.1 billion won, up 4.4 percent from 2013, with operating profit rising 11.5 percent to 386.4 billion won.
Cho of Shinhan Investment added, "Last month Global Biochem Technology announced that it would scale down its lysine output by 200,000 tons, which would boost the lysine price. The Chinese company has already begun reducing the output and the price-cut effect will materialize by the time the inventory runs out."