[EQUITIES] ‘CJ CGV falters in overheated market’
[THE INVESTOR] CJ CGV will post slow earnings in the second quarter amid mounting competition, said Dongbu Securities on June 19.
As its competitors open more outlets and burden of fixed costs increases, its operating profit in the domestic market will come in at 900 million won (US$793,651) far short of the estimated 6 billion won, said analyst Kwon Yun-gu.
The number of moviegoers rose 3.1 percent on-year in the period and CJ CGV added four directly operated theaters, but failed to offset the lack of blockbuster hit and the closing down of its major branch in Yongsan due to renovation, noted the analyst.
Kwon maintained a “buy” recommendation and 110,000-won target price, however, adding that its operating profit ratio will stabilize after hitting 5.4 percent.
By Hwang You-mee (firstname.lastname@example.org)