Actively Developing Vegan-certified Food Materials
The author is an analyst of NH Investment & Securities. She can be reached at mj27@nhqv.com. -- Ed.
CJCJ’s key processed food and bio business divisions are displaying sound near-term earnings. They have also secured mid/long-term growth drivers by expanding into the alternative food and biodegradable plastic arenas.
Displaying positive mid/long-term direction
We maintain a Buy rating and TP of W650,000 on CJCJ. Despite relatively tepid near-term momentum due to y-y high-base effect, we positively view the robust earnings and mild/long-term direction at the processed food and bio divisions. Sales of biodegradable plastic are to be reflected from 1H22. CJCJ plans to ramp up its polyhydroxyl alkanoate (PHA) production capacity from 5,000 tons in 2022 to 65,000 tons in 2025. Helped by eco-friendly movements around the globe, related sales are projected to expand rapidly. At the processed food division, alternative food products are to serve as a new growth engine.
Entering alternative food markets at home and abroad
CJCJ has entered the alternative food market in earnest with the launch of its 100% vegan food brand PlanTable at end-2021. Unlike meat products whose exports are largely restricted due to regulations, PlanTable products can be exported to virtually all countries around the globe as they use 100% plant-based ingredients. Thus, CJCJ plans to expand its PlanTable product lineup and enter markets in the Americas and Europe, and even the halal food market. Considering the firm’s sales capability in Korea and growing demand for vegan food around the world, steep growth is expected.
Actively developing vegan-certified food materials
CJCJ is also actively developing alternative food materials, as vegan product demand is on the rise in the food materials market. The company recently acquired vegan certification by developing food materials that contain/use no animal ingredients in the manufacturing process. CJCJ is rapidly growing its food materials business by signing a supply contract for TasteNrich and FlavorNrich with a global firm.