1. What Caused CJ Freshway’s Weak Q1 Performance?

Despite increased revenue, CJ Freshway experienced a decline in both operating and net profit in Q1 2025. While the food distribution segment saw robust growth, declining profit margins in the food service sector and losses from new business investments hampered overall performance. Macroeconomic headwinds, including rising raw material prices, interest rate hikes, and exchange rate fluctuations, further exacerbated the situation.

2. Key Insights to Watch for in the Q2 IR

The upcoming IR on August 7th will feature the Q2 earnings release and a Q&A session with management. Investors should seek answers to the following key questions:

  • Q2 Performance Improvement: Has CJ Freshway recovered from the Q1 slump and returned to profitability? Is revenue growth sustainable?
  • Food Service Margin Improvement Strategy: Are there factors beyond labor and raw material costs impacting margins? What are the concrete plans to address this?
  • New Business Performance and Outlook: What are the initial results and future revenue projections for new ventures like alcohol sales and logistics brokerage?
  • Freshway-FreshOne Merger Synergies: What are the financial improvements and synergy creation strategies resulting from the merger?
  • Financial Stability Measures: How will CJ Freshway address its rising debt-to-equity ratio and what are its future financial plans?
  • Macroeconomic Risk Management: What strategies are in place to mitigate uncertainties related to raw material prices, interest rates, and exchange rate volatility?

3. Investor Action Plan

Expect potential stock volatility following the IR results. Before making investment decisions, conduct further analysis, including competitor performance comparisons, market share analysis, and raw material price and exchange rate forecasts. Continuously monitor post-IR announcements and market reactions to formulate an appropriate investment strategy.