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Photo = Yonhap news |
[Alpha Biz= Paul Lee] Hyundai Motor Securities assessed that Amorepacific is expected to turn around after restructuring its operations in China by 2025, while its strong growth in North America and Europe, driven by the Laneige and Innisfree brands, continues. The firm maintained its "Buy" investment rating and target price of 150,000 KRW.
On the 28th, Hyundai Motor Securities stated, "In Q1, Amorepacific's consolidated revenue is expected to reach 1.0457 trillion KRW, a 14.7% increase year-on-year, while operating profit is expected to rise by 31.2% to 95.3 billion KRW, aligning with market consensus."
By segment, the domestic market is projected to record revenue of 560.6 billion KRW and operating profit of 45 billion KRW, reflecting declines of 0.5% and 8.4% year-on-year, respectively. Analyst Ha noted, "Although domestic cosmetics sales in duty-free channels remain weak (-22% YoY) and growth in traditional channels has slowed, the solid expansion of multi-brand stores (MBS) and cross-border channels continues."
Globally, revenue in China is estimated to have declined by 21% year-on-year, with an operating loss of 7.5 billion KRW.
Hyundai Motor Securities explained, "Although revenue declined due to continued restructuring of channels and profitability since Q2 last year, including the reduction of Laneige stores, it is positive that the deficit has been gradually shrinking as restructuring nears completion." The firm further noted, "Most of the deficit reduction is expected in the first half of the year, with a turnaround anticipated in the latter half."
In Western markets, excluding COSRX, strong performance in the U.S. and Europe is expected to continue. The analyst stated, "In Q1, North America's Laneige brand (with two new product launches) and Innisfree are expected to grow more than 20% year-on-year." Furthermore, "In February, Aestura products entered 300 Sephora stores, and in Europe, Laneige and Innisfree are expected to sustain growth of over 40%." The firm added, "Future expansion in European MBS channels and online platforms is expected to drive further growth."
Regarding COSRX, revenue is forecast to decline by 23% year-on-year to 120.4 billion KRW, with an operating profit of 30.6 billion KRW. The analyst commented, "Although revenue continues to decline due to the ongoing depletion of North American retail inventory, growth is expected once pricing and channel adjustments are completed." He further noted, "If COSRX shows a clear trend of recovery, additional momentum could be realized."
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
