[Click eStock] "Aekyung Industrial, Hygiene Product Exports Expected to Boost Sales in Second Half"

Hyundai Motor Securities Report Forecasts 11.6 Billion KRW Operating Profit in Q2

[Asia Economy Reporter Minji Lee] Hyundai Motor Securities maintained a buy rating on Aekyung Industrial on the 12th and set a target price of 32,000 KRW. This outlook is based on the expectation that the sales increase effect from hygiene product exports will begin to appear in earnest after the second quarter.

Aekyung Industrial is expected to record consolidated sales of 152.6 billion KRW and operating profit of 11.6 billion KRW in the second quarter. These figures are forecasted to decrease by 4.8% and 6.9%, respectively, compared to the previous quarter.

The cosmetics segment is estimated to record 59.3 billion KRW, down 16% from the first quarter. Duty-free channel sales are expected to decline by about 45% compared to last year due to a sharp drop in general inbound traffic. Sales in the main home shopping channel are also projected to decrease by approximately 35% year-on-year, as the number of broadcasts continues to decline following the first quarter. However, the addition of new SKUs such as ampoules and tone-up creams is expected to partially offset the downturn in the color cosmetics segment.

The effect of the main brand’s entry into the H&B channel is anticipated to gradually contribute to consolidated sales starting from the third quarter, when channel traffic is expected to recover significantly. In the overseas segment, sales related to China’s largest e-commerce shopping event in the first half, 6.18, are expected to grow compared to last year, partially offsetting the domestic channel sales slump.

Hyundai Motor Securities analyst Hyejin Jeong stated, “Demand in China is an indicator that can confirm the company’s medium- to long-term growth potential,” adding, “As traffic in duty-free and H&B channels gradually improves, performance is expected to recover steadily.”

The household goods segment is expected to record sales of 93.3 billion KRW, up 9.5% from the same period last year. Hygiene products, which showed strong domestic sales in the first quarter, are expected to generate overseas sales starting from the second quarter. Analyst Jeong explained, “The total annual sales of the entire hygiene product portfolio in 2020 will reach 35 billion KRW,” and added, “The export of hygiene brands and the launch of household goods brands will bring about medium- to long-term sales growth effects.”

This content was produced with the assistance of AI translation services.