[Click eStock] "Clio, Expected to Expand Market Share in Color Cosmetics"

Daishin Securities Report

[Asia Economy Reporter Minji Lee] Daishin Securities on the 22nd issued a buy rating and a target price of 30,000 KRW for Clio. Despite the sluggish stock performance following its designation as an investment caution stock, the analysis suggests steady external growth driven by an expanded market share in the color cosmetics sector.

Clio's consolidated sales for the second quarter are expected to reach 65.4 billion KRW, a 17% increase compared to the same period last year. Operating profit is estimated to grow by 16% to 3.7 billion KRW, slightly below the market expectation of 4 billion KRW.

The China segment is projected to continue its sluggish trend similar to the first quarter, with sales declining by 30% year-on-year due to reduced cosmetics consumption. The domestic segment is expected to see a 32% year-on-year increase in total sales, driven by a recovery in demand for color cosmetics and strong sales of the Healingbird haircare line, with H&B and online channel sales growing by 40% and 44%, respectively.

In Japan, sales of Clio brand base products such as cushions and eye categories like the Pro Eye Palette are expected to continue strong, with sales forecasted to grow by 19% year-on-year. In the United States, online sales are estimated to have increased by 61% year-on-year, supported by strong sales of Peripera brand lip products and the Gudal Vita C line.

Yujeong Han, a researcher at Daishin Securities, explained, “The weakness in the China region is expected to be limited to a level already reflected in the stock price, but sales are expected to exceed forecasts due to strong performance in most regions including Japan and the United States.”

The ratio of advertising and promotional expenses to sales is estimated at 10%, up 2 percentage points from the same period last year. Researcher Han stated, “Marketing activities have expanded mainly in domestic and overseas online channels, increasing the advertising-to-sales ratio to 10%, up 2 percentage points year-on-year,” adding, “The operating profit margin for the second quarter is expected to be 5.6%, similar to last year’s level.”

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