[Click eStock] Aekyung Industrial, Growth Engine Reorganization 'Active Buying Possible'

Sangsangin Securities announced on the 8th that it maintains a buy rating and a target price of 35,000 KRW for Aekyung Industrial. Despite reorganizing growth drivers through multifaceted structural improvements and restructuring, the current stock price remains at an undervalued level that does not fully reflect these changes, making it an opportune time for active buying.

Researcher Kim Hyemi of Sangsangin Securities explained, "Since Aekyung Industrial's listing in 2018, its stock price has shown a long-term downward trend for over five years. At that time, the consolidated operating profit reached 79.2 billion KRW, pushing the market capitalization above 2 trillion KRW. However, factors such as single brand/item risk, the decline of home shopping as the main channel, and high dependence on China combined to negatively impact performance, causing annual operating profit to fall to the 20 billion KRW range during 2020-2021." She added, "However, since last year, the company has entered a recovery phase, and annual operating profit is expected to exceed 60 billion KRW this year."

The main reason for the sharp recovery is attributed to the strategy focused on securing global and digital capabilities implemented after the current CEO took office in May 2020. Researcher Kim stated, "As a result, team organizations have been subdivided and the absolute number of personnel has increased, which is reflected in the recent performance of the relevant departments."

She also pointed out the effect of channel expansion. Researcher Kim said, "In the past, home shopping was the main distribution channel for cosmetics, but now the share of new distribution channels (H&B and online), which are driving market growth, has expanded. The broadening age range of key customers using the H&B channel is positive for future sales growth."

Furthermore, she analyzed, "Although cosmetics still have a high sales proportion directed to China, the company maintains a high market share locally while diversifying into regions such as Japan and the United States. In daily necessities, non-China sales are already increasing, centered on Russia and Central Asia."

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