[Click eStock] "AmorePacific, Non-China Sales Growth... Target Price Up"

Hana Securities raised the target price for Amorepacific from 130,000 won to 150,000 won on the 4th.

Amorepacific's third-quarter earnings are estimated to record consolidated sales of 908.7 billion won and operating profit of 35.4 billion won. Although the operating profit increased by 88% compared to the same period last year, it is 25% lower than market expectations. The main reason was the weaker-than-expected performance in the Chinese market. It is analyzed that the sluggish local economy in China and the reduction of commission rates in the duty-free channel also had an impact.

However, Hana Securities evaluated that Amorepacific is focusing on overall brand rebranding, concentrating on domestic growth channels, and expanding non-China businesses. In particular, non-China operating profit is expected to expand from around 20 billion won in 2021 to 59.4 billion won this year. The proportion rapidly grew from 6% to 34%. It is expected that within the next two years, sales outside China, such as in North America and Japan, will surpass Chinese sales, thereby enhancing profit stability through regional diversification.

Park Eun-jung, a researcher at Hana Securities, stated, "We believe growth will be driven by non-China regions such as the U.S., Japan, and ASEAN," and added, "Additionally, the company's brand portfolio, which covers mid-range to high-end products, is expected to act as an alpha factor amid the cycle of increasing foreign visitors to Korea," explaining the background for the target price increase.

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