[Click eStock] "APR, Overseas Growth Amid Stock Price Bottoming Phase"

Shinhan Investment Corp. analyzed on the 11th that APR is in a phase of bottoming out its stock price amid overseas growth.

Park Hyunjin, a researcher at Shinhan Investment Corp., stated in the report, "APR continues to expand its scale based on the steep sales growth in the beauty device and cosmetics sectors," adding, "In particular, cosmetics sales have shown strong performance for two consecutive quarters, driving growth."

Researcher Park said, "With an expected increase in B2B transactions around the year-end and New Year, margin contributions are likely to rise, and from the first half of this year, the margin level will break away from the downward trend, allowing the stock price to bottom out," evaluating that "this is currently a period suitable for buying at the low point."

APR's consolidated sales for Q4 last year were 244.2 billion KRW, and operating profit was 39.6 billion KRW, representing increases of 61% and 15% respectively compared to the same period last year. Sales exceeded market consensus and Shinhan Investment Corp.'s estimates by 15%, while operating profit met consensus but was 10% below estimates. By business segment, device sales increased by 47% to 103.4 billion KRW, cosmetics sales grew 103% to 116.3 billion KRW, and other sales slightly decreased to 24.5 billion KRW.

Notably, overseas sales recorded 156.2 billion KRW, growing 135% due to increased exports of the Mediheal brand. Accordingly, the proportion of overseas sales expanded from 46% in 2023 to 64% in 2024. Sales by country showed high growth: the U.S. at 69.0 billion KRW (131% increase), Japan at 17.7 billion KRW (125% increase), and Hong Kong at 20.7 billion KRW (143% increase). Additionally, B2B transaction sales surged 15-fold year-over-year to 30 billion KRW. Researcher Park analyzed, "Sales showed strong growth in most countries except China."

However, the operating profit margin was somewhat sluggish compared to sales growth. This was largely due to increased direct operating costs such as transportation and sales commissions, and ongoing issues with inventory provisions in the fashion sector. Researcher Park stated, "The increase in B2B sales has strengthened since November, and the margin improvement effect from the improved distribution channel mix will fully materialize from 2025," forecasting, "Considering the growth trend in cosmetics sales, the company's 2025 sales guidance of 1 trillion KRW and operating profit margin of 17-18% appear achievable."

From a valuation perspective, sales estimates were revised upward, but profit estimates were maintained. Researcher Park said, "Reflecting the sector valuation decline, the target multiple was adjusted from 25x to 20x," evaluating that "the de-rating has stopped and the stock is in a phase of bottoming out."

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