[Click eStock] "AmorePacific, Performance Recovering... Q1 Consensus Met"

Hyundai Motor Securities maintained a 'Buy' rating and a target price of 150,000 KRW for Amorepacific on the 28th, anticipating a recovery in its first-quarter earnings this year.

Heeji Ha, a researcher at Hyundai Motor Securities, explained, "Amorepacific's consolidated sales for the first quarter of this year are expected to reach 1.0457 trillion KRW, a 14.7% increase compared to the same period last year, and operating profit is projected to rise 31.2% to 95.3 billion KRW (operating margin of 9.1%). This performance is expected to meet market consensus."

In the domestic market, growth in traditional distribution channels is slowing, and the duty-free channel remains sluggish. Researcher Ha said, "Domestic sales are expected to decrease by 0.5% year-on-year to 560.6 billion KRW, and operating profit is projected to decline by 8.4% to 45 billion KRW. In particular, duty-free channel sales are expected to drop by 22%." However, online and multi-brand shop (MBS) channels are showing steady growth, which is expected to support overall performance.

In the global business, differentiated trends appeared by region. In China, channel and profit structure restructuring continues, with sales expected to decline by 21% in the first quarter. Researcher Ha noted, "Although sales have continued to decrease due to the reduction of Laneige stores, the deficit is gradually shrinking. Most of the losses are expected to be reduced in the first half of the year, with performance improvements anticipated from the second half."

Growth was prominent in Western markets. Researcher Ha said, "In North America, first-quarter sales are expected to grow more than 20% year-on-year due to the launch of new Laneige products and increased sales of Innisfree. In Europe, sales growth of over 40% is expected, centered on Laneige and Innisfree." In particular, the entry of Estra products into 300 Sephora stores from February is analyzed to have a positive impact on expanding the European market.

Subsidiary COSRX is expected to record first-quarter sales of 120.4 billion KRW, down 23% due to inventory adjustments in North American retail. However, Researcher Ha predicted, "Once price and distribution channel adjustments are completed, growth is expected to resume."

Researcher Ha added, "Amorepacific is expected to turn around following the restructuring in China, and is maintaining steady growth centered on Laneige and Innisfree in the North American and European markets. If COSRX's recovery becomes visible, there is potential for additional stock price upside momentum."

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