APR, Promising Outlook for Fall and Winter [Click-e Stock]

Blockbuster Performance in the U.S. Market
Profit Leverage Effect Stands Out
Triple-Digit Growth in Both Sales and Operating Profit

APR is expected to deliver solid results in both the third and fourth quarters of this year. Analysts believe that the company can continue to grow despite the burden of U.S. tariffs, as the profit leverage effect from increased sales becomes more pronounced.

On September 25, Shinhan Investment & Securities raised its target price for APR by 12% to 280,000 won, while maintaining its 'Buy' recommendation, citing these factors. The previous day's closing price was 217,500 won.

APR's sales are growing by triple digits in the United States, Japan, and other countries, primarily driven by its cosmetics brand, Medicube. Multiple products are forming product lines, resulting in higher rankings across distribution channels. Medicube alone accounted for six items in the top 100 of Amazon's beauty category. The results from this year's Amazon Prime Day event were found to be similar to those from last year's Black Friday, further raising expectations for improved performance.

For the third quarter of this year, consolidated sales are projected to reach 379.7 billion won, with operating profit at 90 billion won, representing year-on-year increases of 118.1% and 230.3%, respectively. By segment, beauty device sales are expected to reach 96.7 billion won (up 30.1%), while cosmetics sales are projected at 272.5 billion won (up 220.0%).

The trend of the United States driving overall sales growth remains similar to the previous quarter. Recently, products such as the pore pad and collagen gel cream have gained popularity, causing APR's overall beauty sales ranking on Amazon in the U.S. to surge. A significant portion of sales generated in the United States, which accounts for about 29% of total revenue, comes through Amazon.

Sales through distributors such as SiliconTwo are also expected to rise from a quarterly average of 70 billion won in the first half to around 80 billion won per quarter in the second half. The improvement in operating margin due to changes in the distribution channel mix is expected to continue into the fourth quarter. The impact on profit and loss from U.S.-bound tariff burdens (assuming an average tariff rate of 15%) is estimated to be around 1 percentage point.

Park Hyunjin, a researcher at Shinhan Investment & Securities, explained, "The profit leverage effect from increased sales is driving retained earnings to double. Although the growth is very rapid, the company is achieving a virtuous cycle of stable cash flow, which fully justifies a valuation premium."

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