[Click eStock] "d'Alba Global, Growth Expectations Outweigh Disappointing Earnings"

On October 16, Korea Investment & Securities lowered its target price for d'Alba Global from 285,000 won to 240,000 won, citing that, due to recent sector rotation, investment sentiment in the cosmetics sector is unlikely to recover in the short term. The company maintained its "Buy" investment rating.

d'Alba Global's consolidated sales for the third quarter are projected at 122.1 billion won, up 65.7% year-on-year, and operating profit at 23.6 billion won, up 67.8%. However, operating profit is expected to fall short of market expectations by 17%.

Kim Myungjoo, an analyst at Korea Investment & Securities, stated, "While profitability remains solid in Korea and Japan, sales trends in these markets have been somewhat disappointing. With the company pursuing aggressive marketing, profitability in the third quarter is also expected to be lackluster." She added, "As seen in export data to Japan for August and September, d'Alba Global's third-quarter sales in Japan (23.2 billion won) were weaker than in the second quarter, and domestic sales (40.4 billion won) are also expected to be soft due to the off-season."

As poor performance and waning market interest in the cosmetics sector persist, d'Alba Global's stock price has shown a sluggish recovery. Kim noted, "It is unfortunate that investment sentiment in the sector has not recovered, but expectations for the company's growth remain valid. Notably, performance on Amazon in the United States, which had previously been disappointing, has improved significantly since July compared to the first half of the year, which is highly positive."

According to a previous disclosure, d'Alba Global signed a supply contract with Costco in the United States last month (initial order amounting to 2.9 billion won), as well as a supply contract with Ulta Beauty in the United States (initial order amounting to 1.9 billion won).

Kim emphasized, "Given d'Alba Global's enhanced valuation appeal (12-month forward PER of 13.4 times) and its global expansion story following the stock price adjustment, now is the time to consider the right timing to bottom-fish, while closely monitoring market liquidity conditions."

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