"Cosmetics Sales Surge 178%... Will APR Stock Rise Further? [Click e-Stock]"

Meritz Securities Raises APR Target Price from 450,000 Won to 500,000 Won

On April 22, Meritz Securities raised its target price for APR from 4.5 million won to 5 million won, maintaining a 'buy' investment rating, citing strong performance in the United States and Europe in the first quarter.

Meritz Securities projected APR's first-quarter revenue and operating profit at 592.3 billion won and 143.9 billion won, up 123% and 164% year-on-year, respectively. In particular, revenue from the cosmetics segment is expected to reach 412.8 billion won, a 178% increase compared to the same period last year.

By country, sales are projected at 72.9 billion won in Korea, 255.2 billion won in the United States, 58.6 billion won in Japan, 32.7 billion won in Greater China, and 172.9 billion won in other regions. Jongdae Park, a researcher at Meritz Securities, commented, "First-quarter revenue in the United States is similar to that of the fourth quarter last year, which was a peak season with large-scale events, so these are very strong results."

In the United States, this year’s results are expected to be even more positive, given the anticipated benefits from expanding offline channels. With APR’s exclusive distribution contract with Ulta Beauty, a major U.S. beauty shopping channel, ending earlier this month, the company is expected to see the benefits of being listed at major retailers such as Walmart, Target, and Costco from the second quarter onward.

The outlook for APR’s first-quarter performance in Europe is also positive. Researcher Park stated, "The surprise in first-quarter results is likely to come from Europe, with sales in the UK alone expected to reach 30 billion won." He added, "Although the higher proportion of air freight is a cost burden, the operating leverage from increased sales and a lower marketing cost ratio compared to the previous quarter are expected to result in a slight increase in the operating margin compared to the fourth quarter of last year."

This year, APR has completed preparations for online sales in France, Italy, Spain, and Germany, and is currently supplying products through logistics centers in the UK and the Netherlands. In Japan, the impact of being listed at 3,000 online stores continues to grow. Additionally, as sales in Asia, the Middle East, Oceania, and Latin America reached approximately 35 billion won in the first quarter, APR’s business reach is expanding.

Researcher Park commented, "APR’s overwhelming global marketing capabilities are driving the full-scale expansion of its regional and offline channels this year." He added, "In particular, the company’s flexible strategy for expanding categories, regions, and channels, which maximizes the strengths of the Korean cosmetics ODM infrastructure and global distribution capabilities, is a factor contributing to a valuation premium."

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