DS Investment Securities predicted that Global Tax Free, a tax refund corporation, will show an upward trend in performance thanks to the K-beauty craze. It raised the target stock price from the previous 6,000 won to 6,500 won and suggested an investment opinion of 'buy.' The closing price of Global Tax Free on the most recent trading day, the 28th of last month, was 4,370 won.
On the 4th, Kim Soo-hyun, a researcher at DS Investment Securities, noted, "We raised the target stock price after adjusting the sales and operating profit estimates for Global Tax Free this year," adding, "With the increase in spending by foreign tourists on skincare and beauty procedures and the continued growth rate of Olive Young's foreign sales, there is a significantly high likelihood that this year's sales and operating profit will surpass our estimates."
Founded in 2005, Global Tax Free is the first corporation in South Korea to start tax refunds for foreigners. The company explains that it has the most post-tax exemption franchise stores including major department stores and luxury brands in the country.
Last year, the consolidated sales amounted to 129.7 billion won, and the operating profit was 21.8 billion won. It is estimated that the separate sales of the tax refund business sector surpassed 100 billion won, showing a growth of 50% compared to the previous year. The annual net profit in this sector was 5.4 billion won, marking the first return to profitability after the coronavirus.
Researcher Kim projected, "The Japanese corporation turned its operating profit to black for the first time since its establishment, which raises expectations for institutional improvements in Japan next year." Despite a temporary decline in inbound foreign traffic during the off-season in the fourth quarter and the December martial law, the increase in foreign spending in the skincare and beauty market is interpreted as a driving force for performance improvement.
In December of last year, domestic dermatology consumption was 70.3 billion won, showing a growth of 169% compared to the previous year. Consumption in plastic surgery recorded an increase of 53%, reaching 34.9 billion won. The share of Olive Young in Global Tax Free's total refund sales is 20-25%, while the share from dermatology and plastic surgery is 17-20%.
Researcher Kim added, "Olive Young's foreign sales grew by 140% last year, and an increase of over 100% is expected this year," noting, "Foreign spending in dermatology grew by 375% last year and could also increase by over 100% this year."