Yuanta Securities Korea said on the 7th that Amorepacific Corporation is expected to continue its high growth in overseas markets. It maintained its investment opinion of "buy" and raised its target stock price from 160,000 won to 178,000 won. The closing price of Amorepacific Corporation on the previous trading day was 125,600 won.
Lee Seung-eun, a researcher at Yuanta Securities Korea, noted, "Amorepacific Corporation is maintaining continuous high growth and solid revenue in key overseas markets such as North America, EMEA (Europe, the Middle East, and Africa), and Japan," adding that "the company-wide portfolio rebalancing strategy is becoming visible."
Amorepacific Corporation announced on the 30th that it recorded sales of 1.0675 trillion won and an operating profit of 117.7 billion won in the first quarter of this year (January to March). These figures represent increases of 17.1% and 62%, respectively, compared to the same period last year.
The researcher said, "This year's first quarter sales in North America increased by 79% compared to the same period last year, reaching 157.2 billion won, growing by 30% when excluding the subsidiary COSRX," noting that "the operating profit margin also remained in double digits." He added that sales in the UK, France, and the Middle East grew uniformly.
The researcher pointed out that although sales in China decreased by 10% compared to last year in the first quarter of this year, it returned to the black for the first time in eight quarters. He projected that "the Chinese market will maintain a profit margin of 3% to 5% going forward," stating that "lightweight operations centered around Sulwhasoo and digital transformation will continue."
The researcher noted, "The second quarter (April to June) is seasonally a period when consolidated sales decrease compared to the first quarter, and an increase in expenses is expected due to incentive payments in June," adding that, "However, profitability expansion and growth will be pursued through overseas portfolio rebalancing, maintaining the profit in China, and growing large brands."
At the same time, it suggested that the second quarter guidance for sales revenue would be in the mid-10% range compared to last year, while the operating profit margin would be in the single-digit high range.