Meritz Securities said on Jan. 7 that d'Alba Global's global business strategy is proceeding without a hitch and that uncertainty could ease if its fourth-quarter results meet expectations. It maintained a target price of 180,000 won and a "buy" rating. d'Alba Global closed the previous trading day at 141,700 won.
For the fourth quarter last year, d'Alba Global's sales and operating profit on a consolidation basis are estimated at 141 billion won and 24.2 billion won, up 48% and 79% from a year earlier. The domestic business is expected to show solid growth on the back of new listings at Olive Young, duty-free shops, and Costco, while a recovery in Japan and strong performance in North America also contributed.
Park Jong-dae, an analyst at Meritz Securities, said, "In Japan, based on strong results at the Qoo10 Mega Wari event in Nov. last year, sales are expected to reach 22 billion won," and "In North America, sales will reach 21 billion won thanks to Black Friday performance."
The mist serum ranked No. 24 in North America during Black Friday and made the top 10 on Amazon in Spain, Germany, and Italy. Park said, "ASEAN is expected to carry its strong third-quarter performance into the next period, while Russia will likely come in at a similar 14.6 billion won in sales as the third quarter due to channel adjustments."
If fourth-quarter results meet guidance (140 billion won in sales, 17% operating margin), earnings uncertainty could ease significantly. Park said, "The core goal for offline channels is to achieve 80 billion won in annual sales for each of the six major channels in North America and Europe," adding that d'Alba Global is building brand awareness through online marketing and expanding sales via online channels.
He added, "As it enters offline channels, d'Alba Global is leveling up its sales scale, and considering this, the current price-earnings ratio (PER) of 15 is an excessively discounted transaction versus peers."