Daishin Securities on the 2nd said APR is expected to be driven to record-high results by the U.S. market. It maintained a Buy rating and raised the target price by 7% to 320,000 won. APR's previous closing price was 270,000 won.
Daishin Securities projected that APR posted sales of 473.3 billion won and operating profit of 116.7 billion won in the fourth quarter of last year, in line with market expectations.
Han Song-hyeop, an analyst at Daishin Securities, said, "U.S. demand drove the earnings growth." Operating profit in the United States was forecast at 217.2 billion won, up 215% from a year earlier.
Han analyzed, "Thanks to the Black Friday and Cyber Monday seasonal boost and SKU (stock keeping unit) expansion, APR ranked No. 1 in quarterly sales in Amazon's skincare category, entering a phase where demand confirmed online is translating into broader brand awareness."
Sales to Ulta also nearly doubled in the fourth quarter from about 7 billion won in the third quarter of last year, and profitability is expected to have strengthened alongside online-led top-line growth through channel diversification.
However, in the domestic market, while volume increased as Olive Young's share expanded, Daishin said overall growth was limited due to the sell-in recognition structure.
Han projected, "Japan continues high growth thanks to strong 'Mega Sale' performance and an expansion to 3,000 offline stores, but penetration will be slower than in the United States given the vendor-centric distribution structure."
This year's sales are forecast at 2.0236 trillion won and operating profit at 492.3 billion won. Those figures are up 39% and 40%, respectively, from a year earlier.
Han said, "The key to growth is expansion in the U.S. market," adding, "From a low-penetration phase, product strength proven online is expanding into offline and business-to-business (B2B), leaving room for additional growth."
In Europe, the company is currently in the infrastructure build-out phase, so short-term contribution is expected to be limited. Han said, "From the middle of this year, starting with the United Kingdom, direct sales results are expected to become visible in major countries," adding, "The key to profitability is how much the burden of online marketing costs can be offset by expanding the mix of offline and B2B."