NH Investment & Securities said APR is expected to continue strong earnings growth as exports diversify to the United States, Japan and Europe. It maintained a Buy investment opinion and raised its target price to 350,000 won from 330,000 won. APR's previous trading day closing price was 264,000 won.
Researcher Jeong Ji-yun at NH Investment & Securities said, "Eighty percent of last year's sales came from overseas," and noted, "With entry into Amazon in Europe set to ramp up in March and expansion into U.S. offline channels scheduled in the second half, quarterly U.S. sales of 200 billion won and sales in other regions of more than 100 billion won are well within reach."
APR's consolidated sales in the fourth quarter last year were 547.6 billion won, and operating profit was 130.1 billion won, up 124% and 228%, respectively, from a year earlier. Operating profit beat market expectations by about 15%.
By business segment, the beauty segment centered on cosmetics drove earnings growth. Cosmetics sales rose 225% to 412.8 billion won, and DEVICE sales increased 19% to 122.9 billion won. Jeong said, "The DEVICE growth rate is somewhat disappointing, but Medicube cosmetics are more than offsetting it."
Notably, despite aggressive fourth-quarter marketing expenses (100.5 billion won) and U.S. e-commerce channel fees and shipping costs reaching about 100 billion won and 38 billion won, respectively, operating margin rose by 7.5 percentage points on cost savings, which was viewed positively.
By region, U.S. sales surged 270% to 255.1 billion won, sustaining high growth. Sales at U.S. offline retailer ULTA were 16 billion won (a 6% share), and TikTok Shop generated 75 billion won in sales. On Amazon, sales are expanding through SKU (product type) expansion.
Sales in Japan rose 289% to 69 billion won, and the sales share climbed to the high-10% range with expanded offline entry. Sales in Greater China increased 11% to 31.8 billion won.
Other (B2B) sales rose 192% to 118.8 billion won, surpassing 100 billion won for the first time on a quarterly basis. With demand expanding in emerging regions such as Europe and the Middle East, the analysis is that penetration into the global market is accelerating.