DB Securities said on the 15th that for d'Alba Global, a gradual uptrend in sales in Western markets is expected this year as contracts expand across European offline channels. It maintained its Buy recommendation and raised the target price to 220,000 won from 180,000 won. d'Alba Global closed the previous trading day at 184,000 won.
Heo Jena, an analyst at DB Securities, said, "It is positive that rankings for products such as tone-up cream and multi balm have been steadily rising on Amazon channels in many European countries recently," and added, "In Japan, products are also ranking near the top on online platforms, and offline the number of SKUs (stock keeping units), which had been only 10, is set to expand to 15 or more."
For the first quarter this year, d'Alba Global's sales on a consolidation basis are projected at 157.4 billion won, with operating profit at 37.8 billion won. Year over year, sales would rise 38.4% and operating profit 25.7%. Operating profit is seen in line with the market consensus of 38.7 billion won.
Heo said, "Excluding Japan and ASEAN, sales across most countries are expected to decline slightly from the fourth quarter," adding, "That is because the effects of global marketing events, including Amazon Prime Day conducted in the fourth quarter last year, are fading, and marketing expense to raise brand awareness is being expanded."
It was noted as a disappointment that, in the Russian market where d'Alba Global is focusing, the widening range of sales volatility is not clearly evident, and that there has not been an aggressive enough increase in market share in Western markets to offset this. Still, the continued sharp sales growth of more than 35% was assessed positively.
Heo added, "Reflecting its undervaluation appeal, the share price has risen quickly in the short term," and said, "We recommend buying on pullbacks."