Korea Investment & Securities Co. said on the 3rd that APR(278470) has become highly attractive in valuation after last month's share-price decline. It maintained a "Buy" investment opinion and a target price of 5.2 million won. APR's previous closing price was 3.2 million won.
APR's forward 12-month price-earnings ratio (PER) is 17.6 times, which is attractive compared with the average of 19.8 times for major listed brand companies.
Kim Myeong-ju, an analyst at Korea Investment & Securities Co., said, "Over the past month, APR's share price fell 17%. It held up against the index, but it was very disappointing versus the sector trend," adding, "The reasons for the decline were that expectations for second-quarter results were not high compared with other cosmetics companies, while the likelihood of lower profitability in the second half increased."
Amazon Prime Day held in the second quarter appears to have had stronger promotions than in the past, and APR was also estimated to have been affected in this environment.
Kim said, "Currently, APR is raising its profile on Amazon in multiple European countries, as it did previously in the United States, so related expense outlays in the second quarter were likely larger than in the first quarter."
This trend is expected to continue for the time being, but explosive sales growth will offset the impact, and the company's net profit is projected to show solid growth this year and in 2027.
Kim said, "Beyond the United States, APR is building recognition at the fastest pace globally, and it is currently the cheapest in valuation among Korean brand companies."
The number of APR products in the top 100 of Amazon beauty in major countries is also steadily increasing. As of the 1st, APR's Zero Pore Pad ranks No. 1 in the beauty categories on Amazon in the United States, the United Kingdom, Germany and Spain. During Amazon Prime Day, the number of products ranked in the top 100 of Amazon beauty across major countries was around 35.
Kim said, "Recently there have been no particular events, but the number of APR products ranked has increased to 47," adding, "It is true that profitability is not as good compared with Amazon's wholesale sales, but you have to build recognition on Amazon to expect an increase in wholesale sales."
Kim also expected a rebound for APR in August. Kim said, "Depending on the market's extreme volatility and other factors, APR's share price could see additional correction," adding, "However, given cosmetics exports to the United States are renewing a record high and APR's hard-to-ignore ranking trend on Amazon, APR's share price is likely to rebound in August."