KB Securities said on the 14th that d'Alba Global(483650) is expected to see improved earnings thanks to high growth in the North American and European markets and the expansion of business-to-business (B2B) channels. It maintained a "buy" rating and raised the target price 7.4% to 290,000 won from 270,000 won. The previous session's closing price was 236,000 won.
d'Alba Global's consolidated revenue in the second quarter of this year rose 45.6% on-year to 186.9 billion won, while operating profit increased 61.6% to 47.2 billion won.
The operating profit margin (OPM) was 25.3%, up 2.5 percentage points from a year earlier. Both revenue and operating profit beat the securities market consensus by 2.0% and 14.5%, respectively, marking an "earnings surprise."
By region, sales in North America and Europe surged 175% and 240% on-year, respectively, driving earnings growth. In addition to higher online sales from the Amazon Prime Day event, the impact reflected reorder volumes in offline channels such as Costco and Ulta in North America.
In contrast, sales in Japan, which had been a key market, fell 2.2% from the previous quarter due to a slowdown in the Qoo10 channel. Sales in Russia and Korea also declined 34.3% and 4.0%, respectively, due to inventory shortages caused by disruptions in container supply.
Son Min-young of KB Securities said, "After the earnings release, the stock fell about 10% on concerns over slowing growth in existing core regions and a conservative third-quarter guidance (revenue 170 billion won, OPM 17%)." Son added, "With the B2B sales mix expanding to 39% in the second quarter, earnings volatility is being reduced, and we should note that new regions such as greater China, India and Australia are growing rapidly."
Son added, "The positive earnings trend should continue, supported by marketing leverage from B2B expansion and the addition of new growth regions."