"Record Highs Every Quarter" US and Europe Drive Another Surge... This Company's Sales Soar 267% [Click e-Stock]

2Q Operating Profit Projected at 183.8 Billion Won

U.S. Sales Up 267%... Impact of Offline Channel Expansion

Top-Line Growth Continues Despite Logistics Cost Pressure

APR headquarters office. APR

APR is expected to deliver results exceeding market expectations for the second quarter as well. This is largely due to a rapid increase in overseas sales, particularly in the United States and Europe. Although the stock price has already risen significantly, analysts note that the pace of earnings growth remains steep.

On July 9, Hanwha Investment & Securities maintained its target price for APR at 500,000 won and its "Buy" investment rating, citing these factors. The previous day's closing price was 385,500 won.

Hanwha Investment & Securities projects APR's consolidated revenue for the second quarter to reach 751.2 billion won, with operating profit at 183.8 billion won. These figures represent increases of 129.2% and 117.4%, respectively, compared to the same period last year. Operating profit is also expected to surpass the market consensus of 167.4 billion won.

The biggest growth driver is the United States. Second-quarter sales in the U.S. are estimated at 353.4 billion won, up 267.4% year-on-year. This was attributed to strong sales on Amazon and TikTok, as well as smooth expansion into offline channels such as Target and Walmart.

Performance in new growth markets, including Europe, was also notable. Excluding Greater China, revenue from new growth markets is estimated at 245.7 billion won, up 208.3% from the previous year. The expansion of direct business operations in Europe, which began in earnest at the start of the year, is being evaluated as having delivered results above expectations.

However, the operating margin for the second quarter is expected to decrease to 24.5%, down 1.3 percentage points from the same period last year and 1.2 percentage points from the previous quarter. This is believed to be due to increased logistics costs. Geopolitical risks have led to longer ocean freight times, and the company appears to have increased air freight to respond quickly to demand.

Nevertheless, what matters more in this earnings report is topline growth rather than costs. Despite temporary freight cost pressures, sales are growing faster than anticipated. In the U.S., a transition to ocean shipping is underway, particularly for established best-selling products. As production, inventory, and logistics systems stabilize, the proportion of air freight is likely to decrease gradually.

There will be some short-term pressure in the third quarter. Because second-quarter results are so strong, growth compared to the previous quarter may appear somewhat subdued. However, during the first half of the year, expansion of U.S. online and offline channels and early penetration in Europe have been confirmed, with new SKUs and category expansions also underway.

Han Yoo-jung, an analyst at Hanwha Investment & Securities, said, "APR is expected to set a new record for operating profit every quarter," adding, "Although short-term growth rate pressure may be highlighted in the third quarter, as the expansion achievements in the first half accumulate, the absolute level of revenue is expected to rise to a new level in the seasonally strong fourth quarter."

This content was produced with the assistance of AI translation services.