[Click e-Stock] Amorepacific Achieves Flawless Turnaround... Target Price Raised

Improvement in Earnings Expected to Continue in the Third Quarter

Eugene Investment & Securities announced on August 4 that Amorepacific delivered a flawless turnaround in its second quarter performance, raising its target stock price from 150,000 won to 170,000 won.

According to Eugene Investment & Securities, Amorepacific’s second quarter sales reached 1.1759 trillion won, an increase of 17% compared to the same period last year, while operating profit surged by 59.4% to 117.4 billion won.

By segment, domestic sales amounted to 610.8 billion won and operating profit was 59.6 billion won. Analyst Lee Haeni explained, “Pure domestic operations grew by 9%, with online promotions driving the growth, and outstanding performance by brands such as Aestura and Illiyoon at multi-brand shops (MBS) continued. The channel mix shift towards growth channels improved profitability, and duty-free and cross-border sales increased by 16%.”

In North America, sales reached 210.4 billion won and operating profit was 31.6 billion won. The analyst added, “The contribution of overseas sales expanded by 4.5 percentage points year-on-year to 17.9%. Operating margin was in the mid-10% range, and even excluding the 19 billion won benefit from customs duty refunds, the profitability remained at a high single-digit level.” She continued, “Strong sales from TikTok Shop and Amazon supported growth, and Laneige ranked high during Prime Day with its lip products.” In addition, significant growth in Europe, Asia, and other regions also contributed to Amorepacific’s improved second quarter results.

Eugene Investment & Securities forecasts that Amorepacific’s third quarter sales will reach 1.1168 trillion won, with an operating profit of 113.2 billion won.

The analyst commented, “Derma and haircare brands are gaining ground globally. New country entries and new channel expansion for these brands are expected to translate into business results.” However, she noted, “In the U.S., Amazon sales may slow somewhat as Prime Day has shifted from July to June, but growth potential remains intact. In China, Sulwhasoo’s declining sales are expected to be offset by brands such as Ryo, Hera, and Aestura.”

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