[Click eStock] "APR Achieves High Growth in Both U.S. and Europe... Target Price Maintained"

Full-Scale Expansion into U.S. Offline and European Markets
"Limited Impact from Stronger Korean Won"

According to analysts in the securities industry, APR is expected to maintain its high growth in the second half of the year by ramping up its entry into U.S. offline distribution channels and the European market.

On September 8, SK Securities reported that researcher Hyeong Gwon-hoon stated, “Up until last year, sales grew mainly through the U.S. Amazon and cross-border channels, but from this year, sales have been expanding, focusing on U.S. offline channels and the European region.” He maintained a 'Buy' investment rating and a target price of 560,000 won. The previous day's closing price was 384,000 won.

The current size of the U.S. offline beauty market is approximately 1.5 times larger than the online market, while the European market is about 1.37 times the size of the U.S. market. Researcher Hyeong emphasized, “This year marks the first year that APR has made a full-scale entry into both markets,” adding, “The potential for sales growth with increased channel penetration is tremendous.”

The growth rate of North American sales for the second half is expected to reach 113% year-on-year. Third-quarter revenue will likely be driven by reorder sales from newly listed offline channels in the first half, as well as Amazon sales. Hyeong noted, “Despite the lack of promotions, high rankings and traffic have been maintained on Amazon after Prime Day, and as of the end of August, Mediqube’s Amazon BSR (Best Sellers Rank) score for the third quarter improved by about 15% compared to the second quarter.”

Sales in the European region for the second half are expected to grow by 475% year-on-year. As of the end of August, Mediqube’s Amazon BSR score in five major Western European countries improved by 39% compared to the average for the second quarter, and B2C (business-to-consumer) online sales are projected to increase significantly.

It is also expected that the pace of listing in offline channels will accelerate next year. Hyeong explained, “So far, meaningful listings have been achieved only in Sephora across Europe and Boots in the UK, but next year both the number of countries and channels will expand,” adding, “While the European beauty market is 1.37 times the size of North America, currently, APR's North America to Europe revenue split is about 72 to 28. Next year, the European market will drive earnings growth.”

Regarding concerns over profitability due to the recent appreciation of the Korean won, the impact is expected to be minimal. Hyeong commented, “Assuming an average exchange rate of 1,420 won for the third quarter, the resulting decline in operating profit margin would be less than 1 percentage point,” adding, “Thanks to a high gross profit margin, the impact of exchange rate fluctuations is minimized.”

Hyeong further stated, “Rather than short-term earnings, attention should be given to the long-term growth potential arising from penetration into U.S. offline channels and the European market.”

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