[Click eStock] "AmorePacific, Growth Led by the US and Europe"

Shinhan Investment Corp. evaluated on the 25th that Amorepacific is experiencing very strong sales growth in the US, Europe, and the Middle East, while the loss in China is decreasing as expected.

Researcher Park Hyunjin of Shinhan Investment Corp. analyzed, "Amorepacific's consolidated sales for the first quarter of this year are expected to be 1.09 trillion KRW, and operating profit 108.4 billion KRW, representing increases of 20% and 49% respectively compared to the same period last year, slightly exceeding the current consensus."

He added, "Domestic sales are expected to be similar to the same period last year, but overseas sales are expected to grow by 54%, driving performance growth," and "especially, sales in Europe and North America are expected to increase by 200% and 115%, respectively."

Regarding the North American market, it was analyzed that the Laneige brand's strong performance continues, and based on its high recognition, it is increasing its contribution to sales and profits. Laneige accounts for more than 60% of North American sales, 70% of sales in Europe, and with Europe's operating profit margin exceeding 20%, it is rapidly increasing profit contribution.

Researcher Park explained, "In Korea, growth is centered on e-commerce and H&B, and Chinese sales are expected to have decreased by 20%."

He continued, "The company has set a target for the operating loss in China to be within 10 billion KRW, including a one-time cost of 5 billion KRW," and "from the second quarter of this year, Chinese sales are expected to turn to growth, and at the current pace, reaching the breakeven point in the second half of the year is likely."

Researcher Park added, "We maintain the annual estimates, and there have been no identified one-time cost issues that could arise from the core business. Losses related to subsidiaries are either nonexistent or limited."

The buy rating and target price of 163,000 KRW were maintained.