[Weekly HOT Stocks] Amorepacific, Foreign Investors 'Focus'... Stock Price on the Rise↑

Foreign Investors Net Buy 51.3 Billion KRW Worth of Amorepacific Shares from 11th to 15th

[Asia Economy Reporter Kum Bo-ryeong] Foreign investors showed interest in Amorepacific over the course of a week, leading to a rise in its stock price.

According to the Korea Exchange on the 17th, foreign investors net purchased Amorepacific shares worth 51.3 billion KRW over five trading days from the 11th to the 15th. During this period, Amorepacific ranked 9th among the top net purchase stocks by foreign investors across both the KOSPI and KOSDAQ markets.

The stock price was on an upward trend. The closing price, which was 203,500 KRW on the 8th, slightly dropped to 190,600 KRW on the 11th but then rose consecutively for four trading days: 203,000 KRW on the 12th, 211,500 KRW on the 13th, 213,500 KRW on the 14th, and 220,500 KRW on the 15th.

Analysis suggests that expectations rather than actual performance are driving the stock price. Cape Investment & Securities estimated Amorepacific’s Q4 results last year at 1.128 trillion KRW in sales and an operating loss of 15.1 billion KRW. Compared to the previous year, sales decreased by 15.4%, and operating profit turned into a loss.

Kim Hye-mi, a researcher at Cape Investment & Securities, explained, "The domestic cosmetics operating loss is expected to be 4 billion KRW, influenced by a large-scale restructuring aimed at reorganizing the sales structure to focus on online channels. Amid generally sluggish offline domestic consumption, sales are expected to decline due to the reduction of Aritaum direct stores and franchises, as well as a decrease in duty-free customers. Additionally, a temporary increase in salaries is anticipated due to the company’s first-ever voluntary retirement program since its founding."

However, Kim expects the company to break away from the four-year consecutive decline in profits and shift to growth this year. She said, "Since the THAAD (Terminal High Altitude Area Defense) issue in 2017, Amorepacific’s performance had declined for four consecutive years, but due to the base effect and business restructuring focused on online channels, growth is expected this year. Sales and operating profit are estimated to increase by 12.8% and 184.2%, respectively, compared to the previous year."