[Click eStock] "Explosive Growth in Chinese Cosmetics Consumption"... Amorepacific Target Price '290,000'

[Asia Economy Reporter Ji Yeon-jin] Daishin Securities announced on the 29th that it expects Amorepacific's profit estimates for this year to increase and raised the target stock price to 290,000 won.

Amorepacific is targeting its high-end brand Sulwhasoo mainly through Chinese traditional e-commerce platforms such as Tmall and JD.com, while its mid-to-low-end brands Laneige, Mamonde, and Innisfree are focusing on social platforms such as Weixin, Douyin, Bilibili, and Kuaishou. This is evaluated as a strategic resource allocation expected to sustain growth for high-end brands and transition to growth for mid-to-low-end brands.

In particular, during the Chinese Queen's Day season on the 8th, Amorepacific's flagship store on the Douyin channel recorded sales of 2.71 million yuan through a total of 34 live streaming sessions, ranking among the top 3 in cosmetics sales during the same period.

The Chinese social e-commerce market is expected to record an average annual growth rate of 32% over seven years from 2019 to 2025, with the proportion of social e-commerce in online retail sales expected to expand from 20.9% in 2019 to 47.3% in 2025.

Han Yoo-jung, a researcher at Daishin Securities, said, "Social e-commerce platforms, supported by customers in their 20s and 30s, are becoming the main sales channels for mid-to-low-end cosmetic brands with lower purchase prices," adding, "It is expected to be effective in expanding into third-tier and lower cities, which had faced physical limitations, and attention should be paid to the recovery trend in China’s performance."