[Click e Stocks] Amorepacific, Monitoring 2Q Earnings

[Asia Economy Reporter Junho Hwang] Hyundai Motor Securities maintained the target price of Amorepacific at 275,000 KRW on the 2nd. This decision was due to the expectation that the second-quarter earnings this year would not meet market expectations. With the observation of increased marketing expenses in the Chinese market, the investment opinion was kept neutral.

Hyundai Motor Securities projected Amorepacific's second-quarter sales this year to be approximately 1.2188 trillion KRW on a consolidated basis, which is about 15.4% higher than the previous year.

Consolidated operating profit is expected to be 110.5 billion KRW, about 212.9% higher than the previous year. However, this slightly falls short of market expectations. Although marketing efforts to strengthen the brand in the Chinese market increased in response to the China 618 event, profits are expected to fall short of expectations, leading to a lowered operating profit forecast.

Hyun Hyejin, a researcher at Hyundai Motor Securities, said, "Expectations for a turnaround in performance and mid- to long-term company-wide earnings growth have already been reflected in the stock price, but with this quarter's earnings decline, the expectation for a clear improvement trend in performance is reduced, and the sentiment supporting the stock price momentum is also expected to temporarily weaken."