[Click eStock] "AmorePacific, Non-China Sales Growth... Target Price Up"

Hana Securities raised the target price for Amorepacific from 130,000 won to 150,000 won on the 4th.

Amorepacific's third-quarter earnings are estimated to record consolidated sales of 908.7 billion won and operating profit of 35.4 billion won. Although the operating profit increased by 88% compared to the same period last year, it is 25% lower than market expectations. The main reason was the weaker-than-expected performance in the Chinese market. It is analyzed that the sluggish local economy in China and the reduction of commission rates in the duty-free channel also had an impact.

However, Hana Securities evaluated that Amorepacific is focusing on overall brand rebranding, concentrating on domestic growth channels, and expanding non-China businesses. In particular, non-China operating profit is expected to expand from around 20 billion won in 2021 to 59.4 billion won this year. The proportion rapidly grew from 6% to 34%. It is expected that within the next two years, sales outside China, such as in North America and Japan, will surpass Chinese sales, thereby enhancing profit stability through regional diversification.

Park Eun-jung, a researcher at Hana Securities, stated, "We believe growth will be driven by non-China regions such as the U.S., Japan, and ASEAN," and added, "Additionally, the company's brand portfolio, which covers mid-range to high-end products, is expected to act as an alpha factor amid the cycle of increasing foreign visitors to Korea," explaining the background for the target price increase.