[Click eStock] "Clio, Leading Stock in Indie Beauty Boom... Target Price Maintained"

Shinhan Investment Corp. maintained a buy rating and a target price of 42,000 KRW on Clio on the 13th, calling it a "representative stock of the indie beauty (new and independent beauty brands) boom." The closing price on the 10th was 34,850 KRW.

Securities company app, stock trading scene. Photo by Hyunmin Kim kimhyun81@

On the day, Hyunjin Park, a researcher at Shinhan Investment Corp., stated, "The consolidated sales for the first quarter of this year were 93 billion KRW, and operating profit was 8.5 billion KRW, up 24% and 63% respectively compared to the same period last year, meeting estimates. However, marketing expenses were higher than expected, causing operating profit to slightly miss estimates."

Domestic and overseas sales grew by 22% and 27%, respectively. Domestically, growth in the H&B (Health & Beauty) channel and online sales was as expected, but home shopping sales reached 8.6 billion KRW, a 115% increase compared to the same period last year. This was due to the number of broadcasts more than doubling year-on-year. Researcher Park said, "With the launch of Clio Dual Tone-Up Sun Cream and Rouge Heel Jewelry Edition, home shopping sales are expected to continue in the second quarter," adding, "Home shopping operating margins are expected to maintain a trend of turning profitable."

Overseas sales showed strength with growth in North America, Southeast Asia, China, and Japan. Researcher Park said, "Expansion of the Dermatory channel in North America is expected in the second half of the year. Expansion of Peripera's channel presence is also anticipated," adding, "While growth of other indie beauty brands in China has been sluggish, Clio's performance recovery has been highlighted. The popularity of Clio's eye palette products continues, and with the launch of Dermatory on Tmall, this growth is not expected to be one-off."

Marketing expenses for the second quarter are expected to be around 14% of sales and are likely to decrease compared to the first quarter. Researcher Park said, "As we move into the third quarter, sales performance relative to expenses is expected to improve," adding, "The current valuation (stock price relative to corporate value) is at a level comparable to similar companies."