Initiation of Coverage with a 'Buy' Investment Rating and a Target Price of 520,000 KRW
Yuanta Securities initiated coverage on APR on the 1st, issuing a 'Buy' rating with a target price of 520,000 KRW.
Seung-eun Lee, a researcher at Yuanta Securities, stated, "APR's target price was calculated by applying a price-to-earnings ratio (PER) of 30 times to the 12-month forward earnings per share (EPS)." He added, "The target PER of 30 times was based on the average of four comparable companies within the industry, including Amorepacific, Silicon2, Classys, and JCS Medical. Using the average PER of these companies for 2024, we set the appropriate price level for APR." He continued, "APR maintains the number one domestic market share in devices, and with expected global sales growth and profitability improvement, we believe there is sufficient potential for future stock price appreciation."
APR holds the top position in the domestic home beauty device market, with an estimated market share of approximately 32% as of 2023. The researcher analyzed, "This was made possible thanks to an integrated value chain encompassing clinical trials, research and development (R&D), and manufacturing production." He further explained, "APR achieves a reasonable cost structure through technology development and process optimization, and this technological capability and cost competitiveness greatly support its expansion into overseas markets."
This year, sales growth is expected through an expanded new product lineup and factory expansion. The researcher projected, "Device sales are expected to grow 76% from 216 billion KRW last year to 380 billion KRW this year." He added, "The new product 'Ultratune,' launched in May, has a higher average selling price (ASP) than existing products, and a high-intensity focused ultrasound (HIFU) device is scheduled for release in the second half of the year. Additionally, the newly established second factory in Pyeongtaek will enable an additional annual production capacity of 2.4 million units, aiming for a total production of 8 million units by next year."
The cosmetics division is also showing high growth. The researcher explained, "The Mediheal brand is demonstrating strong growth with its derma cosmetics concept, and through investments in original design manufacturing (ODM) companies, it is securing production competitiveness and stable supply."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
