[Click eStock] "AmorePacific Likely to Fall Short of COSRX Expectations... Target Price Down"

Hana Securities on the 4th forecasted that the performance of COSRX would somewhat fall short of expectations for Amorepacific. The investment opinion 'Buy' was maintained, but the target price was lowered from 190,000 KRW to 180,000 KRW.

Hana Securities projected that Amorepacific's Q3 consolidated sales would increase by 8% year-on-year to 960 billion KRW, and operating profit for the same period would rise by 133% to 40.1 billion KRW. Eunjeong Park, a researcher at Hana Securities, stated, "Despite an expansion of losses in China, the domestic market remains relatively solid," adding, "However, COSRX's e-commerce sales in North America and ASEAN are understood to be weak, so performance is expected to somewhat fall short of expectations."

Researcher Park said, "In the domestic cosmetics duty-free sector, tourist demand is gradually increasing, but large-scale customs clearance volumes are expected to continue declining due to weak local demand," and added, "Sales outside of duty-free are expected to improve profitability due to a low base last year, mix improvement, and reduced marketing expenses." She further explained, "Among overseas sales, China is expected to see an expansion of operating losses due to sales underperformance that fails to break even, influenced by changes in transaction structure and local consumption contraction."

Attention is expected to focus on whether losses in China will shrink and on the performance trend of COSRX in 2025. Researcher Park analyzed, "The business structure changes aimed at reducing losses in China are positive, but the slowdown in e-commerce growth in COSRX's key regions such as North America and ASEAN is a short-term concern," adding, "Rapid offline penetration and expansion into other regions are necessary."