[Click eStock] "Clio Expected to Miss Q3 Consensus... Target Price ↓"

Hana Securities on the 22nd downgraded the target price of Clio to 35,000 KRW, citing expectations that the third-quarter consensus will be missed. The investment rating was maintained as 'Buy.'

Researcher Park Eun-jung analyzed, "Clio's third-quarter performance is expected to show consolidated sales of 89.3 billion KRW and operating profit of 8.4 billion KRW, falling short of the consensus operating profit of 12.3 billion KRW," adding, "Overall sales underperformed expectations, and profitability declined due to increased marketing expenses."

Researcher Park noted, "Domestically, the new product effects of major brands fell short of expectations, while overseas markets, particularly Japan and the United States, were disappointing," and added, "Japan is an extension of the domestic market, and the U.S. seems affected by inventory buildup concentrated in the first half before the implementation of MoCRA (Modernization of Cosmetics Regulation Act)."

She further explained.

She continued, "Clio aims for annual sales of 400 billion KRW through expanding its brand lineup and increasing the number of countries in its global expansion, but this year will be challenging," and said, "It appears to be a scratch in the continuous growth process of a model student, with the growth momentum of major brands except Gudal currently weakening."

She added, "Currently, Gudal is showing market share expansion both domestically and internationally across the company, but the contraction of more than 70% of core brands seems to be holding the company back," and emphasized, "Clio needs to regain its original trendiness and the dynamism of its color cosmetics."