[Click eStock] "Hugel, North America Cosmetics Sales Up... Target Price Raised from 350,000 to 470,000"

Daol Investment & Securities raised the target price of total medical aesthetic company Hugel from 350,000 KRW to 470,000 KRW on the 7th, an increase of 34%. This is based on the analysis that sales in the Americas are rapidly increasing, far exceeding market expectations.

High-end cosmetic brand 'Bylizen BR' ampoules 3 types [Photo by Hugel]

Hugel achieved its highest quarterly performance in the third quarter of this year. On a consolidated basis, sales reached 105.1 billion KRW and operating profit was 53.4 billion KRW, up 23.9% and 54.5% respectively compared to the same period last year. Sales of the botulinum toxin product ‘Botulax’ increased by 41% to 64.7 billion KRW, accounting for more than half of total sales. Sales in the Americas and the Asia-Pacific (APAC) region grew 73% due to the popularity of Botulax and cosmetics.

Jonghyun Park, a researcher at Daol Investment & Securities, said, "Toxin sales in the Americas, centered on the United States, reached 18 billion KRW, exceeding the previous estimate of 10.3 billion KRW by 80%," adding, "Improved gross profit margin (GPM) due to increased sales volume in the Americas and cost efficiency from workforce reduction at the American subsidiary ‘Hugel America’ led to an operating profit margin (OPM) of 50.8%."

Researcher Park also stated, "Hugel’s cosmetics brand ‘Wellage’ recorded sales of 9 billion KRW in the third quarter, a 36% increase compared to the same period last year, mainly through H&B and online channels," and predicted, "Cosmetics sales next year will increase by 25% from this year to reach 44.2 billion KRW."

He added, "Hugel plans to sign a new partner contract in Brazil next year," and said, "Reflecting this, we raised the Americas sales forecast by 58% from the previous estimate to 60.4 billion KRW." He also explained, "Due to increased sales and other factors, the operating profit margin forecast for next year was raised from 44.6% to 48.2%, and applying a price-to-earnings ratio (PER) of 32 times to the expected net profit for next year, the target price was raised by 34%."