[Click eStock] "Clio Lowers Next Year's Earnings Outlook... Target Price Down"

Hana Securities on the 11th stated that Clio is experiencing growing pains and downgraded its earnings estimates for next year. However, it maintained a 'Buy' investment rating while lowering the target stock price to 30,000 KRW.

Park Eun-jung, a researcher at Hana Securities, said, "The consolidated sales for the third quarter increased by 3% year-on-year to 87.6 billion KRW, but operating profit sharply declined by 39% to 6.4 billion KRW, significantly missing the consensus estimate of 11.6 billion KRW."

Researcher Park explained, "The aging of domestic color cosmetics brands and intensified competition led to a decline in market share in key channels, and exports to the U.S. were disappointing overseas." She also analyzed, "The operating profit margin for the third quarter fell significantly from 12.3% last year to 7.3% this year, due to expanded marketing expenses related to new product launches (YoY +4 billion KRW)."

Hana Securities views Clio as going through growing pains while expanding its growth drivers from color cosmetics to basic products and from the Japanese and Chinese markets to the U.S., Southeast Asia, and other regions.

Researcher Park diagnosed, "The rise of various emerging brands in the mid-to-low price color cosmetics and basic product segments poses additional challenges," and projected, "Clio's consolidated sales for 2025 are expected to increase by 12% year-on-year to 410 billion KRW, with operating profit rising 19% to 40.1 billion KRW."