[Click eStock] "Amorepacific Accelerates Rebalancing to Expand Non-China Markets"

Strengthening Global Sales through Expansion in US, Japan, and European Markets
Reducing Dependence on China and Improving Profitability
Increasing Shareholder Returns... Allocating 35% of Net Profit for Dividends

Amorepacific announced its 2025 management plan and global rebalancing strategy at a management strategy briefing for analysts on the 12th. Attended by CEO Kim Seunghwan, Giovanni Valentini, head of the North American branch, and Park Taeho, head of the China branch, Amorepacific stated that it aims to drive sales growth through global expansion centered beyond China and improve profitability in key markets.

According to Hana Securities, Amorepacific has set a target of 10% average annual sales growth through 2027 and expects to achieve an operating profit margin of 12%. Along with this, the company plans to accelerate rebalancing by readjusting its business focus from China to the US, Japan, Europe, and other regions.

Amorepacific plans to designate the US, Japan, and Europe as core markets and implement aggressive growth strategies in each region. In particular, the US skincare market is expected to grow at an average annual rate of 9%, but the company aims to boost this to 27% growth, targeting a 10% market share and double-digit operating profit margin. In the Japanese market, Amorepacific plans to strengthen its presence by expanding offline channels such as Matsukiyo and Loft more than sixfold compared to before. In Europe, the company intends to increase market share through collaborations with Sephora and Amazon and drive sales growth through partnerships with Boots and Space NK.

The Middle East and India are regions where demand for K-beauty is rapidly increasing. Amorepacific is building a foundation for long-term growth in these markets by cooperating with Sephora and major local distributors. Through this, the company aims to nurture five core global markets and expand the overseas sales ratio to 56% by 2026.

Sulwhasoo, Innisfree, and Ryo aim to move away from their existing China-centric structure and target a 6 percentage point improvement in profitability. Laneige expects 30% sales growth in Western and Asian markets, focusing on increasing demand for lip and skincare products in the US market. COSRX aims for double-digit sales growth and 30% profitability, continuing to expand its RX line and regional presence.

The China branch plans to improve profitability through fixed cost reduction and business model transformation. Innisfree completed the withdrawal of its one-brand shops in September, and Laneige significantly reduced department store outlets to lower fixed costs. Amorepacific plans to nurture Sulwhasoo and Ryo as core brands within China while shifting Innisfree and Laneige to profitability-focused operations.

Kim Dahye, a researcher at Hana Securities, said, "Amorepacific also announced a shareholder return plan at this briefing. The company has allocated 35% of net income as dividend resources and expects an expansion of dividend resources due to improved profitability," adding, "Through this, it plans to enhance shareholder value and support the execution of its management strategy." Hana Securities maintained a 'Buy' investment rating and a target price of 180,000 KRW for Amorepacific.