[This Week's Focus] APR, Growing Together with Shareholders in Beauty Tech

Sales Up 38%, Operating Profit Up 17.7% Year-on-Year
Share Buyback Worth KRW 30 Billion
Overcoming Profitability Concerns Through Expansion

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Beauty tech company APR achieved record-high performance last year. Sales have increased for 11 consecutive years. With full-scale overseas expansion, sales in the U.S. market have grown significantly. The trend of improving performance is expected to continue for the time being.

APR is a company that develops home beauty devices and cosmetics. It sells products through cosmetic brands such as 'MediCube' and 'AprilSkin,' as well as beauty device brands like 'MediCube Age-R.' The beauty devices are manufactured through its subsidiary APR Factory.

Home beauty devices are personal beauty devices that can be used at home, including all devices for beauty purposes such as skin care, hair styling, and body shaping. They offer the advantage of convenient management at home while saving time and cost. As the perception spreads among consumers that there are limits to managing skin with cosmetics alone, the home beauty device market is steadily growing. According to market research firm Euromonitor, the global home beauty device market size is expected to grow from approximately $4.2 billion in 2023 to about $34.8 billion by 2030, with an average annual growth rate of 35%.

Rapid Expansion... Overseas Sales Surpass 50%

The growth potential of beauty devices can also be confirmed through APR's performance. Last year, on a consolidated basis, it achieved sales of KRW 722.8 billion and operating profit of KRW 122.7 billion, representing increases of 38% and 18% respectively compared to the previous year. The fourth-quarter results last year showed significant improvement compared to the previous quarter, with sales of KRW 244.2 billion and operating profit of KRW 39.6 billion, up 40% and 46% respectively quarter-on-quarter.

An APR official said, "We have established a value chain that operates independently across the entire process from beauty device product planning to research and development (R&D), production, and logistics," adding, "We thoroughly manage quality while securing flexibility to quickly respond to market changes."

By business segment, sales in the cosmetics and beauty division surged. Fourth-quarter sales in the cosmetics and beauty segment increased by 103% year-on-year. The company is growing rapidly, especially in the U.S. market. On the U.S. online shopping platform Amazon, the 'Zero Pore Pad' ranked first in the toner & lotion category in the fourth quarter last year. Products such as the 'Collagen Night Wrapping Mask' and 'Collagen Jelly Cream' also gained popularity. The device segment continued its growth as well. As of the end of last year, cumulative sales of Age-R beauty devices exceeded 3 million units. The 'Booster Pro' model alone sold over 1 million units.

Jo Eun-ae, a researcher at LS Securities, explained, "Sales exceeded market expectations by 14%, and operating profit was in line with expectations," adding, "Overall sales increased due to rising exports."

Last year, 'K-Beauty' gained popularity overseas. APR succeeded in gaining popularity through year-end promotions such as Amazon Prime Day and Black Friday in the U.S. Fourth-quarter overseas sales of APR increased by 135% year-on-year, surpassing KRW 150 billion. On an annual basis, overseas sales exceeded KRW 400 billion. The rapid growth in the U.S. is an encouraging sign. The company is actively expanding sales channels in Europe, the Middle East, and South America. It plans to strengthen cooperation with local distributors, agents, and other retailers to establish a stable overseas sales base. Since last year, the proportion of exports in total sales has exceeded 50%.

Approaching the KRW 1 Trillion Sales Era... Continued Shareholder-Friendly Policies

Most researchers analyzing APR at domestic securities firms expect sales to exceed KRW 1 trillion next year. Researcher Baesong at Mirae Asset Securities estimated that APR will achieve sales of KRW 887 billion this year and KRW 1.065 trillion next year. Researcher Bae said, "The company shows balanced growth by region and product category," and predicted, "Sales and profits will grow more than 20% year-on-year this year as well."

Since its listing last year, APR has been steadily repurchasing its own shares to enhance shareholder value. On the 4th, the board of directors resolved to repurchase KRW 30 billion worth of treasury shares. Last year, it acquired KRW 60 billion worth of treasury shares and decided to cancel all of them on the 8th of last month.

According to the shareholder return policy disclosed last year, the company will continue share repurchases and cancellations, including cash dividends, until next year. It uses at least 25% of adjusted net income on a consolidated basis annually as the budget for shareholder return policies.

Increasing marketing expenses to sustain rapid growth and changes in U.S. tariff policies are concerns for APR. The cosmetics industry fears that the application of general tariffs by the U.S. government could reduce price competitiveness.

Han Yoo-jung, a researcher at Hanwha Investment & Securities, analyzed, "Concerns about profitability decline may increase due to new market entry and changes in cost structure," but added, "This is a process of expanding sales channels and countries to achieve even higher sales growth rates."