[Click eStock] "APR, a Leading Overseas Growth Stock in Cosmetics... Target Price Up"

Target Price Raised by 29% Compared to Previous Estimate

Hanwha Investment & Securities on the 26th raised the target price for APR, recognizing it as a leading overseas growth stock in the cosmetics sector, from 70,000 KRW to 90,000 KRW. The investment rating was maintained at 'Buy.'

Han Yoo-jung, a researcher at Hanwha Investment & Securities, explained, "We raised the target price by 29% compared to the previous estimate due to upward revisions in profit forecasts," adding, "The possibility of achieving the aggressive 2025 sales guidance of 1 trillion KRW is increasing."

Hanwha Investment & Securities estimated APR's first-quarter results this year at 233.4 billion KRW in sales, a 56.7% increase year-on-year, and operating profit of 41.9 billion KRW, up 50.9%. The researcher analyzed, "This will exceed the consensus operating profit of 35.5 billion KRW (average securities firm forecast). High growth centered on cosmetics is driving top-line growth, and profitability is expected to improve due to an increase in the B2B (business-to-business) sales ratio and a reduction in promotion scale compared to the previous quarter due to seasonal factors."

It is evaluated as having established itself as a leading overseas growth stock within the cosmetics sector. The researcher said, "The overseas sales ratio is estimated to reach 67% this year," adding, "The countries expected to show the highest growth are the United States and Japan. In the U.S., sales accounting for 44% of total sales in 2024 were concentrated in the fourth quarter, but ignoring seasonal factors, strong sales continue into the first quarter of 2025." Furthermore, "In Japan, a full-scale expansion of offline distribution channels has been underway since January this year, with about 500 stores expected to be opened by the end of the first quarter, aiming for 3,000 stores within the year." Along with this, high growth is expected to continue throughout the year due to expansion into new countries and product launches. The researcher added, "The incremental sales from other countries such as Singapore and Malaysia combined are expected to be comparable to those of the U.S."

Strong device sales are analyzed to provide additional growth potential. The researcher explained, "The estimated sales ratio for 2025 currently stands at 40.5% for devices, down 2.8 percentage points year-on-year, and 54.3% for cosmetics, up 7.5 percentage points, forecasting overwhelming growth in cosmetics," adding, "However, considering that the home beauty device market is still in its early stages, that device products are rapidly expanding in major overseas markets, and that the integrated business structure of devices and cosmetics allows customers who first experience cosmetics to expand into device purchases, strong device sales remain an additional growth potential."