ABC (AI, Bio, Cosmetics) Leaders See Stock Prices Rise
Despite Trump's Reciprocal Tariff Letter
Individual Momentum from Policy Benefits and Overseas Performance
The 'ABC' (AI, Bio, Cosmetics) theme, which has drawn attention as a tariff-free zone, is once again capturing the market's interest. This comes as the representative stocks of the ABC theme surged in value on the same day that U.S. President Donald Trump sent a tariff letter.
According to financial information provider FnGuide on July 8, the day before President Trump sent letters specifying reciprocal tariff rates to 14 countries including South Korea, the securities industry saw over 50 reports raising target prices. Approximately 30% of these reports focused on ABC theme stocks. Within the AI theme, target prices for Naver and Kakao were raised; in the bio sector, Hanmi Pharmaceutical and Alteogen saw upgrades; and in the cosmetics sector, APR and Cosmax were among those with increased target prices.
The ABC theme has been in the spotlight as a beneficiary sector capable of enjoying windfall gains from tariffs since reciprocal tariff risks from the U.S. emerged in April. This is because, due to the nature of their products, it is structurally difficult to impose tariffs, or they possess sufficient price competitiveness to be resilient to tariffs. In particular, APR, which stands at the center of the K-beauty industry boom, has seen its stock price soar by more than 209% so far this year.
In addition to the industry-specific characteristic of limited tariff impact, these companies also possess individual momentum, such as expectations for policy benefits and improved overseas performance. Kakao, which has emerged as a leading AI stock alongside Naver, is expected to see growth in its advertising, commerce, and payment businesses in line with the Lee Jaemyung administration's policies to foster the AI industry. Lee Sunhwa, a researcher at KB Securities, stated, "If a won-based stablecoin is introduced, Kakao is expected to secure the entire value chain from issuance to platform, payment, custody, and distribution, together with its affiliates Kakao Pay, Kakao Securities, and Kakao Bank," raising the target price from 55,000 won to 80,000 won.
Hanmi Pharmaceutical, one of the leading bio stocks, is attracting significant market attention as it prepares to commercialize 'Efeglenatide,' Korea's first new obesity drug. This drug, which is on track for launch in the second half of next year, is expected to complete Phase 3 clinical trials by September. Kim Hyemin, a researcher at KB Securities, commented, "Although the earnings recovery is taking longer than expected, given the steady progress in R&D, the current stock price level is attractive from a mid- to long-term perspective," raising the target price from 330,000 won to 360,000 won.
APR, which is moving beyond simply cosmetics to become a leading K-beauty stock, is expected to post record-breaking results in the second quarter, with consolidated sales of 300 billion won (+93% year-on-year) and operating profit of 65.7 billion won (+135%). In particular, U.S. sales grew more than threefold to 84.2 billion won, maintaining its title as the top-selling Korean brand in the U.S. market. It is noteworthy that this milestone was achieved despite the absence of special shopping events and the persistent tariff risks in the local market.
Park Eunjeong, a researcher at Hana Securities, stated, "As the demand base for K-beauty continues to expand, APR is recording a clear growth rate compared to competing brands and is rapidly eroding the market share of global companies," raising the target price for APR from 150,000 won to 200,000 won.
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