APR stock price surpasses 200,000 won, up over 300% this year
Already exceeds securities firms' target prices
Strong earnings and shareholder return policies support the rally
APR's stock price has surpassed 200,000 won, making it the leading stock in the cosmetics sector. Since the beginning of the year, the stock has surged by more than 300%, marking the largest increase on the KOSPI. It has also exceeded the target prices set by securities firms.
According to the Korea Exchange on August 7, APR closed at 208,500 won the previous day, up 11.32%. During the session, it climbed as high as 224,000 won, setting a new all-time high.
Its market capitalization expanded to 7.9322 trillion won, surpassing Amorepacific (7.5339 trillion won) to become the top stock in the cosmetics industry. At the beginning of the year, APR's stock price was in the 50,000 won range.
This strong performance in APR's stock price has been supported by robust earnings. According to preliminary figures announced the previous day, consolidated operating profit for the second quarter of this year reached 84.6 billion won, up 202% from the same period last year. This is the highest quarterly result on record. Revenue rose by 111% to 327.7 billion won, and net profit increased by 175.2% to 66.3 billion won. These results significantly exceeded market expectations. According to financial information provider FnGuide, the consensus (average forecast by securities firms) for APR's second-quarter results was 287.6 billion won in revenue and 59.2 billion won in operating profit. In the first half of this year alone, APR recorded 139.1 billion won in operating profit, already surpassing last year's annual operating profit of 122.7 billion won.
Park Eunjeong, a researcher at Hana Securities, commented, "Since the second half of last year, APR has achieved overwhelming growth by focusing on e-commerce in its key markets such as the United States and Japan. As the demand base for K-beauty continues to expand locally, APR is recording a distinctly higher growth rate compared to competing brands and is rapidly taking market share from global companies. The expansion of offline distribution channels is also underway, further strengthening brand touchpoints, and we believe the company has now fully entered a phase of comprehensive global expansion."
Consistent shareholder return policies are also cited as a factor behind the stock's rise. On August 4, APR announced that it would cancel all 613,400 shares of its treasury stock. This represents 1.61% of the total number of shares issued. The average acquisition price per common share was 48,911 won, amounting to a total of 30 billion won. Starting in May last year, when management expressed its commitment to responsible management by purchasing treasury stock, APR decided to acquire 60 billion won worth of treasury shares in June of the same year, and in February this year, it acquired an additional 30 billion won worth of treasury shares.
However, the continued rise in the stock price has led to growing valuation concerns. The stock price has already surpassed the target prices set by securities firms. The highest target price, set by Kiwoom Securities and Hana Securities, is 200,000 won. Han Songhyeop, a researcher at Daishin Securities, said, "There is a possibility of profit-taking after the second-quarter earnings announcement, as short-term valuation pressure has increased and earnings expectations have become excessively high." Park Hyunjin, a researcher at Shinhan Investment Corp., also pointed out, "While there are no concerns about earnings growth in the second half of the year, the sharp rise in the stock price is a burden."
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