[Click eStock] "APR Expected to Exceed Q3 Operating Profit Estimates on Strong US Performance"

On September 23, Korea Investment & Securities maintained its "Buy" rating on APR and raised its target price by 10% to 275,000 won, citing robust performance in the US market that is expected to drive third-quarter operating profit 5.6% above market expectations.

According to the report, APR's consolidated sales for the third quarter are projected to reach 371.2 billion won, up 113.2% year-on-year, while operating profit is expected to surge 224.6% to 88.4 billion won. The operating margin is forecast at 23.8%.

In particular, APR achieved results that exceeded market expectations during the July Amazon Prime Day promotion in the US, with sales in the US expected to reach 136.1 billion won, a 42% increase from the previous quarter. In contrast, the Japanese market is likely to see only a slight increase compared to the second quarter, as the expansion of offline sales has been slower than anticipated.

Although concerns about slowing demand have emerged in the US market due to intense competition since the second half of last year, APR has continued to deliver solid results. Korea Investment & Securities analysts Kim Myungjoo and Jeon Yoona noted, "It is encouraging that Ulta Beauty, a US beauty retailer, recently raised its annual guidance and that the intensity of promotions has improved compared to last year. This is favorable for APR, which has a high proportion of US sales at around 30%."

They added, "While the cosmetics sector showed disappointing results in the second quarter and APR's stock price has taken a breather despite its strong performance, considering the current popularity of Medicube in the US, APR is likely to maintain its solid performance. With new business initiatives expected to materialize next year, now is not the time to reduce holdings."