Stellar Earnings at APR, with Plenty of Growth Upside Remaining [Click e-Stock]

Record-High Earnings in Q4 Last Year
Balanced Growth Across the United States, Europe, and Other Regions

APR posted fourth-quarter results last year that easily exceeded market expectations. Analysts also assess that there is ample room for additional growth in regions such as the United States and Europe going forward.

On the 5th, DB Financial Investment raised its target price for APR by 20% to 360,000 won on this basis, while maintaining its "Buy" investment rating. The previous day's closing price was 264,000 won.

On a consolidated basis, APR recorded sales of 547.6 billion won and operating profit of 130.1 billion won in the fourth quarter of last year. These figures represent increases of 124.2% and 227.9%, respectively, compared with the same period a year earlier. In terms of operating profit, the company significantly outperformed the market consensus of 113 billion won, setting a new record high.

The proportion of overseas sales rose to as high as 87%. By region, both online and offline sales in the United States grew steadily during the year-end peak season. In Europe and other regions, the effects of market and channel diversification pushed quarterly sales above 100 billion won. Although company-wide marketing expenses as a percentage of sales rose slightly from the previous quarter to 18.3%, the gross profit margin improved by 4.2 percentage points year-on-year, driven by tighter discount rate management and fixed-cost leverage effects.

For the time being, sales are expected to grow steadily across major countries such as the United States, Europe, and Japan. In particular, the growth momentum in Europe and other regions is considered encouraging. At present, the number of SKUs (stock keeping units) for APR's brand Medicube listed at Ulta Beauty in the United States is only around 15. Sales are expected to grow in proportion to the planned increase in SKUs and shelf space. It is also reported that negotiations are underway for additional retail channel listings in the second half of the year. For Europe and other regions, the expansion of distribution channels such as online and B2B (business-to-business) is expected to help the company comfortably achieve annual sales of more than 500 billion won.

Heo Jena, a researcher at DB Financial Investment, explained, "Brand awareness in the global market is rising rapidly, and the effects of market, distribution channel, and product diversification are appearing simultaneously," adding, "There is ample upside potential for the share price, backed by strong earnings growth."