April 26, 2024

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[THE INVESTOR] The market will find Able C&C’s change of largest stakeholder positive, said Samsung Securities on April 24, raising the target price to 36,000 won (US$31.83) from 27,000 won. 

Able C&C Chairman Seo Young-pil has sold 25.5 percent stake, out of 29.3 percent he owns, to Venus One, a special purpose corporation established by IMM Investment.

While the cosmetics company is expected to continue showing good results in the first quarter, the fact that the shares have been sold at 54 percent higher rate than its closing price signals a brighter outlook, said analyst Park Eun-gyeong. 

The change raises the likelihood of overcoming the limit set by the management’s concentration on domestic sales, and of restructuring its financial structure, noted the analyst. 

Meritz Securities echoed the analysis maintaining a “buy” recommendation and raising the target price to 28,500 won from 25,000 won. 

Seo has practically sold the company to an investment firm, it will become more active in improving the distribution system and attracting investment to further expand overseas, said analyst Yang Ji-hye.

Although its first-quarter earnings will be slightly lower than market expectations, the operating profit ratio will improve on the back of introducing higher-margin makeup products and Japanese operation’s hike in exports, forecast the analyst. 

Daishin Securities agreed that the stock transfer agreement will be positive as it will lead to better management efficiency and possible lead to higher dividends, maintaining a “buy” recommendation and 32,000 won target price. 

By Hwang You-mee (glamazon@heraldcorp.com)