[THE INVESTOR] Amorepacific’s second-quarter earnings will show the effects of decline in inbound tourism from China, said Meritz Securities on June 29, maintaining a “hold” recommendation and lowering the target price to 340,000 won (US$298.25).
Its revenue will fall 10.3 percent on-year to 1.29 trillion won and operating profit will plunge 48.2 percent to 124.7 billion won, missing the market expectations, said analyst Yang Ji-hye.
As the number of Chinese tourists dipped by 40 percent in March and 66.6 percent in April from the same period last year, revenue from duty-free stores fell by 50 percent, and other distribution channels suffered as well, said the analyst.
Limited marketing campaign in China slowed down the growth of Asian operations to 10 percent while branches in the US and Europe had restructuring issues, but overseas business will recover faster than at home, noted Yang.
By Hwang You-mee (glamazon@heraldcorp.com)