[THE INVESTOR] Amorepacific failed to meet earnings estimates in the second, said NH Investment and Securities on July 27, lowering the target price to 290,000 won (US$260.23) from 320,000 won.
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Innisfree flagship store in Chengdu, China |
Its earnings widely missed market expectations as plummeting duty-free sales dragged down the bottom line, said analyst Han Guk-heui.
The Asian market betrayed expectations for solid demand and revenue remained stagnant, and China in particular showed weakness, said the analyst.
Sales in mainland China began to recover recently but the speed needs to be examined closer, pointed out Han, adding that if the environment does not change dramatically, the beauty giant will post earnings slower than estimates not only in the latter half of this year but also in 2018.
The stock price, 30 times its price-earnings ratio, still is high, according to the analyst maintaining a “hold” recommendation.
By Hwang You-mee (
glamazon@heraldcorp.com)