April 27, 2024

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[THE INVESTOR] Amorepacific’s third-quarter earnings will be halved, said Mirae Asset Daewoo on Sept. 19, lowering the target price to 380,000 won (US$336.28) from 400,000 won.

Its revenue in the period will be down 14.3 percent on-year to 1.20 trillion won and operating profit by 44.4 percent to 93.1 billion won, estimated analyst Ham Seung-heui. 

Domestic sales dropped 20.8 percent while overseas sales climbed up 1.1 percent, and in China in particular, the sales growth rate returned to double digits at 14.4 percent, explained the analyst. Profits however might decline slightly as duty-free sales, a higher-margin channel for the cosmetics company, could deteriorate further, she added. 

Although it is hard to gauge whether negative factors will improve, Amorepacific’s management capacity both for the products and the brands are continuously strengthening, noted the analyst maintaining a “buy” recommendation.

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