April 26, 2024

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[THE INVESTOR] CLIO Cosmetics is laying grounds for mid- to long-term growth despite the declining demand from China this year, said IBK Securities on Dec. 12, raising the target price to 48,000 won (US$44.06) from 43,000 won.

Its revenue and operating profit this year will reach 197 billion won and 9.3 billion won, respectively, estimated analyst An Ji-yeong. In addition to the China issue, the cosmetics company was burdened by rising personnel costs, weakening sales in stores in areas frequented by foreign customers and marketing costs for launching new brands, she explained. 

Its recent plans for overseas expansion and 1 trillion won revenue target by 2022 are constructive and its revenue and operating profit next year will reach 256 billion won and 23.5 billion won respectively, according to the analyst. 

To counter the declining exports to China, it is moving up the timeline to enter the US where demand for K-beauty is growing, underlined An. 

Although its profits will inevitably slide, it could still expand from strengthening strategies both at home and abroad, added the analyst. 

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