[THE INVESTOR] Amorepacific will come out of undervaluation as China-Korea relations warm up, said Shinhan Investment on April 3, raising the target price to 400,000 won (US$377.86) from 370,000 won.
The duty-free sector has hit by decline in tourism from China and its first-quarter earnings will be slow with 1.5 trillion won revenue and 224.3 billion won operating profit, down 6 percent and 29.2 percent on-year, respectively, estimated analyst Lee Ji-yong.
Expectations are rising for full recovery from the diplomatic row over THAAD deployment. From the second quarter, Amorepacific’s duty-free sales are expected to swing back to an upturn, said Lee.
Revenue from duty-free stores in the period will hike 31.2 percent on-year to 309.5 billion won, and in the third quarter leap 84 percent to 436.1 billion won, he forecast maintaining a “buy” recommendation.
By Hwang You-mee (glamazon@heraldcorp.com)