APR, which has been on a steep share price rally, has emerged as the top beauty company by market capitalization among leading Korean, Chinese, and Japanese firms. Explosive growth centered on global markets is driving a rapid reassessment of the company's value.
According to the Korea Exchange on Tuesday, APR's market capitalization stood at 15.89 trillion won ($11.7 billion) as of last Thursday. The figure far exceeds those of Amorepacific (7.91 trillion won) and LG Household & Health Care (3.88 trillion won) on the same day. Even when factoring in the market capitalization of Japan's leading cosmetics firm Shiseido at 1.27 trillion yen (approximately 11.75 trillion won), APR has surpassed all major East Asian beauty large-caps. APR's share price surged 82.19% from the start of this year through last Thursday. Shiseido rose only 37.74% over the same period.
This market capitalization carries significance as it represents an earnings-based revaluation rather than a mere share price rally. Analysts are paying close attention to APR's global expansion. Global investment bank JP Morgan said in a recent report that "the high-growth structure centered on the U.S. and Europe is in full swing, entering a new stage," and raised its target price to 450,000 won.
Analysts are also raising expectations for APR's first-quarter revenue this year. Meritz Securities projected APR's first-quarter revenue at around 550 billion to 590 billion won, more than double the year-earlier figure, with operating profit soaring 164% to 149.3 billion won. JP Morgan particularly forecast that APR's U.S. revenue would reach about 260 billion won, up 267% year-on-year, while Japan would grow to 76 billion won (+158%) and Europe to 153 billion won (+152%). Goldman Sachs said, "The share of U.S. revenue is expanding beyond 40%, and the effects of rising Amazon bestseller rankings and entry into the European Sephora network are taking full effect." The firm identified multiple products entering the top ranks of Amazon bestsellers in the U.S. market and the launch of offline expansion through the Sephora network in Europe as key growth drivers. Goldman Sachs said, "First-quarter results are expected to significantly exceed both consensus estimates and company guidance," and raised its revenue and profit estimates across the board.
Global expansion is indeed accelerating across the K-beauty industry as a whole. Cosmetics exports to the U.S. in the first quarter of this year rose 40% year-on-year, while exports to Europe jumped 53%, surpassing the U.S. The number of K-beauty products in Amazon's Beauty Top 100 has also expanded to 28, underscoring a growing presence on global online channels. Park Jong-dae, an analyst at Meritz Securities, said, "The Korean cosmetics industry has entered a phase of global expansion incomparable to the past," adding that "companies like APR that are delivering results in both the U.S. and Europe simultaneously are highly likely to see further earnings upgrades and share price revaluation."
