NH Investment & Securities (005940.KS) cut its target price for Amorepacific (090430.KS) to 160,000 won from 180,000 won. While the company's earnings are expected to maintain a stable trajectory this year, the revision reflects a lowered target price-to-earnings ratio (PER) of 25 times, applying the valuation of global cosmetics peers.
"Despite stable earnings this year, Amorepacific's 12-month forward PER has fallen to 16.6 times due to concentrated supply-demand pressure," said Jung Ji-yoon, an analyst at NH Investment & Securities. "A trigger is needed for a meaningful stock rebound." She added, "In the second half, sales and ranking improvements in Western e-commerce channels for new growth brands such as Aestura, Illiyoon, Mamonde, Mise En Scène, and Labo-H will serve as the catalyst for stock recovery."
Jung estimated Amorepacific's second-quarter consolidated revenue at 1.0925 trillion won, up 8.7% from a year earlier, and operating profit at 100 billion won, up 35.8%. The figures are in line with market consensus. She projected domestic revenue to rise 8% to 595.2 billion won and operating profit to climb 54% to 61.8 billion won. Inbound channels including duty-free, MBS, and department stores are expected to perform well on the back of rising foreign tourist numbers, while e-commerce is also forecast to continue its growth.
Overseas operations are expected to continue a pattern in which North America, Japan, and Europe offset weakness in China. By region, revenue growth is estimated to fall 18% in China while rising 30% in Japan, 18% in North America, and 24% in EMEA. China is expected to maintain a profit base despite reducing department store outlets, while the U.S. growth rate is projected to recover from the previous quarter, supported by Laneige's new product launches and Aestura's high growth.
COSRX was also cited as a factor in earnings improvement. NH Investment & Securities expected COSRX's second-quarter revenue at 124.6 billion won and operating profit at 31.2 billion won, up 30% and 27% respectively from a year earlier. The firm explained that strong sales of suncare products on Amazon Europe and the RX line on TikTok Shop in the U.S. will underpin the results.
