[Alpha Biz=(Chicago) Reporter Paul Lee] Yuanta Securities lowered its target share price from 165,000 won to 145,000 won on the 5th, saying, "Its performance was sluggish in the fourth quarter of last year and it is difficult to improve profitability this year." The investment opinion 'buy' was maintained.

AmorePacific's sales in the fourth quarter of last year, which was announced on the 31st of last month, were 926 billion won, down 14.9% from a year earlier. Operating profit fell 63.7% over the same period to 20.7 billion won, below market expectations.

"Chinese sales fell by more than 40% on a localized product basis due to inventory reduction," Yuanta Securities said. "In particular, Sulwhasoo and Ryeo products fell 60% and 50% year-on-year, respectively."

Yuanta Securities, however, analyzed that domestic business operating profit improved in the fourth quarter of last year. "Amorepacific's sales of domestic premium brands have increased," Yuanta Securities said. "On the other hand, sales of less profitable daily beauty products were reduced, but profitability increased as the overall product mix improved."

 

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