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(Photo= Yonhap news) |
[Alpha Biz= Reporter Kim Sangjin] NH Investment & Securities has maintained a 'Buy' rating on Amorepacific but revised its target price from 200,000 won to 180,000 won.
The firm stated, "Even with a conservative assumption that the loss from China will remain at 115 billion won next year, we believe Amorepacific's valuation floor is set at 7.6 trillion won. This adjustment presents a mid-to-long-term buying opportunity."
NH Investment & Securities forecasts that Amorepacific's third-quarter consolidated revenue will reach 970.8 billion won (+9% YoY), with an operating profit of 38 billion won (+120%). However, this operating profit is expected to fall 28% short of expectations.
The company noted, "Domestic cosmetics sales are projected to be 430.2 billion won (-3%) with an operating profit of 21.5 billion won (-1%) due to a 27% decline in duty-free sales, which will reduce domestic profitability." It also expects sales of consumer goods to be 90.9 billion won (-7%) with an operating loss of 2.5 billion won, citing intensified competition in mid-to-low-priced product categories in some channels.
On the international front, NH Investment & Securities anticipates overseas revenue of 434.8 billion won (+37%) and operating profit of 22.3 billion won (turning positive). Regional forecasts include a 43% decline in China, a 20% increase in North America, and a 25% increase in EMEA (Europe, the Middle East, and Africa). The firm expects an operating loss of 51 billion won due to structural changes in the China distribution business, inventory write-offs, and workforce restructuring.
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
