MERITZ Securities assessed on the 8th that Amorepacific Corporation is expected to record a strong operating profit of 426 billion won this year. It particularly valued the potential for future growth due to improvements in its business structure. The target stock price is 158,000 won, and the investment opinion remains a buy. The current stock price of Amorepacific Corporation is 104,000 won, indicating a potential increase of 51.9%.
Park Jong-dae, a researcher at MERITZ Securities, noted, “Amorepacific Corporation's regional, brand, and channel portfolio is stabilizing like L'Oréal,” adding that it shows the most balanced sales among domestic corporations in major countries.
Amorepacific Corporation's sales and operating profit are expected to grow by 13% and 93% year-on-year, reaching 4.39 trillion won and 426 billion won, respectively. Despite a 20% decrease in sales at duty-free shops domestically in the first quarter, the overall sales are expected to grow due to the growth of online, health & beauty (H&B), and department store distribution networks. Sales overseas are also expected to increase by 20-30% year-on-year, boosted by the acquisition effect of COSRX.
Research Institute Park assessed that Amorepacific Corporation's current business structure indicates it is moving toward becoming a brand conglomerate capable of sustainable growth in the medium to long term, rather than being 'ambiguous.'
Research Institute Park stated, “The COVID-19 pandemic has caused rapid changes in online and offline distribution networks,” adding that “business restructuring is reaching its final destination, balancing regional operations and increasing the overseas sales ratio to 45%.”
He further added, “Amorepacific Corporation shows aspects of L'Oréal in its regional and category-based business structure,” stating that for cosmetics brand corporations to grow into large enterprises, they must minimize risks just like L'Oréal.