This article was published on April 13, 2025, at 5:44 p.m. on the ChosunBiz MoneyMove site.
K-beauty hopeful d'Alba Global is looking to capitalize on the benefits of the ongoing tariff war initiated by the United States. When U.S. President Donald Trump first announced comprehensive mutual tariffs, there were concerns that the listing might be derailed due to the significant negative impact. However, the postponement of mutual tariffs on countries other than China has increased the possibility of positive outcomes.
d'Alba Global generated about half of its total revenue overseas last year, yet its sales in the United States remain significantly lower compared to its K-beauty competitors. The positive aspect is that it has become competitive in pricing with China. In fact, d'Alba Global maintained its valuation even after submitting an amended securities report detailing the impact of tariffs.
According to financial investment industry sources on the 13th, d'Alba Global, which operates the K-beauty brand "d'Alba," submitted a corrected securities report to the Financial Supervisory Service on the 10th. The Financial Supervisory Service is understood to have requested the corrections to protect investors regarding the additional impacts of tariffs imposed by the Trump administration on U.S. exports.
Global stock markets have been volatile since U.S. President Trump's signing of the mutual tariff executive order on the 2nd (local time). On the 5th, a uniform universal tariff of 10% on all countries' exports to the United States took effect. The mutual tariffs (25% for South Korea) have been postponed for 90 days.
d'Alba Global devoted a significant portion of its amended securities report to explaining concerns regarding tariff-related uncertainties and volatility. Notably, the company stated, "New cost burdens have emerged for Korean cosmetics, which previously had no tariffs," adding, "These cost increases could act as indirect factors that lower profitability."
However, the market capitalization after the listing has remained at 800.2 billion won based on the upper range of the target public offering price (54,500 to 66,300 won) presented when the initial securities report was submitted on the 25th of last month. This is true for four comparable companies including LG H&H, APR, Hankook Cosmetics, and VT, which have also maintained their PER multiples and discounts.
As of the date of the amended securities report submission, LG H&H's stock price was 309,500 won, which is down 4% from this year's peak, while APR's stock price, which rose to 71,300 won during this year's closing, has fallen to 65,900 won. Hankook Cosmetics and VT's stocks also showed weakness due to tariff concerns.
d'Alba Global appears to be viewing tariff uncertainties as an opportunity. In its securities report, under investment risk factors, it stated, "The current U.S. tariff policy shows mixed trends, and there may be possibilities of gaining a competitive edge depending on the level of tariffs imposed by each country," expressing confidence.
Industry insiders believe that d'Alba Global has a significant chance to gain a competitive advantage over other K-beauty brands amid the uncertainty of the U.S. tariff policies initiated by Trump. Firstly, d'Alba Global appears to have a low dependence on the U.S. market, with only 7% of its total revenue coming from U.S. sales last year.
The United States has recently been considered the hub of popularity for K-beauty, particularly among small indie brands. Even after Korea's cosmetics exports surpassed $10 billion for the first time last year, it was largely due to the U.S. K-beauty exports to the U.S. increased by $690 million year-on-year, accounting for 18.7% of total exports.
As a representative of K-beauty, APR, a major competitor of d'Alba Global, generated 22% of its total revenue from the U.S. last year. Notably, in the fourth quarter of last year, its overseas revenue accounted for 64% of the total, with U.S. sales rising to 28% of the total revenue.
d'Alba Global also has a high level of overseas revenue. Last year, it earned 1.409 billion won from overseas, accounting for 45.61% of its total revenue of 3.091 trillion won. However, the highest share of overseas revenue was from Russia, which accounted for just 13.0% of total revenue, followed by Japan at 10.2%.
An industry insider noted, "Compared to APR, which has high exposure to U.S. sales, d'Alba Global has a lower risk of tariff exposure" and added, "The low sales proportions in both the U.S. and Japan can also be interpreted as having additional growth potential in this market."
The fact that d'Alba Global's main product, the mist serum, has a low supply cost is also considered a competitive advantage compared to APR. As a beauty tech company, APR earns half of its total revenue from sales of beauty devices, which means that tariff imposition would significantly increase their price burden.
Specifically, the U.S. market price for APR's flagship product, the Mediheal 'Age-Real Booster Pro,' is about $200. Considering that the cost rate is about 30%, the supply cost would be around $60, and with a 10% tariff, an additional $6 in costs would apply.
In contrast, d'Alba Global's mist serum sells for around $35. Even if the maximum supply price of $11 is added to the retail price with a 10% tariff, the selling price would remain at around $36. The approximate $1 increase could be adjusted through a reduction in supply costs or through cost-sharing arrangements with local distributors.
An industry official said, "While we cannot predict what the second half of this year will be like when the 25% mutual tariff suspension ends, K-beauty's popularity in the U.S. is still strong" and added, "The approximate $1 increase is currently borne by distributors, who are reducing promotions and other methods."
Some believe that the imposition of tariffs on U.S. exports will lead to an overall strengthening of K-beauty's competitiveness. This is because Chinese cosmetics, which had formed competitive relationships with K-beauty brands emphasizing cost-effectiveness, are at risk of losing price competitiveness due to higher mutual tariffs.
For instance, e.l.f. Beauty, which captured the young U.S. consumer market with products priced around $10, faces a crisis. The Trump administration on the 10th postponed mutual tariffs but excluded China, which is understood to have tariffs of 125% applied to its products.
While the mutual tariff rate for the U.S. regarding the cosmetics industry is favorable at 20% compared to Korea, it is also advantageous that European cosmetics do not directly compete with K-beauty. Companies like d'Alba Global have built competitiveness in the basic cosmetics sector rather than color cosmetics.
Kolmar Korea, the leading contract manufacturer in the cosmetics industry, is also likely to become a supporter of d'Alba Global in the U.S. market. Kolmar Korea owns 2% equity in d'Alba Global and already has a cosmetics manufacturing plant in the U.S. Tariff-free status applies when producing d'Alba Global's volumes.
The company noted that it plans to implement strategic buffer measures by developing distribution based on its U.S. subsidiary and utilizing an OEM/ODM contract manufacturer with local production facilities for key products and stated, "We will minimize negative impacts."
However, the need to navigate the uncertainty in domestic and international stock markets due to Trump’s mutual tariffs is seen as a challenge. This has already cooled the enthusiasm in the public stock market, making it more difficult for large IPOs that aim to raise significant capital compared to smaller firms.
d'Alba Global plans to offer 604,000 newly issued shares (92.4% of the offering stocks) and 50,000 shares for sale, totaling 654,000 shares. Based on the upper range of the desired offering price, the target fundraising amount is projected to be 43.4 billion won. It plans to conduct demand forecasting by the end of this month and aim for listing in mid-next month through general subscriptions.