Shinhan Investment Corp. reported on July 9 that A.P.R. continues to experience strong growth, particularly in the U.S. and European markets. The firm maintained its 'buy' rating and raised the target price from 500,000 won to 540,000 won.
Park Hyun-jin, a researcher at Shinhan Investment Corp., stated, "A.P.R. is driving overall revenue growth with triple-digit sales growth year-on-year in the U.S. and Europe. As the leading indie beauty company in South Korea, we expect this high growth to continue through the second half of the year."
Shinhan Investment Corp. forecasts A.P.R.'s consolidated revenue for the second quarter of this year to reach 788 billion won, a 140% increase from the same period last year, while operating profit is expected to rise by 130% to 194.6 billion won. These figures exceed market expectations by 20% for revenue and 16% for operating profit.
The cosmetics segment is the primary driver of this growth. Revenue from cosmetics and home beauty devices is projected to increase by 195% and 23%, respectively, compared to the previous year. Park noted, "In terms of regions, sales in the U.S. are expected to grow by over 250%, while other regions, including Europe, will see sales increase by over 220%. However, domestic sales may decline by around 10% due to inventory adjustments for the fashion brand NERDY and beauty devices."
Particularly, the growth in the U.S. market is expected to be significant. Park highlighted that the number of Mediheal products entering the Amazon Top 100 in the U.S. expanded from 7-9 in the first quarter to 16 in the second quarter, and Ulta's offline sales have shown triple-digit growth compared to the previous quarter. He added, "Starting in the second quarter, sales from deliveries to Target and Walmart will also begin to be reflected."
Growth is also continuing in the U.K. and Germany. Park mentioned, "In Europe, Mediheal products have ranked among the top 100 on Amazon in the U.K. and Germany, with 5-7 products listed. However, due to increased marketing costs for Amazon Prime Day in the second quarter, operating profit margins may temporarily decline, but this is an investment aimed at expanding sales." He also noted that shipping cost burdens are on a downward trend.
* This article has been translated by AI.
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