Hanwha Investment Securities announced on August 6 that it has raised its target price for APR from 500,000 won to 550,000 won, reflecting the company's expansion into the European market and growth in its cosmetics business. The firm maintained its 'buy' rating.
Han Yu-jung, a researcher at Hanwha Investment Securities, stated, "In the second quarter, consolidated revenue reached 767.5 billion won, and operating profit was 190.6 billion won, exceeding the market consensus operating profit of 178.1 billion won. While some U.S. tariff refunds were reflected, the remaining refunds are expected to be gradually accounted for in the second half of this year and into 2027."
She added, "Although sales of beauty devices decreased compared to the previous quarter due to the transition from Booster Pro to Booster Pro X2, cosmetics sales drove overall growth, reaching 648.3 billion won. In North America, strong sales during Amazon Prime Day and TikTok Shop, along with the expansion of offline stores, continued, and in Europe, direct online business is rapidly expanding in the five major countries: the UK, France, Spain, Italy, and Germany."
Han noted that the second quarter saw increased air transport costs due to changes in the Prime Day schedule and geopolitical risks, but this was viewed as a temporary cost increase to meet excess demand. She believes that cost reductions will be possible after securing local safety stock.
"Proven hit SKUs and operational methods from the U.S. are rapidly spreading to Europe, which is still in the early expansion phase centered on the top five countries, indicating significant potential for further growth," Han said. She also mentioned that the company has raised its annual guidance for 2026 from a revenue target of 2.1 trillion won and an operating profit margin of 25% to a revenue target of 3 trillion won and an operating profit margin of 24% to 26%.
Furthermore, she indicated that while there may be revenue growth challenges in the third quarter due to the pre-reflection of Prime Day effects, sales are expected to grow again in the fourth quarter, which will focus on major shopping events and channel and regional expansion. She maintained her recommendation as the top pick in the cosmetics sector.
* This article has been translated by AI.
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