AmoreG (002790) Company Update Summary
Core Content
AmoreG is a Korean cosmetics company currently under review by Samsung Securities. The report provides an analysis of its financial performance, market position, and valuation in light of recent changes and market conditions.
Key Financial Performance
- Current Price: KRW124,000
- Target Price: KRW130,000 (4.8% upside)
- Market Cap: KRW10.2t / USD9.0b
- Shares (float): 82,458,180 (31.3%)
- 52-Week High/Low: KRW164,500 / KRW109,500
One-Year Performance
| AmoreG (%) |
1M |
6M |
12M |
| AmoreG |
0.8 |
4.2 |
-24.6 |
| Vs Kospi |
-3.6 |
-10.4 |
-38.1 |
Key Changes
| Metric |
New |
Old |
Diff |
| Recommendation |
HOLD |
HOLD |
- |
| Target Price |
130,000 |
130,000 |
0.0% |
| 2017E EPS |
2,452 |
3,157 |
-22.3% |
| 2018E EPS |
3,808 |
4,729 |
-19.5% |
Samsung vs The Street
| Metric |
No of Estimates |
Target Price |
Recommendation |
| AmoreG |
16 |
131,333 |
3.1 |
Buy/Sell Distribution
- BUY★★★: 5
- BUY★★★: 4
- HOLD: 3
- SELL: 2
- SELL★★★: 1
3Q Preview
AmoreG's consolidated sales and operating profit (excluding Amorepacific) are expected to decline by 15% and 58% year-over-year, respectively, to KRW1.41t and KRW92.3b. This is below the quarterly consensus projections.
Samsung vs Consensus
| Metric |
3Q17E (A) |
Quarterly Consensus (B) |
Diff (%) |
| Sales (KRWb) |
1,406.1 |
1,510.6 |
-6.9% |
| Operating Profit (KRWb) |
92.3 |
150.9 |
-38.8% |
| Pre-tax Profit (KRWb) |
99.2 |
177.7 |
-44.2% |
| Net Profit (KRWb) |
73.9 |
123.8 |
-40.3% |
Sales Breakdown by Subsidiary
| Subsidiary |
1Q15 |
2Q15 |
3Q15 |
4Q15 |
1Q16 |
2Q16 |
3Q16 |
4Q16 |
1Q17E |
2Q17 |
3Q17E |
4Q17E |
| Sales (KRWb) |
1,443.8 |
1,413.2 |
1,346.6 |
1,457.6 |
1,759 |
1,720 |
1,654 |
1,564 |
1,855 |
1,413 |
1,406 |
1,462 |
| Amorepacific |
1,204.4 |
1,195.4 |
1,141.1 |
1,225.8 |
1,485 |
1,443 |
1,401 |
1,316 |
1,569 |
1,205 |
1,206 |
1,223 |
| Etude House |
71.6 |
64.4 |
56.5 |
65.4 |
81.4 |
84.5 |
75.7 |
75.0 |
81.3 |
58.6 |
56.8 |
62.3 |
| Innisfree |
142.6 |
146.5 |
136.9 |
166.1 |
186.6 |
213.6 |
176.9 |
190.8 |
198.4 |
153.5 |
146.8 |
172.9 |
| eSpoir |
7.1 |
6.8 |
7.1 |
9.0 |
8.5 |
9.0 |
9.3 |
11.1 |
12.5 |
9.8 |
10.2 |
13.1 |
| Amos Professional |
17.7 |
15.6 |
18.2 |
13.1 |
21.8 |
19.4 |
20.5 |
17.5 |
25.7 |
20.7 |
22.1 |
19.4 |
| Aestura |
17.7 |
28.8 |
23.0 |
22.6 |
24.3 |
32.9 |
25.0 |
21.2 |
27.7 |
34.8 |
27.0 |
24.2 |
| Non-cosmetics |
43.8 |
41.0 |
35.0 |
41.8 |
47.6 |
46.2 |
42.3 |
47.2 |
44.5 |
33.5 |
33.8 |
44.0 |
Financial Data Summary
| Metric |
2016 |
2017E |
2018E |
2019E |
| Revenue (KRWb) |
6,698 |
6,137 |
7,133 |
8,315 |
| Net Profit (adj) (KRWb) |
812 |
496 |
697 |
937 |
| EPS (adj) (KRW) |
4,052 |
2,452 |
3,808 |
4,973 |
| EPS (adj) growth (% y-y) |
27.2 |
(39.5) |
55.3 |
30.6 |
| EBITDA margin (%) |
19.5 |
15.2 |
17.3 |
19.2 |
| ROE (%) |
15.5 |
8.5 |
11.0 |
13.1 |
| P/E (adj) (x) |
30.6 |
50.6 |
32.6 |
24.9 |
| P/B (x) |
4.6 |
3.8 |
3.1 |
2.4 |
| EV/EBITDA (x) |
9.1 |
12.5 |
8.9 |
6.3 |
| Dividend Yield (%) |
0.4 |
0.4 |
0.6 |
0.8 |
Valuation Summary
| Year-end Dec 31 |
Sales (KRWb) |
Operating Profit (KRWb) |
Pre-tax Profit (KRWb) |
Net Profit (KRWb) |
EPS (KRW) |
Chg (% y-y) |
P/E (x) |
P/B (x) |
ROE (%) |
EV/EBITDA (x) |
Net Debt (KRWb) |
| 2014 |
4,712 |
659 |
682 |
497 |
2,271 |
23.4 |
54.6 |
6.2 |
12.1 |
13.9 |
(1,029) |
| 2015 |
5,661 |
914 |
922 |
674 |
3,185 |
40.3 |
38.9 |
5.3 |
14.6 |
10.5 |
(1,362) |
| 2016 |
6,698 |
1,083 |
1,088 |
812 |
4,052 |
27.2 |
30.6 |
4.6 |
15.5 |
9.1 |
(1,600) |
| 2017E |
6,137 |
665 |
665 |
496 |
2,452 |
(39.5) |
50.6 |
3.8 |
8.5 |
12.5 |
(1,804) |
| 2018E |
7,133 |
929 |
935 |
697 |
3,808 |
55.3 |
32.6 |
3.1 |
11.0 |
8.9 |
(2,436) |
| 2019E |
8,315 |
1,237 |
1,256 |
937 |
4,973 |
30.6 |
24.9 |
2.4 |
13.1 |
6.3 |
(3,373) |
Key Insights
- AmoreG's sales and operating profit are expected to decline year-over-year due to stricter duty-free purchase limits.
- The market is likely to take a wait-and-see approach, as the performance of the flagship Innisfree store in New York remains uncertain.
- Despite the revised earnings forecasts, the target price remains at KRW130,000, reflecting a higher multiple based on long-term growth potential.
- The firm is expected to focus on sustaining steady sales growth rather than a short-term earnings recovery in 2018.
- The US operations, while promising, are unlikely to offset the sluggish performance of duty-free sales in the short term.
