SK Securities has raised its target price for APR by 37.50% to 440,000 KRW (approximately $330), citing expectations of strong performance growth driven by the company’s expansion into U.S. brick-and-mortar stores and European B2C markets this year. The firm maintained its Buy rating on the stock.
On Friday, SK Securities analyst Hyung Kwon Hoon reported that MediCube, APR’s brand, currently ranks fourth in its category at Ulta Beauty stores across the United States. He projected that the brand would easily generate over $75 million in sales at Ulta this year.
Hyung noted that sales through Ulta operate on a B2B model, which reduces selling expenses and improves profitability, making it a highly lucrative channel for overseas revenue.
Furthermore, he highlighted that Ulta boasts 44.6 million active loyalty members, with 75% of these members shopping exclusively in-store. This presents APR with an opportunity to tap into a new customer base, separate from the U.S. online market it focused on last year, effectively broadening its customer reach.
The analyst suggested that if APR achieves notable success in penetrating the European online B2C market, it could lead to a valuation re-rating. He pointed out that there are currently few K-beauty brands with a significant presence in the Western European B2C market compared to the U.S.
Hyung explained that APR plans to aggressively target the European online B2C market, starting with the UK in October. He believes this strategy could pave the way for expanding into offline channels, leveraging the brand recognition gained through increased B2C sales volume.
The analyst added that APR will begin its B2C channel expansion in Germany this March, followed by other Western European countries. While acknowledging the need for tailored marketing strategies due to language differences, Hyung expressed confidence in APR’s success, citing the company’s strong in-house marketing capabilities.
