[Edaily Reporter Kim Hyung-il ] SKSecurities forecasts that APR(278470)will see expanded revenue growth, particularly in the U.S. brick-and-mortar and European markets. It also maintained its “Buy” rating and target price of 560,000 won.

On the 7th, SKSecurities analyst Hyung Kwon-hoon analyzed that while revenue growth through last year was driven primarily by Amazon in the U.S. and cross-border channels, revenue growth this year is centered on U.S. brick-and-mortar channels and the European region.

The U.S. offline beauty market is 1.5 times larger than the online market, while the European market is 1.37 times larger than the U.S. market. Since this year marks APR’s first year of full-scale penetration into both markets, the analyst assessed that there is significant revenue growth potential driven by increased channel penetration.

The company projected that the revenue growth rate in North America for the second half of the year would reach 113%. In the third quarter, revenue is expected to be driven by reorder sales from offline channels where the company gained a foothold in the first half of the year, as well as sales on Amazon. The company explained that even without promotions, it has maintained high rankings and traffic on Amazon since Prime Day. As of August, Medicube’s Amazon Best Sellers Rank (BSR) score for the third quarter improved by approximately 15% compared to the second quarter.

The company projected that sales growth in Europe for the second half of the year would reach 475%. Based on cumulative data through August, MediCube’s Amazon BSR scores in five Western European countries improved by 39% compared to the second-quarter average, leading to expectations of significant growth in online business-to-consumer (B2C) sales. Next year, the company is expected to begin expanding into offline channels in earnest, building on this year’s performance in the B2C channel. While the brand has so far secured meaningful placements primarily at Sephora stores across Europe and Boots in the UK, the company anticipates further expansion into additional countries and channels next year.

While the European beauty market is 1.37 times the size of the North American market, North America and Europe account for 72% and 28%, respectively, of APR’s revenue this year. Based on this, Analyst Hyung predicted that the European market will drive APR’s earnings growth next year.

He also predicted that the impact of the strong Korean won would be minimal. Analyst Hyung analyzed, “While there is a possibility of a short-term impact on profit margins, it is unlikely to be significant.” Assuming an average exchange rate of 1,420 won for the third quarter, Analyst Hyung estimated that the resulting decline in operating profit margin would be less than 1 percentage point. He concluded that the impact of exchange rates would be minimized thanks to the company’s high gross profit margin (GPM).