[E-Daily Reporter Shin Ha-yeon ] On the 13th, Meritz Securities assessed that while APR(278470)’s third-quarter profitability would fall short of market expectations due to the strong won and increased costs associated with its expansion into European markets, the company’s high-growth trajectory—centered on overseas markets—remains unchanged. The firm maintained its “Buy” rating but lowered the target price by 6% from 550,000 won to 520,000 won.

Park Shin-ae, an analyst at Meritz Securities, stated, “Given the company’s explosive growth over the past nearly two years, the slowdown in third-quarter profitability is disappointing amid ongoing market concerns about a ‘weakening growth momentum.’ However, the fundamentals remain intact, and we believe that unfavorable exchange rate fluctuations have already been largely factored into the recent stock price correction.”

APR’s third-quarter consolidated revenue is estimated at 777 billion won, a 101% increase year-over-year, while operating profit is projected to rise 78% to 167.8 billion won. While revenue is expected to meet market consensus, operating profit is forecast to fall 15% short of the market expectation of 197.3 billion won. The operating profit margin is projected to be 21.6%, down 2.8 percentage points from the same period last year.

The main causes of the slowdown in profitability were cited as the strong won and increased logistics costs and sales commissions in Europe. Analysts note that since the combined revenue share from the U.S. and Europe accounts for nearly 70% of APR’s total revenue, the company is significantly impacted by exchange rate fluctuations.

Analyst Park explained, “Although the downward revision to third-quarter revenue estimates is minimal, the lowered expectations for profitability stem from the partial erosion of benefits from the won’s strength that persisted through the second quarter, increased air and inland transportation costs incurred while responding to the sharp rise in demand in Europe, and the burden of e-commerce fees within Europe.”

Consequently, the forecast for the third-quarter cost-to-sales ratio was revised upward from 22.0% to 23.2%, and the selling, general, and administrative (SG&A) expense ratio was revised upward from 53.4% to 55.2%. Excluding the impact of customs duty refunds, estimated at approximately 10 billion won, the actual cost-to-sales ratio is expected to be around 24.5%.

However, the assessment is that revenue growth remains robust. Estimated third-quarter revenue growth rates by region were 124% in the U.S., 689% in Europe, 13% in Asia, and 290% in other regions. While domestic revenue is expected to decline by 33% year-over-year, strong growth in the U.S. and Europe is projected to drive overall revenue expansion.

Particular attention was paid to the growth of the European business. Analyst Park noted, “In the early stages of our expansion into Europe, the priority is to respond promptly to surging demand, which is resulting in higher-than-expected costs,” but added, “We expect profitability in the European region to improve annually as we enhance operational efficiency and increase the share of offline sales.”

He projected this year’s annual revenue to reach 3.0582 trillion won, a 100.2% increase year-over-year, and operating profit to rise 96.2% to 709 billion won. For next year, he estimated revenue of 4.1094 trillion won and operating profit of 980.9 billion won.

However, reflecting cost pressures, operating profit estimates for 2026–2028 were lowered by approximately 5–8%. This year’s operating profit forecast was revised downward by 7.7% from the previous 767.9 billion won to 709 billion won, while next year’s forecast was adjusted downward by 6.7% from 1.0512 trillion won to 980.9 billion won.

Analyst Park emphasized, “There has been no change in the company’s fundamental competitiveness, and revenue growth is also in line with initial expectations,” adding, “If this robust revenue growth continues, it is only a matter of time before the leverage effect of fixed costs takes full effect.”

He added, “We recommend a buy strategy ahead of the fourth-quarter peak season.” Based on the closing price of 352,000 won on the 12th, the stock has upside potential of 47.7% to reach the target price.