17 hours ago
K-beauty's new glow-up isn't in stores. It's on stock market
APR, which went public in February last year, has overtaken LG H&H to become Korea's No. 2 cosmetics stock
South Korea's beauty scene is making headlines again this month, but this time among stock investors and not beauty bloggers.
In a rare burst of momentum for a market long stuck in a boxed-in trading range, Korea's main bourse Kospi finally broke past the long-awaited 3,000 mark, closing at 3,021.84 on June 20.
The first such finish since December 2021 came as the cosmetics sector, one of the market's top performers, helped propel the index higher.
While sharp gainers included K-beauty names like Aekyung Industrial and TonyMoly, it was a new crop of next-generation brands that stood out, some of which notched new 52-week highs during intraday trading.
Cosmax, a leading Korean original design manufacturer, hit a new high of 287,000 won ($212) on Wednesday, while Silicon2, a global K-beauty wholesaler, reached its peak at 63,350 won on June 11. Another standout was d'Alba Global, a recent entrant that debuted on May 22 at 66,300 won and surged to an all-time high of 190,200 won on Tuesday.
Beauty-tech firm APR has also seen a meteoric rise, growing from a 1.9 trillion won market cap at its initial public offering just 16 months ago to nearly 5.37 trillion won as of Monday. It edged past LG Household & Health Care, at 5.33 trillion won, to claim the second spot in Korea's cosmetics sector.
Amorepacific still holds reigns with a market cap of 8.3 trillion won.
While LG H&H still leads in earnings, investors are betting on APR's breakneck growth. In the first quarter, it posted 266 billion won in revenue and 54.6 billion won in operating profit, up 79 and 97 percent from a year earlier.
Much of the momentum is spurred by upbeat consumer sentiment both at home and abroad from a renewed K-beauty craze overseas to flickers of optimism among Chinese shoppers.
'Expectations are building on signs of recovery in China's cosmetics market, fueled by strong shopping festival sales and the anticipated boost from nationwide consumption vouchers,' said a financial analyst at Shinhan Securities.
According to a researcher surnamed Bae at Mirae Asset Securities, global consumers are gravitating toward value-driven, trend-sensitive brands, with smaller K-beauty firms excelling in agile, social media-driven marketing strategies.
Macro winds are also blowing in favor of rising business sentiment, propped up by a planned 30-trillion-won government stimulus package. Among them is 13.2 trillion won in direct cash handouts to households, expected to lift domestic consumption stocks across sectors, from food and fashion to skincare.
Not all that glitters is gold, however, as some analysts warn that certain small-cap stocks are riding speculative waves.
One industry insider noted that it remains to be seen whether they can sustain their performance, with 'overseas growth and long-term channel expansion' serving as key barometers.
Meanwhile, legacy giants like Amorepacific and LG Household & Health Care have lagged behind newer market players, likely weighed down by persistent concerns over China's economic slowdown.
This month, as of Tuesday, Amorepacific rose 6.28 percent and LG H&H 4.75 percent, both underperforming the Kospi's average gain of 11.74 percent.
Still, recent earnings point to some recovery in China and beyond.
In the January–March period, Amorepacific Holdings's overseas sales surged 40.5 percent on-year to 473 billion won, while operating profit more than doubled to 69.6 billion won. LG H&H reported domestic sales of 1.16 trillion won, down 4.3 percent, while overseas sales rose 4.2 percent to 536 billion won.
