d'Alba Global Co., Ltd. Target Price Cut Amid Slowing Growth; 'Stock Decline Is Excessive'

[Financial News] Shinhan Securities said on the 13th that while the slowdown in d'Alba Global Co., Ltd.'s sales growth was disappointing, the recent decline in its share price was excessive. It set a target price of 290,000 won, 6% below the previous target, and maintained its Buy rating.
Park Hyun-jin, an analyst at Shinhan Securities, said the sharp drop in the share price the previous day, despite strong domestic and overseas results, appeared to be due to slower companywide sales growth and an increased possibility of downward revisions to net profit estimates.
In the third quarter, d'Alba Global Co., Ltd. posted consolidated revenue of 155.6 billion won and operating profit of 33.4 billion won, up 36% and 101%, respectively, from the same period a year earlier. Operating profit was in line with estimates, but revenue growth fell short of the expected 58%. Net profit growth was also limited to 5% as non-operating expenses increased.
Park cited the slowdown in North American sales growth to about 31% as a disappointing point. Growth rates in both Amazon and offline channels were lower than in the previous quarter, and Park noted that the product lineup's expansion falling short of expectations may have been the reason.
However, Park viewed the improvement in profitability positively. Park said, “Even as peer companies' margins are falling amid logistics cost pressures and a stronger won, d'Alba Global Co., Ltd.'s margin has risen,” and forecast, “The trend of improving profitability will continue in the fourth quarter as well.”
The target price cut reflects a broader decline in valuation levels across the cosmetics sector. While maintaining its 2027 net profit forecast, Shinhan Securities lowered its target price-to-earnings ratio (PER) from 24 times to 20 times.
[email protected] Choi Doo-seon Reporter