d'Alba Global Co., Ltd. Falls Short of Q3 Revenue Expectations; Target Price Cut to 215,000 Won

[Financial News] Korea Investment & Securities lowered its target price for d'Alba Global Co., Ltd. by 28.3%, from 300,000 won to 215,000 won, saying investor sentiment had weakened as third-quarter revenue fell short of market expectations. It maintained its “Buy” rating.
Kim Myeong-ju, an analyst at Korea Investment & Securities, said in a report on the 13th that “the share price could become more volatile in the short term,” and recommended “considering buying on dips after assessing the results of Black Friday promotions and the expansion of the offline distribution network.”
d'Alba Global Co., Ltd.'s third-quarter revenue rose 36.3% year on year to 155.6 billion won, but came in 8.9% below market expectations. Operating profit increased 100.6% to 33.4 billion won, in line with expectations. The operating margin was 21.5%.
The stronger won and slower sales in some countries weighed on revenue. The average won-dollar exchange rate in the third quarter fell 5.6% from the previous quarter.
Domestic revenue fell 4.1% year on year due to a gap in sales following ingredient changes to some products. Revenue contracted for a second consecutive quarter, following the previous quarter.
Revenue in Japan fell 31.4% from the previous quarter to 24.7 billion won due to a decline in business-to-business (B2B) sales. Revenue in Russia came to just 15.3 billion won amid the war and logistics conditions, falling short of the 18.7 billion won recorded in the second quarter of last year, its all-time high.
However, US revenue is expected to recover starting in the fourth quarter. d'Alba Global Co., Ltd.'s products are currently sold at around 400 Costco stores in the United States, and the number of stores carrying them is expected to expand to 625 nationwide next year.
Kim said that “third-quarter results were solid in absolute terms when the impact of exchange rates is taken into account,” but explained that “with strong growth in cosmetics exports and among original design manufacturing (ODM) companies raising market expectations for brand companies, d'Alba Global Co., Ltd.'s revenue growth fell short of expectations.”
Cosmetics exports rose 30.8% year on year in the second quarter and 38.2% in the third quarter of this year. Kim said that, as the market is taking a strict view of whether brand companies can sustain growth, d'Alba Global Co., Ltd. would need to post revenue growth that outpaces the broader industry’s export trend for its share price to rebound.
Kim said that “this is a time to assess the potential for stable revenue growth,” and predicted that “Black Friday sales and the results of expanding offline distribution networks, including in the United States, will determine the share price’s future trajectory.”

[email protected] Lee Jeong-hwa Reporter