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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] Global investment bank Goldman Sachs has resumed its coverage of the K-beauty sector, selecting APR Corp. as its top pick and projecting that the industry is entering a second major growth cycle driven by independent brands. The firm noted that Korea’s traditional, large-conglomerate-led market structure is shifting as indie players expand from online to offline channels.
According to industry sources on December 10, Goldman Sachs issued a “Buy” rating on APR with a 12-month target price of 380,000 won, citing the company’s strong momentum on global platforms through its Mediheal business and its diversified SKU expansion strategy. With APR’s stock closing at 252,000 won, the target implies roughly 50% upside potential. The bank highlighted APR’s combination of broadened product offerings and new retail channel penetration as key drivers of growing customer loyalty.
Goldman Sachs added that Korea’s beauty sector is entering a new boom cycle led by indie brands, supported by the country’s robust manufacturing infrastructure and the global trend toward the “democratization of luxury beauty.” APR’s ongoing expansion into overseas retailers—including Japan’s Don Quijote and U.S. beauty chain Ulta—was also cited as a catalyst for multi-year growth.
Conversely, the firm issued a cautious outlook for LG Household & Health Care, reiterating its “Sell” rating and maintaining a target price of 230,000 won (vs. current 263,000 won). Goldman Sachs noted that restructuring in duty-free and China-focused segments is only in its early stages and that ongoing deleveraging pressure from declining revenues may delay a meaningful recovery.
For Cosmax, Korea’s leading ODM manufacturer, the bank acknowledged benefits from indie brand growth but warned that high capex requirements and rising small-batch orders may limit operating leverage. As recent order wins have yet to translate into meaningful earnings or shareholder returns, Goldman Sachs assigned a “Neutral” rating.
Amorepacific was upgraded from “Sell” to “Neutral” due to improving profitability in China and easing performance uncertainties. While key brand COSRX is expected to sharply reduce its revenue decline in Q4, the firm cautioned that intensifying market competition may lead Amorepacific’s 2027 earnings to fall below consensus expectations.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
