Expected to expand, but the numbers are still
기대감 확대, 하지만 숫자는 아직
Hana Financial Investment | 2018.03.12
1. Cosmetics / distribution: Positive possibility of resolving North Korean nuclear uncertainties
1) North American summit news, meaning, but nothing changes
With the specific timing of the North American summit, the possibility of mitigating the North Korean nuclear crisis is growing. Recalling that the Sad placement was also triggered by the North Korean nuclear crisis, the Korean stock market could be a recovery factor for the overall stock market and cosmetics / retailers could gain visibility into China's inbound recovery. Two things have to be considered.
First, a new phase is right, but it is not yet in numbers. It is true that the North Korean nuclear crisis and the possibility of actual annihilation of the Sad reprisals have clearly increased, but this is not a direct link to China's inbound recovery. We do not know what will happen to the process of going to the North American summit, and we are careful after the talks.
Nothing has changed. If we look at the current situation of China inbound in January ~ February, we are worried about whether we should lower our estimate due to the delay. For example, Amorepacific operating profit of W757bn in 2018 and operating profit of W192bn of Hotel Shilla are assumed to increase 80% YoY in China. We do not expect earnings forecasts to be revised up due to this news. If so, last Friday's share price rally is due to purely anticipated valuation gains. As the valuation of cosmetics companies is not absolutely undervalued, there is a limit to the trend of rising share prices.
Second, it is necessary to sort out the stocks in preparation for the upward trend. It is also clear that the likelihood of China's inbound recovery has increased. We need a revised strategy that includes 4Q results and 1Q forecast. There are some companies that are better than expected and those that did not, and there have been large-scale M & A deals.
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