1. What Happened? – Q2 2025 Earnings Analysis

Amorepacific Holdings reported revenue of KRW 1.095 trillion, operating profit of KRW 80.1 billion, and net profit of KRW 50.7 billion for the first half of 2025. These figures fell short of market consensus by 3%, 7%, and a substantial 45%, respectively. The significant decline in net profit raises concerns about deteriorating profitability.

2. Why Did This Happen? – Reasons for Underperformance

External factors include exchange rate volatility, rising raw material prices, and intensifying competition in the Chinese market. Internally, Q2 performance was significantly weaker than Q1, contributing to the overall sluggish results.

  • External Factors: Increased exchange rate volatility, rising raw material prices, intensified competition in the Chinese market.
  • Internal Factors: Weak Q2 performance.

3. What’s Next? – Outlook and Investment Strategy

While downward pressure on the stock price is expected in the short term, there are positive aspects to consider for the long term. The solid performance improvement of major subsidiaries, strengthening brand competitiveness, and securing sound financials are encouraging factors. Therefore, investors should focus on the company’s fundamentals and long-term growth potential rather than short-term stock price fluctuations.

4. Investor Action Plan

Amorepacific Holdings needs to focus on improving profitability, securing new growth engines, managing exchange rate risk, and enhancing shareholder communication. Investors should consistently monitor the results of these efforts and establish a mid- to long-term investment strategy.