141202 Cosmetics finalfile.myasset.com/sitemanager/upload/2014/1202/18240446/... · 2014. 12....

Sector Report Dec 2, 2014

I. 2015 Korean cosmetics market outlook (p.2)

1) Korean and Chinese market outlook: Korea’s cosmetics market will likely grow by at least

5.0% in 2015 to reach $10.8bn and China’s should grow by at least 8.0% to reach $51.6bn.

2) Chinese visitor growth and expectations for Korea’s duty-free shop growth: With the number

of Chinese travelers to Korea likely to grow 30% YoY in 2015, duty-free cosmetics sales

should continue growing strongly. Ten downtown duty-free stores are expanding their gross

area by 42.8% in 2015, and the government is set to grant more duty-free store licenses.

Thus, duty-free cosmetics sales growth is likely to outpace Chinese traveler growth to Korea.

3) Korea’s cosmetics exports growing sharply: Korea’s cosmetics imports have stagnated at

W1tn since 2012, while cosmetics exports have grown about 20% YoY. Korea’s trade balance

of cosmetics (including fragrance and personal care products) should enter positive territory in

2014, and net exports over 1Q~3Q14 came to $233mn. Considering the effect of China’s

Singles’ Day (Nov 11), Korea’s net exports should exceed $403mn in 2014.

II. Changes in China’s cosmetics market (p.7)

1) Consumption taxes on cosmetics expected to decline, benefits from Korea-China FTA: Make-

up products account for just 6.9% of China’s cosmetics market, and the government imposes

a 30% consumption tax on make-up and functional products, because they are regarded as

luxury goods. The government is likely to re-categorize cosmetics products into low- to mid-

end and high-end products and abandon consumption taxes on low- to mid-end products in

the future and Korea’s mass brands (“Laneige,” “Mamonde,” and “Innisfree” of Amorepacific,

and “TheFaceShop” of LG Household & Health Care) stand to benefit.

2) Global cosmetics brands suffering in China: China’s FMCG markets, including cosmetics,

have strong growth potential, but major foreign brands are suffering there. Foreign brands are

enjoying high market shares only for personal care products (brand reliability is crucial) and

FMCG products developed by foreign brands. In 2013, foreign brands gained 2~3% market

share YoY for hair care products in China’s personal care product market, while they lost 6%

in the skincare and make-up product markets.

III. Global cosmetics firms’ valuations (p.13)

Cosmetics (OverWeight)

Company Rating TP (won)

Amorepacific BUY (M) 2,900,000 (M)

AmoreG HOLD (M) 1,200,000 (M)

LGH&H BUY (M) 690,000 (M)

Cosmax BUY (M) 120,000 (M)

Korea Kolmar BUY (M) 67000 (M)

Korea’s annual cosmetics NX

-500

-250

0

250

2000 2005 2010

($mn) (+) Net exports in 2014

(1Q14~3Q14)

Source: Yuanta Securities

Korea’s monthly cosmetics NX

-50

-25

0

25

50

Jan-13 Jul-13 Jan-14 Jul-14

($mn)


Contents

l. 2015 Korean cosmetics market outlook

ll. Changes in China’s cosmetics market

lll. Global cosmetics companies’ valuation table

Cosmetics

2015 cosmetics sector outlook

2

Cosmetics

I. 2015 domestic cosmetics market outlook 1) Korea and overseas cosmetics market growth forecast

To forecast the Korean cosmetics market’s conditions for 2015, we estimated growth rates for the

Korean and Chinese cosmetics market,. China is Korea’s biggest cosmetics export destination,

with 22% of Korea’s export amount going to China (43% including Hong Kong). We compared the

growth rates of the cosmetics market and the GDPs of both Korea and China over the past 10

years. Cosmetics market growth outperformed GDP growth many times in both countries.

Considering the trading-down trend and growth of e-Commerce, as well as the emergence of

dermatologist treatments, the cosmetics market’s growth in both countries is likely to slightly

outpace GDP growth.

In conclusion, the domestic cosmetics market is forecast to grow by at least 5.0% in 2015 to reach

$10.8bn and the Chinese cosmetics market should grow by at least 8.0% to reach $51.6bn.

Korea’s cosmetics market growth forecast China’s cosmetics market growth forecast

Source: World Bank, Yuanta Securities Source: World Bank, Yuanta Securities

Korea’s cosmetics market value China’s cosmetics market value

Source: World Bank, Yuanta Securities Source: World Bank, Yuanta Securities

0

5

10

15

2000 2002 2004 2006 2008 2010 2012 2014F

($bn)

CAGR 6.3%

0

10

20

30

40

50

60

2000 2002 2004 2006 2008 2010 2012 2014F

($bn)

CAGR 12.0%

-5%

0%

5%

10%

15%

20%

2000 2002 2004 2006 2008 2010 2012 2014F

(YoY) Korea GDP YoY%Korea cosmetics market YoY%

5% growth expected in 2015

-5%

0%

5%

10%

15%

20%

2000 2002 2004 2006 2008 2010 2012 2014F

(YoY) China GDP YoY%China cosmetics market YoY%

8% growth expected in 2015

3

Sector Report

The global cosmetics market grew 5.2% YoY in 2013 to $432bn, and posted a CAGR of 5.2% over

the past 14 years, including 2008, when the global fiscal crisis took place. L’Oreal, the world’s

number-one cosmetics firm by sales, expects the value of the global cosmetics market to double

to $800bn over the next 10~15 years.

Global cosmetics market continuing to grow


Beauty and personal care market scale by country and population (2013)

Country Beauty and Personal care

market size ($mn)MS (%) Population (mn) % of total

1 United States 73,256 17.0% 316 4.4%

2 China (excl HK) 44,220 10.2% 1,357 19.1%

3 Brazil 42,953 9.9% 200 2.8%

4 Japan 39,051 9.0% 127 1.8%

5 Germany 19,051 4.4% 81 1.1%

6 France 16,798 3.9% 66 0.9%

7 Russia 14,177 3.3% 144 2.0%

8 Italy 12,168 2.8% 60 0.8%

9 South Korea 9,818 2.3% 50 0.7%

10 India 9,793 2.3% 1,252 17.6%

11 Spain 9,266 2.1% 47 0.7%

12 Thailand 4,884 1.1% 67 0.9%

13 Turkey 4,108 1.0% 75 1.1%

14 Indonesia 3,796 0.9% 250 3.5%

15 Vietnam 993 0.2% 90 1.3%

Top 15 countries 304,332 70.4% 4,182 58.7%

Other countries 127,686 29.6% 2,943 41.3%

Total 432,018 100.0% 7,125 100.0%


0

100

200

300

400

500

600

700

800

1999 2001 2003 2005 2007 2009 2011 2013 2015F 2017F 2019F 2021F 2023F

($bn)

CAGR +5.2%

$704bn

CAGR +5.0%

$432bn

4

Cosmetics

2) Chinese visitor growth and expectations for Korea’s duty-free shop growth

One of the major drivers of the Korean cosmetics sector’s growth in 2014 has been the marked

growth of duty-free cosmetics sales. Over 1Q14~3Q14, Amorepacific’s duty-free sales grew

102.2% YoY to W491.4bn, accounting for 25.7% of its domestic cosmetics sales. During the same

period, LG Household & Health Care’s duty-free cosmetics sales jumped 149.9% YoY to

W178.7bn, making up 15.9% of its domestic cosmetics sales.

The Chinese government implied that it would encourage its citizens to travel overseas from 2013

to ease yuan appreciation pressure. In 2014, the number of outbound Chinese travelers is forecast

at 114.23mn (+16.3.% YoY), of which 59.4mn (+37.3% YoY) are likely to visit Korea. With the

number of Chinese travelers to Korea likely to grow 30% YoY in 2015, duty-free cosmetics sales

should continue growing strongly.

Domestic duty-free stores are so busy with Chinese travelers that they have already reached their

limits in terms of sales capacity. However, existing duty-free stores plan to expand their store retail

space and the government is expected to grant more duty-free licenses. Thus, duty-free cosmetics

sales growth will likely continue to outpace Chinese traveler growth.

Among 17 domestic duty-free stores, most sales are generated in 10 downtown stores, six of

which are located in Seoul, two in Busan, and two in Jeju. The licenses for the remaining 7, newly

granted in 2012, are owned by SMEs and are located in provinces.

To meet demand from the rapid growth of Chinese visitors to Korea, the 10 downtown duty-free

stores are expected to expand their gross area by 42.8% by 2015. In addition, the government is

set to finalize its plan to allow more downtown duty-free stores in Seoul, Busan, and Jeju at end-

November, and grant three~six new licenses by end-2014.

Estimated number of China’s outbound travelers

No of Chinese outbound

travelers % YoY

China’s per-capita

GDP ($)

No of Chinese

travelers to Korea % YoY

Portion to

Korea (%)

2008 45,844,000 11.9% 3,424 1,167,891 9.3% 2.5

2009 47,656,000 4.0% 3,826 1,342,317 14.9% 2.8

2010 57,386,000 20.4% 4,437 1,875,157 39.7% 3.3

2011 70,250,000 22.4% 5,429 2,220,196 18.4% 3.2

2012 83,182,000 18.4% 6,194 2,836,892 27.8% 3.4

2013 98,190,000 18.0% 6,959 4,326,869 52.5% 4.4

2014E 114,230,000 16.3% 7,572 5,940,000 37.3% 5.2

2015E 127,650,000 11.7% 8,211 7,720,000 30.0% 6.0

2016E 140,140,000 9.8% 8,859 9,650,000 25.0% 6.9

2017E 154,330,000 10.1% 9,556 11,580,000 20.0% 7.5

2018E 170,100,000 10.2% 10,290 13,550,000 17.0% 8.0


5

Sector Report

Monthly Chinese travelers to Korea Quarterly Chinese travelers to Korea

Source: Yuanta Securities Source: Yuanta Securities

Korea’s 10 downtown duty-free stores’ floor expansion

Company Branch Before (m2) After (m2) Growth (%) Re-opening

Lotte Main 8,994 10,800 20.1% Jul 2014

Jamsil 4,327 10,990 154.0% Oct 2014

Busan 5,415 6,600 21.9% Sep 2014

Jeju 2,292 2,292 0.0%

COEX 4,726 4,726 0.0%

Shilla Jangchung 6,999 6,999 0.0%

Jeju 3,841 11,361 195.8% Sep 2014

Dongwha 5,116 5,116 0.0%

SK (Walkerhill) 3,762 9,000 139.2% Aug 2015

Shinsegae 6,921 6,921 0.0%

Total 52,393 74,805 42.8%


0

10

20

30

40

50

60

70

80

90

0

100

200

300

400

500

600

700

800

12.01 12.07 13.01 13.07 14.01 14.07

Chinese entrants to Korea (L)

Growth (R)('000) (% YoY)

-10

0

10

20

30

40

50

60

70

80

90

0

500

1,000

1,500

2,000

2,500

1Q05 1Q07 1Q09 1Q11 1Q13

Chinese entrants to Korea (L)Growth (R)

('000) (% YoY)

Chinese realestate bubble in

2007

Chinese real estate boom in

2010

Chinese real estate mkt recovery in

2013

6

Cosmetics

3) Korea’s cosmetics exports growing sharply

Korea’s cosmetics imports have stagnated at W1tn since 2012, while cosmetics exports have

grown about 20% YoY. Korea’s cosmetics trade balance (including perfume and personal care

products) should turn positive in 2014, given that net exports over 1Q~3Q14 came to $233mn.

Given the effect of China’s Singles’ Day (Nov 11), net exports should exceed $403mn in 2014.

Korea’s major cosmetics firms’ 1Q14~3Q14 exports:

Amorepacific: W578.5bn (+39.2% YoY)

LG Household & Health Care: W272.7bn (+13.6% YoY)

Korea’s cosmetics imports Korea’s cosmetics exports


Korea’s annual cosmetics trade balance Korea’s monthly cosmetics trade balance


-50

-25

0

25

50

2013/01 2013/07 2014/01 2014/07

($mn)

-500

-250

0

250

2000 2005 2010

($mn)Net exports turned positive in 2014

(1Q14~3Q!$)

-25

0

25

50

75

100

0

250

500

750

1,000

1,250

2000 2005 2010

Cosmetics imports (LSH)YoY (RHS)

($mn) (%)

1Q14~3Q14

-25

0

25

50

75

100

0

250

500

750

1,000

1,250

2000 2005 2010

Cosmetics exports (LHS)YoY (RHS)

($mn) (%)

1Q14~3Q14

7

Sector Report

Korea’s top 10 cosmetics export destinations


In the cosmetics market, new product launches are important. As Korean customers are famous

for being picky, the Korean market is regarded as one of the important test beds for global

cosmetics companies. When it comes to fast moving consumer goods (FMCG), it is known that

customers tend to choose a product from an entirely new product category. In other words, in the

cosmetics industry, a new product launches are likely to be more effective than improving existing

products. For example, after BB cream gained huge popularity in Korea, premium cosmetics

brands like Chanel also launched BB cream, and BB cream became a new make-up product

category in overseas markets. The trend-awareness of Korean consumers helps Korean

cosmetics firms and ODM/OEM companies fare well in overseas markets including China.

For FMCG goods, consumers tend to choose from entirely new product category


65

70

75

80

85

90

95

0

500

1,000

1,500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

China Hong Kong JapanUS Taiwan ThailandSingapore Vietnam MalaysiaRussia Top 10 % of total exports (R)

($mn) (%)

8

Cosmetics

II. Changes in China’s cosmetics market 1) Consumption tax likely to decline; benefits from Korea-China FTA

Chinese consumers think make-up products are not a luxury, rather than a necessity, with people

in small cities and rural areas more inclined to think this way. Thus, make-up products account for

just 6.9% of China’s cosmetics market, and the government imposes a 30% consumption tax on

make-up and functional products, because they are regarded as luxury goods. The government is

likely to re-categorize cosmetics products into low- to mid-end and high-end products and

abandon consumption taxes on low- to mid-end products in the future and Korea’s mass brands

(“Laneige,” “Mamonde,” and “Innisfree” of Amorepacific, and “TheFaceShop” of LG Household &

Health Care) stand to benefit.

Moreover, with the recent conclusion of a Korea-China free trade agreement, tariffs on cosmetics

(6% for skin care products, 8% for make-up products) are set to be lifted, which should benefit

Korean cosmetics firms with a high portion of exports to China (12% for Amorepacific).

Global cosmetics market, by product category (2013) China’s cosmetics market, by product category (2013)


China’s tariffs and consumption taxes on luxury goods

Consumption

taxTariff VAT Note

Cosmetics 30% 6.5~150% 17%

Tariff: 8% for skin care, 10% for make-up products

Consumption tax: 30% for functional and make-up products

Likely to re-categorize cosmetics products into low- to mid-

end and high-end products and abandon consumption

taxes on low- to mid-end products

Apparel 0% 14~130% 17%

Bag 0% 10~100% 17%

Jewelry/precious

metal 5~10% 0%~130% 17%

High-end watch 20% 11~100% 17%

Golf goods 10% 12~50% 17%


10%

21%

8%

16%

36%

9%

SkincareHaircareMake-upFragrancesHygiene productsOral cosmetics

48%

16%

7%

2%

17%

10%

SkincareHaircareMake-upFragrancesHygiene productsOral cosmetics

9

Sector Report

2) Global cosmetics brands suffering in China

China’s FMCG markets, including cosmetics, have strong growth potential, but major foreign

brands are suffering there. Indeed, foreign brands enjoy high market shares only for personal care

products (brand reliability is crucial) and FMCG products developed by foreign brands. In 2013,

foreign brands gained 2~3% market share YoY for hair care products in China’s personal care

product market, while they lost 6% in both the skincare and make-up markets.

At end-Dec 2013, Revlon, a US door-to-door cosmetics seller with a 2% China sales portion,

announced that it would withdraw from China completely, and Avon Products, another door-to-

door cosmetics seller, is also suffering. L’Oreal announced in early 2014 that it would withdraw

Garnier, its mass market hair care brand, from China. The prevailing view is that Garnier priced its

products too high although it is low- to mid-end brand, and failed to appeal to consumers, as their

products were sold at Supermarkets.

In Aug 2013, L’Oreal agreed to acquire Magic Holdings, China’s mass market cosmetics brand, for

HK$6.5bn ($840mn). Garnier and Magic’s brand positions overlap, which is another reason for

L’Oreal’s withdrawal of Garnier. Magic Holdings (annual sales $218mn, net profit $27mn as of Jun

2013) owns the MG brand, which has the highest market share in the facial mask market (2012

M/S 26%). L’Oreal Paris and Maybelline New York (L’Oreal brands) have maintained the highest

sales in China among all cosmetics brands and make-up brands, respectively.

In Jul 2013, L Capital Asia, the private equity arm of global luxury group LVMH, decided to invest in

Marubi, China’s premium cosmetics brand (2012 sales RMB3bn or $489mn). While details have

not been disclosed, L Capital Asia is estimated to have invested $100mn for a 49% stake. For

reference, LVMH owns Sephora, a French cosmetics store chain.

The above-mentioned global cosmetics brands are suffering in China, because consumers in tier-

1 cities: 1) began to prefer China’s local cosmetics brands, which better understand Chinese

consumers’ preferences and demands; and 2) are looking for cost-effective cosmetics products.

For example, the third-largest and fastest-growing product category in China is facial masks,

whose annual sales rose 32% YoY to $799mn (as of Sep 2013). China’s facial mask market has

grown steeply since 2012, as many low-priced new products were launched. Chinese consumers

believe facial masks protect their skin from going dry and make their skin silky. Fan Bingbing, a

famous Chinese actress, said in many media interviews that she uses two facial masks a day, and

there were even pictures taken of her wearing a facial mask outdoors. The facial mask case shows

how different Chinese women’s beauty routines are from western women’s.

10

Cosmetics

Chinese and foreign brands’ portion in China’s FMCG market, by product category (2013)


Foreign brands’ Chinese FMCG market share (2013)


11

Sector Report

While global cosmetics brands are losing market share in China, Korean cosmetics brands are

growing fast on the back of the Korean Wave. L’Oreal saw the highest market share gains in

China’s cosmetics market over the past 10 years, but Nu Skin of the US and Amorepacific of

Korea saw the highest market share increases over the last year. However, Nu Skin’s market

share has fluctuated greatly.

Cosmetics market share in China

Company 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Chg

(2004~2013)

Chg

(2012~2013)

1 Procter & Gamble Co 15.0 17.3 17.3 16.9 15.9 15.3 14.9 14.5 14.1 13.5 -1.5 -0.6

2 L'Oréal Groupe 4.9 5.3 5.7 6.5 7.3 7.8 8.4 8.7 8.9 9.1 4.2 0.2

3 Unilever Group 4.5 4.2 3.8 3.4 3.6 3.5 3.5 3.6 3.7 3.7 -0.8 0.0

4 Shiseido Co Ltd 2.4 2.5 3.1 3.5 3.7 3.9 4.2 4.3 3.9 3.6 1.2 -0.3

5 Mary Kay Inc 1.2 1.6 1.7 1.8 1.9 2.3 2.5 2.5 2.6 2.8 1.6 0.2

6 Colgate-Palmolive Co 3.5 3.2 3.1 2.9 2.8 2.8 2.8 2.7 2.8 2.8 -0.7 0.0

7 Amway Corp 4.1 3.6 3.0 2.9 3.3 3.4 3.1 3.1 2.8 2.7 -1.4 -0.1

8 Beiersdorf AG 0.5 0.6 0.8 2.4 2.6 2.6 2.6 2.5 2.4 2.4 1.9 0.0

9 Johnson & Johnson Inc 1.7 1.7 1.7 1.7 2.4 2.2 2.1 2.0 2.0 2.0 0.3 0.0

10 Estée Lauder Cos Inc 0.3 0.5 0.6 0.8 1.0 1.1 1.3 1.6 1.8 1.9 1.6 0.1

11 Shanghai Jahwa United Co Ltd 1.0 1.0 1.1 1.1 1.4 1.4 1.5 1.6 1.7 1.8 0.8 0.1

12 Jala (Group) Co Ltd 0.1 0.2 0.3 0.4 0.7 1.0 1.1 1.3 1.4 1.5 1.4 0.1

13 Nu Skin Enterprises Inc 0.9 0.7 0.4 0.3 0.2 0.2 0.2 0.3 0.5 1.4 0.5 0.9

14 AmorePacific Corp 0.1 0.3 0.5 0.5 0.5 0.6 0.7 0.8 0.9 1.2 1.1 0.3

15 Jiangsu Longliqi Group Co Ltd 1.0 1.0 1.2 1.2 1.3 1.3 1.3 1.2 1.2 1.2 0.2 0.0

16 LVMH Moët Hennessy Louis Vuitton SA 0.5 0.6 0.7 0.8 0.9 0.9 1.0 1.1 1.1 1.1 0.6 0.0

17 Shanghai Inoherb Cosmetics Co Ltd 0.0 0.1 0.1 0.2 0.3 0.3 0.5 0.8 1.1 1.1 1.1 0.0

18 Henkel AG & Co KGaA 0.7 0.6 0.7 0.6 0.5 0.5 0.7 0.9 1.0 1.0 0.3 0.0

19 Yunnan Baiyao Group Co Ltd - 0.1 0.1 0.1 0.2 0.4 0.5 0.6 0.8 1.0 1.0 0.2

20 Guangdong Marubi Biotechnology Co Ltd - - - 0.1 0.3 0.4 0.6 0.7 0.8 0.9 0.9 0.1

21 Kao Corp 1.2 1.0 1.1 1.1 1.1 1.0 0.9 0.8 0.7 0.7 -0.5 0.0

22 Magic Holdings International Ltd - 0.0 0.0 0.1 0.2 0.3 0.4 0.6 0.6 0.7 0.7 0.1

23 Prince Frog International Holdings Ltd - - - - - - - 0.5 0.5 0.6 0.6 0.1

24 Chanel SA 0.1 0.2 0.2 0.3 0.3 0.4 0.5 0.6 0.6 0.6 0.5 0.0

25 Proya Cosmetics Co Ltd 0.0 0.0 0.1 0.1 0.2 0.3 0.4 0.5 0.6 0.6 0.6 0.0

Others 56.3 53.7 52.7 50.3 47.4 46.1 44.3 42.2 41.5 40.1 -16.2 -1.4

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0


12

Cosmetics

In the cosmetics market, more than 75% of new brands/products fail. The main reason is their

failure to differentiate themselves from existing products. For the past 10 years, the sales ranking

of the top 20 global cosmetics firms has remained almost unchanged. Since 2004, Amorepacific of

Korea and Natura Cosmeticos of Brazil are the only companies whose rankings have changed

significantly among the top 20 global brands. In South America, door-to-door is the largest

cosmetics distribution channel, and Natura Cosmeticos, the largest cosmetics firm in Brazil (Brazil

market share 12.4% in 2013) has 1.66mn door-to-door sales agents. With Amorepacific’s global

ranking rising sharply over the past 10 years, we believe it will become a major global name.

Top 20 global cosmetics companies

2004 2008 2013Ranking change

(2004~2013)Note

L’oréal 1 1 1 0

Unilever 3 3 2 1

Procter & Gamble Co. 2 2 3 -1

The Estée Lauder 5 4 4 1

Shiseido 4 7 5 -1

Avon Products 6 5 6 0

Beiersdorf 7 6 7 0

Johnson & Johnson 8 8 8 0

Chanel 13 10 9 4

Kao 10 9 10 0

Lvmh Moët Hennessy Louis Vuitton 12 11 11 1

Coty 16 12 12 4

Henkel 14 13 13 1

L Brands 11 17 14 -3

Mary Kay 18 15 15 3

Colgate Palmolive 15 35 16 -1

Amorepacific 25 20 17

8Korea’s largest cosmetics firm; exports to Asia

Pasific rising

Natura Cosméticos 31 14 18

13Brazil’s largest cosmetics firm with 1.66mn door-to-

door sales agents

Alticor 21 19 19 2

Groupe Yves Rocher 17 16 20 -3


13

Sector Report

III. Cosmetics firms’ valuations

Cosmetics firms’ valuation table (2014E) ($mn)

Mkt

cap Sales OP NP

OPM

(%)

Sales

(% YoY)

OP

(% YoY)

ROE

(%)

2014E

P/E

2015E

P/E P/B

EV/

EBITDA

Price

(% YTD)

Market

YTD%

Global cosmetic companies

Procter & Gamble Co/The 238,08 84,020 15,867 12,142 18.9 -1.3 4.4 17.3 21.0 20.2 3.7 13.7 8.2 6.4

Unilever NV 119,78 60,916 8,974 5,913 14.7 -7.9 -10.1 31.0 19.7 18.2 6.4 11.1 7.2 2.5

L'Oreal SA 92,268 28,084 4,840 3,877 17.2 -8.0 -6.0 14.5 24.7 22.0 3.5 15.9 3.1 -2.2

Estee Lauder Cos Inc/The 27,078 10,888 1,781 1,200 16.4 7.7 19.8 33.7 23.4 24.6 7.2 13.4 -5.3 6.4

Beiersdorf AG 21,303 7,797 1,050 708 13.5 -4.4 -5.9 15.6 26.9 24.5 4.8 15.6 -8.3 -3.1

Kao Corp 19,968 11,988 1,166 675 9.7 -11.2 -8.9 12.1 28.8 25.0 3.7 10.3 36.0 7.4

Amorepacific Corp 11,804 3,441 509 369 14.8 21.4 50.6 14.8 33.7 27.4 4.6 20.6 122.4 -3.3

LG Household & Health Care 8,366 4,220 462 318 10.9 6.7 1.8 22.2 27.4 23.3 5.5 13.9 7.7 -3.3

Coty Inc 6,812 4,571 509 327 11.1 -2.1 -93.5 25.4 23.0 22.2 9.9 30.9 27.1 6.4

Shiseido Co Ltd 6,094 7,376 467 228 6.3 -7.2 57.3 8.1 29.2 21.2 2.1 9.5 4.8 7.4

Avon Products Inc 4,377 8,948 625 358 7.0 -10.1 46.4 27.5 12.2 11.4 4.8 17.9 -41.5 6.4

L'Occitane International SA 3,436 1,460 172 137 11.8 5.2 -12.9 12.9 27.3 23.5 3.6 13.1 9.3 3.4

Nu Skin Enterprises Inc 2,336 2,562 389 242 15.2 -19.4 -29.8 25.2 9.6 9.5 2.5 5.3 -71.5 6.4

Kose Corp 2,305 1,802 168 101 9.3 -8.1 31.7 9.1 24.5 23.5 2.0 9.1 32.5 7.4

Pola Orbis Holdings Inc 2,038 1,744 156 81 9.0 -11.2 -5.0 5.3 25.0 20.6 1.3 8.5 10.3 7.4

Fancl Corp 832 782 31 12 3.9 -19.2 -15.7 1.6 79.9 41.8 1.3 - 30.6 7.4

Avrg. 13.3 -3.7 1.9 17.2 26.4 21.9 4.1 13.6 10.8 3.7

Chinese cosmetic companies

Shanghai Jahwa United Co 4,073 866 177 158 20.4 19.2 44.6 24.6 25.6 20.9 6.6 - -12.0 17.1

Jumei International Holding 3,462 688 82 76 11.9 - 114.5 23.5 43.5 24.7 32.7 - - 6.4

Avrg. 19.2 79.6 24.1 34.6 22.8 19.7 - -12.0 11.8

Avrg. -2.5 9.6 17.9 27.2 22.0 5.6 13.6 9.6 4.5

Note: As of Nov 14, 2014 Source: Thomson, Yuanta Securities

Domestic cosmetic firms’ valuation table (2014E) (Wbn)

Mkt cap Sales OP NP OPM

(%)

Sales

(% YoY)

OP

(% YoY)

NP

(% YoY)

ROE

(%)

2014E

P/E (x)

2015E

P/E (x)

P/B

(x)

Returns

(% YTD)

AmorePacific 14,149 3,780 566 409 15.0 21.9 52.9 52.6 15.0 37.5 30.5 5.3 124.7

LG Life Science 9,792 4,625 504 348 10.9 6.9 1.6 -2.7 22.6 30.1 25.6 6.0 9.3

AmoreG 9,331 4,623 671 248 14.5 18.7 42.8 52.4 11.0 40.4 35.0 3.9 142.8

Korea Kolmar 1,127 455 42 31 9.2 61.2 112.5 123.3 24.5 34.0 29.8 7.9 94.9

Cosmax 864 355 32 22 8.9 - - - 22.4 40.0 28.5 8.9 -

Able C&C 290 461 -6 4 -1.2 4.1 TTR -69.1 2.3 74.4 14.9 1.7 -26.1

Average 22.6 52.4 31.3 16.3 42.7 27.4 5.6 69.1

Note: TTR = Turn to Red, as of Nov, 14, 2014

Source: DataGuide, Yuanta Securities

14

Cosmetics

Procter & Gamble P/E band (12-month forward) Unilever P/E band (12-month forward)

0

20

40

60

80

100

120

2001 2003 2005 2007 2009 2011 2013

price 12x 15x 18x 21x 24x(USD)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2001 2003 2005 2007 2009 2011 2013

price 9x 12x 15x 18x 21x(EUR)

Source: Datastream, Yuanta Securities Source: Datastream, Yuanta Securities

L’Oreal P/E band (12-month forward) Estee Lauder P/E band (12-month forward)

0

40

80

120

160

200

2001 2003 2005 2007 2009 2011 2013


0

20

40

60

80

100

2001 2003 2005 2007 2009 2011 2013



Beiersdorf P/E band (12-month forward) Kao P/E band (12-month forward)

0

20

40

60

80

100

120

2001 2003 2005 2007 2009 2011 2013


0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2001 2003 2005 2007 2009 2011 2013

price 15x 20x 25x 30x 35x(JPY)


15

Sector Report

AmorePacific P/E band (12-month forward) LG Household & Healthcare Band (12-month forward)

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2006 2008 2010 2012 2014

price 12x 18x 24x 30x 36x(KRW)

0

200,000

400,000

600,000

800,000

1,000,000

2001 2003 2005 2007 2009 2011 2013

price 6x 13x 20x 27x 34x(KRW)


Coty P/E band (12-month forward) Shiseido P/E band (12-month forward)

0

5

10

15

20

25

'13‐07 '13‐10 '14‐01 '14‐04 '14‐07 '14‐10


0

1,000

2,000

3,000

4,000

5,000

2001 2003 2005 2007 2009 2011 2013



Avon P/E band (12-month forward) L’Occitane P/E band (12-month forward)

0

10

20

30

40

50

60

70

80

2001 2003 2005 2007 2009 2011 2013


0

0.5

1

1.5

2

2.5

3

3.5

2010 2011 2012 2013 2014



16

Cosmetics

Nu Skin P/E band (12-month forward) Kose P/E band (12-month forward)

0

40

80

120

160

200

2001 2003 2005 2007 2009 2011 2013


0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2001 2003 2005 2007 2009 2011 2013



Pola Orbis Holdings P/E band (12-month forward) Fancl P/E band (12-month forward)

0

1,000

2,000

3,000

4,000

5,000

2011 2012 2013 2014


0

1,000

2,000

3,000

4,000

5,000

6,000

2001 2003 2005 2007 2009 2011 2013



Shanghai Jahwa P/E band (12-month forward) Jumei P/E band (12-month forward)

0

20

40

60

80

100

2001 2003 2005 2007 2009 2011 2013

price 18x 26x 34x 42x 50x(CNY)

0

20

40

60

'14‐05 '14‐06 '14‐07 '14‐08 '14‐09 '14‐10 '14‐11



17

Sector Report

Cosmetics distribution channel, by country

USA (%)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Parapharmacies/Drugstores (↑) 13.5 13.5 13.5 14.0 14.0 14.4 14.7 15.2 15.4 15.7

Mass merchandisers (↓) 17.1 15.9 15.2 14.6 14.6 14.5 14.1 14.0 14.3 14.2

Department stores 15.0 15.1 14.8 14.5 13.9 13.2 13.4 13.8 14.0 14.1

Hypermarkets (↑) 8.2 9.3 10.5 11.2 11.9 12.7 12.9 12.8 12.7 12.7

Supermarkets 12.9 12.8 12.4 12.0 12.0 11.7 11.7 11.3 11.2 11.1

Beauty specialist retailers 6.2 6.3 6.3 6.4 6.5 6.6 6.6 6.8 6.9 7.1

Direct selling (↓) 9.0 8.6 8.4 8.2 8.1 7.9 7.5 7.1 6.7 6.4

Internet retailing (↑) 2.6 3.2 3.7 4.3 4.7 5.0 5.3 5.6 5.9 6.1

Hair salons 4.0 3.9 3.8 3.6 3.4 3.1 3.1 3.1 3.0 3.1

Warehouse clubs 3.5 3.6 3.6 3.7 3.7 3.6 3.6 3.3 2.9 2.8

Homeshopping 3.2 3.3 3.4 3.3 3.2 3.2 3.0 3.0 2.8 2.7

Variety stores 0.8 0.8 0.8 0.8 0.9 1.0 1.0 1.1 1.2 1.2

Other BPC non-grocery retailers 1.1 0.9 0.9 0.9 0.8 0.8 0.8 0.8 0.9 0.9

Apparel specialist retailers 0.9 0.8 0.8 0.8 0.7 0.7 0.6 0.6 0.6 0.6

Independent small grocers 0.7 0.7 0.6 0.6 0.5 0.5 0.5 0.5 0.4 0.4

Other grocery retailers 0.4 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.4 0.4

Convenience stores 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2

Chemists/Pharmacies 0.4 0.3 0.3 0.3 0.3 0.2 0.2 0.2 0.2 0.2

Electronics and appliance specialist retailers 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0


China (%)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Hypermarkets 23.4 25.8 27.5 27.8 27.7 27.8 27.2 25.4 25.1 23.9

Department stores (↓) 33.4 32.0 31.3 31.1 30.9 30.8 30.2 27.5 23.4 22.2


Direct selling (↓) 15.4 12.9 10.9 10.4 10.2 10.1 10.4 12.3 12.0 12.4

Beauty specialist retailers (↑) 4.6 5.0 5.7 6.2 7.2 7.5 7.9 8.1 8.3 8.5

Supermarkets 7.0 8.3 8.7 9.2 9.4 9.3 9.0 8.6 8.3 7.6


Independent small grocers (↓) 8.8 7.7 6.5 5.9 5.0 4.3 3.2 2.9 2.3 1.7

Other non-grocery retailers 0.4 0.4 0.5 0.5 0.5 0.7 0.8 0.9 1.0 1.0

Convenience Stores 0.9 1.0 0.9 0.9 0.9 0.9 0.9 1.0 0.9 0.7

Homeshopping 0.9 1.0 0.8 0.7 0.6 0.6 0.6 0.6 0.6 0.6


Non-retail channels 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1

Hair salons 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0


18

Cosmetics

Hong Kong, China (%)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Beauty specialist retailers (↑) 26.6 27.0 27.2 27.7 28.4 29.1 31.3 36.7 39.6 40.8


Parapharmacies/Drugstores (↓) 22.5 22.3 22.0 21.5 21.3 21.3 20.5 18.9 18.0 17.3

Supermarkets 13.9 13.8 13.8 13.7 13.7 13.7 13.3 13.1 13.0 12.9

Direct selling 4.7 4.3 4.5 4.5 4.4 4.5 4.9 4.9 4.9 4.9

Hair salons 2.5 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.3 2.3



Internet retailing 0.1 0.1 0.2 0.2 0.3 0.3 0.3 0.4 0.4 0.4


Variety stores 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.3


Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0


Brazil (%)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Direct selling (↑) 28.3 28.2 27.7 27.3 26.7 26.3 31.3 36.7 39.6 40.8

Supermarkets (↓) 24.3 24.4 24.1 23.9 24.0 24.2 23.4 20.1 18.2 18.3


Parapharmacies/Drugstores (↓) 14.5 14.9 15.1 15.4 15.8 16.2 13.3 13.1 13.0 12.9

Hypermarkets (↓) 12.6 12.0 11.4 11.1 10.9 10.7 4.9 4.9 4.9 4.9




Outdoor markets 0.5 0.5 0.4 0.5 0.5 0.5 0.3 0.4 0.4 0.4

Discounters 0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.4 0.3 0.3


Hair salons 0.0 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0


19

Sector Report

Japan (%)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Parapharmacies/drugstores (↑) 22.4 22.5 22.9 23.2 23.4 23.7 24.1 24.6 25.1 25.5


Supermarkets 12.9 13.0 12.9 12.8 12.8 13.0 12.9 13.0 13.1 13.2




Chemists/Pharmacies (↓) 8.0 7.9 7.9 7.9 7.9 8.1 7.8 7.4 7.2 6.9

Direct selling (↓) 6.4 6.0 5.9 5.8 5.6 5.4 5.3 5.2 5.2 5.1

Mass merchandisers 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.9 2.9 3.1

Homeshopping 2.3 2.1 1.9 1.8 1.8 1.8 1.7 1.7 1.7 1.7

Furniture and homewares stores 1.3 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.4

Variety stores 0.9 0.9 0.9 0.8 0.8 0.8 0.8 0.8 0.9 0.9



Hair salons 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.6 0.6


Other BPC health and beauty specialist retailers 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

France (%)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Hypermarkets (↑) 23.7 24.1 24.5 24.5 24.5 24.5 24.6 24.5 24.6 24.7


Supermarkets (↓) 21.2 20.3 19.2 18.5 18.3 18.4 18.4 18.4 18.5 18.5

Chemists/Pharmacies (↑) 10.4 10.8 11.0 11.2 11.4 11.4 11.5 11.5 11.5 11.6



Parapharmacies/Drugstores 3.5 3.6 3.7 3.7 3.8 3.8 3.8 3.9 3.9 3.9

Direct selling 2.1 2.0 2.1 2.1 2.1 2.0 2.1 2.2 2.2 2.2

Discounters 1.9 2.1 2.0 1.9 1.9 2.0 1.9 1.9 1.9 1.9

Homeshopping (↓) 3.5 3.1 2.9 2.6 2.4 2.3 2.1 1.9 1.8 1.6

Variety stores 1.5 1.5 1.4 1.5 1.4 1.4 1.4 1.3 1.3 1.2




Other grocery retailers 0.7 0.5 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4

Hair salons 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.3 0.3 0.3

Forecourt retailers 0.4 0.4 0.4 0.4 0.3 0.3 0.3 0.2 0.2 0.2

Other non-grocery retailers 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1

Outdoor markets 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0


20

Cosmetics

Korea (%)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Direct selling (↓) 24.5 23.4 23.3 23.5 24.1 24.0 23.7 23.6 23.4 22.1

Beauty specialist retailers(↓) 21.9 21.0 20.2 19.7 19.2 19.1 19.1 19.3 19.7 20.5

Department stores (↑) 14.8 14.4 14.5 15.0 15.2 15.3 15.5 15.9 15.9 15.9

Hypermarkets 13.2 14.2 14.7 14.6 14.5 14.6 14.9 14.4 14.0 13.8


Supermarkets (↓) 7.4 7.6 7.2 6.8 6.5 6.3 6.0 5.9 5.8 5.5

Homeshopping (↑) 2.9 3.9 4.1 4.3 4.4 4.5 4.6 4.7 4.7 4.9


Independent small grocers (↓) 4.2 4.2 4.0 3.7 3.3 3.1 2.9 2.8 2.7 2.5




Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

21

Sector Report

Cosmetics net exports, by country (fragrance, cosmetics, and toiletries)

USA: cosmetics net exports China: cosmetics net exports


Brazil: cosmetics net exports Japan: cosmetics net exports


Germany: cosmetics net exports France: cosmetics net exports


-1,000

-500

0

500

1,000

1,500

2001 2003 2005 2007 2009 2011 2013

United States($mn)

0

200

400

600

800

1,000

1,200

1,400

2001 2003 2005 2007 2009 2011 2013

China

($mn)

-400

-300

-200

-100

0

100

200

300

2001 2003 2005 2007 2009 2011 2013

Brazil

($mn)

-1,800

-1,600

-1,400

-1,200

-1,000

-800

-600

-400

-200

0

2001 2003 2005 2007 2009 2011 2013

Japan

($mn)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2001 2003 2005 2007 2009 2011 2013

Germany

($mn)

0

2,000

4,000

6,000

8,000

10,000

12,000

2001 2003 2005 2007 2009 2011 2013

France

($mn)

22

Cosmetics

Russia: cosmetics net exports Italy: cosmetics net exports


South Korea: cosmetics net exports India: cosmetics net exports


Thailand: cosmetics net exports Turkey: cosmetics net exports


-4,000

-3,500

-3,000

-2,500

-2,000

-1,500

-1,000

-500

0

2001 2003 2005 2007 2009 2011 2013

Russia

($mn)

0

200

400

600

800

1,000

1,200

1,400

2001 2003 2005 2007 2009 2011 2013

Italy

($mn)

-800

-700

-600

-500

-400

-300

-200

-100

0

2001 2003 2005 2007 2009 2011 2013

South Korea

($mn)

0

200

400

600

800

1,000

1,200

2001 2003 2005 2007 2009 2011 2013

India

($mn)

0

100

200

300

400

500

600

700

800

900

1,000

2001 2003 2005 2007 2009 2011 2013

Thailand

($mn)

-600

-500

-400

-300

-200

-100

0

2001 2003 2005 2007 2009 2011 2013

Turkey

($mn)

23

Sector Report

Single-brand shop market in Korea (Top 9 brands)

Note: TheFaceShop, Missha, Etude House, Innisfree, SkinFood, Tonymoly, Nature Repulbilc, The Saem, It's Skin

Source: Company data, Yuanta Securities

Cosmetics OEM/ODM market in Korea (top 6 companies)

Source: Company data, Yuanta Securities

Single-brand shop market share (top 9 companies, 2013) Cosmetics OEM/ODM market share (top 10 companies, 2013)


0%

10%

20%

30%

40%

0

300

600

900

2007 2008 2009 2010 2011 2012 2013

Korea Kolmar Cosmax CosvisionIpeeres Cosmecca Korea EvercosYoY (R)

(Wbn)

TheFaceShop23%

Able C&C19%

Etude House16%

Innisfree 15%

Skin Food8%

Tonymoly8%

Nature Republic

8%

It's Skin2%

The Saem1%

Korea Kolmar28%

Cosmax 29%

Cosvision11%

Ipeeres8%

Cosmecca Korea

7%

Evercos6%Hankook

Cosmetics Manufacturing

4%

Genicos3%

LCC2%

UCL2%

0%

10%

20%

30%

40%

50%

0

200

400

600

800

1,000

1,200

1,400

1,600

2007 2008 2009 2010 2011 2012 2013

TheFaceShop (LGH&H) Missha (Able C&C) Etude (AmoreG)

Innisfree (AmoreG) Others Growth (R)(Wbn) (% YoY)

24

Cosmetics

Earnings of major cosmetic single-brand shops (Wbn)

2010 2011 2012 2013

The Face Shop Sales 29 32 43 49

Chg (% YoY) 12.4 9.9 34.4 15.1

Operating profit 5 5 8 9

OPM (%) 17.4 16.1 18.1 17.2

Able C&C Sales 24 31 43 40

Chg (% YoY) 34.2 25.7 39.1 -5.6


OPM (%) 11.8 10.9 12.2 1.3

Etude House Sales 16 22 28 34

Chg (% YoY) 40.9 32.9 30.5 20.2


OPM (%) 9.2 9.1 8.4 7.7

Innisfree Sales 8 14 23 33

Chg (% YoY) NA 69.4 63.5 45


OPM (%) 7.8 13.5 15.8 15

Skinfood Sales 16 18 18 17

Chg (% YoY) 7.7 9.9 34.4 15.1


OPM (%) 8.8 7.8 5.6 1.7

Tony Moly Sales 6 10 15 17

Chg (% YoY) 182.9 78.8 48.5 13.1


OPM (%) 4.2 12.6 10 11.4

Nature Republic Sales 5 9 13 17

Chg (% YoY) 141.4 91 41.6 33.7

Operating profit -1 1 0 0

OPM (%) -10.7 6 -3.4 -0.3

The SAEM Sales 1 2 4 3

International Chg (% YoY) NA 350 66.7 -3.8

Operating profit -1 -2 -1 -1

OPM (%) -280.4 -71.5 -27.8 -31.9

It’s Skin Sales 1 2 3 5

Chg (% YoY) 20 79.8 41.3 66.8

Operating profit 0 0 1

OPM (%) -5.8 8.8 16.4

Total Sales 106 139 189 217

Chg (% YoY) 40.6 31 35.8 14.5


OPM (%) 9.3 10 10.7 8.6


25

Sector Report

Amorepacific ratings and target price history

Date Rating TP (won)

2014/11/20 BUY 2,900,000

2014/11/11 BUY 2,900,000

2014/10/29 BUY 2,700,000

2014/10/06 BUY 2,700,000

2014/09/23 BUY 2,700,000


AmoreG ratings and target price history


2014/11/20 HOLD 1,200,000

2014/11/11 HOLD 1,200,000

2014/10/29 BUY 1,200,000

2014/10/16 BUY 1,200,000

2014/10/06 BUY 1,200,000

2014/09/23 BUY 1,200,000


LGH&H ratings and target price history


2014/11/20 BUY 690,000

2014/10/29 BUY 690,000

2014/10/23 BUY 690,000

2014/10/06 BUY 610,000

2014/09/23 BUY 610,000


0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

Nov-12 May-13 Nov-13 May-14 Nov-14

Current PriceTarget Price

(won)

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000



(won)

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000



(won)

26

Cosmetics

Cosmax ratings and target price history

Date Ratings TP (won)

2014/11/20 BUY 120,000

2014/11/17 BUY 120,000

2014/10/29 BUY 134,000

2014/10/06 BUY 134,000

2014/09/23 BUY 134,000

Source: Yuanta Securities Korea Kolmar ratings and target price history

Date Ratings TP (won)

2014/11/26 BUY 69,000

2014/11/20 BUY 67,000

2014/10/29 BUY 67,000

2014/10/06 BUY 67,000

2014/09/23 BUY 67,000


Disclosures & disclaimers This research report has been prepared for informational purposes only; it does not constitute an offer or a solicitation of an offer to buy or sell any securities or other financial instruments. The information and data contained in this report have been obtained from sources we consider reliable; however, we make no representation that the information provided in this report is accurate or complete, and it should not be relied on as such. The recipient of this report should use his/her independent judgment regarding the sale or purchase of any securities or financial instruments mentioned herein. We disclaim any liability whatsoever for any direct or consequential loss arising from any use of this report or its contents. This report is for our clients only. It is copyrighted material and may not be reproduced, transmitted, quoted, or distributed in any manner without the prior written consent of Yuanta Securities Korea Co., Ltd.

As of the publication date of this report, Yuanta Securities Korea Co., Ltd. does not own a stake in excess of 1%, nor does it have any interest whatsoever, in the subject company (ies). The material contained herein was not disclosed by Yuanta Securities Korea Co., Ltd. to any institutional investors or third parties prior to its publication. The analyst (s) of this report or the analyst (s)’ spouse does not have any financial interest in the securities of the subject company (ies) mentioned herein, nor financial interest of any nature related to the subject company (ies) (including without limitation, whether it consists of any option, right, warrant, future, long or short position), as of the publication date of this report.

Analyst certification I/We, as the research analyst/analysts who prepared this research report, do hereby certify that the views expressed in this report accurately reflect my/our personal views about the subject securities discussed in this report.

Stock and sector ratings Stock ratings include an Investment Rating (Strong Buy, Buy, Hold, Sell) based on the expected absolute return of a stock over

the next 6 -12 months. - Strong Buy: Expected to return 30% or more - Buy: Expected to return between 10% and 30% - Hold: Expected to return between -10 and +10%

- Sell: Expected to return -10% or less

Sector ratings suggest 6 to 12 - month forward investment weighting of a given sector compared to its market capitalization weighting.

- Overweight: Investment weighting is higher than the market capitalization weighting - Neutral: Investment weighting is equal to the market capitalization weighting - Underweight: Investment weighting is lower than the market capitalization weighting

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

Apr-14 Oct-14


(won)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000



(won)

27

Sector Report

Yuanta Securities (Korea) International Network

Research Center

Yuanta Securities Building

Euljiro 76 Jung-gu

Seoul, Korea 100-845

Tel: +822 3770 3454

Seoul

Head Office

Yuanta Securities Building

Euljiro 76 Jung-gu

Seoul, Korea 100-845

Tel: +822 3770 3454

Hong Kong

TONGYANG Securities Hong Kong Limited

#2107, 21F, Hutchison House, 10 Harcourt Road,

Central, Hong Kong

Tel: +852 3980 6000

Ho Chi Minh

TYS Ho Chi Minh Representative Office

#1104, 11th Floor, 45 Vo Thi Sau Street,

Dakao Ward., District 1, Ho Chi Minh City, Vietnam

Tel: +84 8 3820 5015

Manila

TONGYANG Savings Bank

Ground Floor Chatham House 116 Valero cor. V.A.

Rufino streets, Salcedo Village, Makati City Metro

Manila, Philippines

Tel: +63 2 845 3838

Phnom Penh

TONGYANG Securities (Cambodia) Plc.

#138, 2nd Floor, Paragon Bldg, Norodom Blvd,

Phnom Penh, Cambodia

Tel: +855 23 224 125

28

Cosmetics

141202 Cosmetics finalfile.myasset.com/sitemanager/upload/2014/1202/18240446/... · 2014. 12....

Documents

Transcript of 141202 Cosmetics finalfile.myasset.com/sitemanager/upload/2014/1202/18240446/... · 2014. 12....