Core Insights - The South Korean beauty market is undergoing significant changes, with the rapid rise of new players like APR, which has seen its stock price soar by 200% this year, surpassing established giants like LG Household & Health Care and Amorepacific in market capitalization [1][3][4] - Traditional beauty companies such as LG Household & Health Care and Aekyung are facing severe challenges, including declining profits and the need to sell assets or repay debts [3][4][10] - The overall competitive landscape in the Korean beauty industry is shifting, with new entrants gaining market share while established companies struggle [4][44] Group 1: Performance of Established Companies - LG Household & Health Care's beauty segment has seen a dramatic profit drop of 70%, with overall revenue down by 5.3% year-on-year [10][12][13] - Aekyung's revenue decreased by 5.9%, with a nearly 50% drop in operating profit, indicating a significant decline in performance [13][23] - Amorepacific reported a 5.2% increase in domestic sales, contrasting with APR's 7.5% decline in the same market [9][16] Group 2: Performance of New Entrants - APR's revenue from cosmetics and beauty surged by 186.1%, with a notable increase in operating profit by 149.4% year-on-year [18][19] - APR's market capitalization has reached approximately 87501.33 billion KRW (about 452.64 billion RMB), making it the top company in the Korean beauty sector [1][4] - The company has also reported significant growth in international markets, with sales in North America and Japan increasing by 236.3% and 280.9%, respectively [5][37] Group 3: Market Trends and Challenges - The Korean beauty market is experiencing a shift, with established brands losing ground to smaller, innovative companies that are gaining traction [44] - Despite challenges in the domestic market, some companies like Amorepacific are seeing growth in international markets, particularly in North America and Japan [37][40] - The overall export of Korean beauty products to China has declined by 10.8%, highlighting the need for strategic adjustments in overseas markets [34][33] Group 4: Strategic Adjustments - Companies are adjusting their strategies in response to market conditions, with Amorepacific focusing on e-commerce and reducing physical store presence in China [31][29] - LG Household & Health Care and Aekyung are also exploring online channels to boost sales, indicating a broader trend towards digital transformation in the industry [31][33] - The competitive landscape is expected to continue evolving, with new entrants likely to challenge established players further [44]

爱茉莉太平洋中国去年经历了高层的变动调整。2024年4月，爱茉莉太平洋集团任命朴泰镐（Taeho Park）为爱茉莉太平洋中国总裁，接替前总裁黄永慜（Mike Hwang）全面负责中国区业务的发展与管 理。公开资料显示，朴泰镐拥有超过24年的集团内部工作经验。 爱茉莉太平洋称，期待朴泰镐继续发挥出色的领导才能和丰富的管理经验，推动爱茉莉太平洋的中国事 业迈向新的发展阶段。 记者注意到，朴泰镐上任后推动了一系列新的市场策略，比如去年引入了高端护肤品牌AP嫒彬，并于 上海久光开设中国首店。这也是该集团时隔多年后在中国市场引入的首个的护肤品牌。 相较于其他的国际美妆巨头，爱茉莉太平洋近些年在中国市场较为"沉寂"，鲜有新的大动作。但近期记 者注意到该公司将旗下护肤品牌AESTURA瑷丝特兰（下称"瑷丝特兰"）引入中国市场。 公司方面向记者表示，瑷丝特兰主打敏感肌细分类市场。目前品牌在中国市场的规划以线上销售为主。 在2025年11月的中国国际进口博览会中，瑷丝特兰将随集团参展，首次线下亮相。 近年来，中国敏感肌肤人群护肤需求旺盛，敏感肌护肤这样的细分类市场热度不断攀升，越来越多的品 牌开始加码这一赛道。 据艾瑞咨询发 ...

Core Insights - Amorepacific is introducing new brands to enhance its presence in the Chinese market, particularly in response to the declining momentum of its existing brands like Innisfree and Etude House [1] - The company has launched its skincare brand AESTURA, targeting the sensitive skin segment, with a primary focus on online sales in China [1] - The sensitive skin care market in China is experiencing significant growth, with a projected market capacity exceeding 30 billion yuan by 2024 [3] Company Developments - Amorepacific reported a consolidated sales revenue of 1.16 trillion KRW in its recent quarterly report, marking a 15.7% year-on-year increase, with overseas sales growing by 40.5% to 473 billion KRW [3] - The company appointed Taeho Park as the new president of Amorepacific China in April 2024, who has over 24 years of experience within the group [3] - Under Park's leadership, Amorepacific has implemented new market strategies, including the introduction of the high-end skincare brand AP in Shanghai [3] Industry Context - Other international beauty brands are expanding their market share, while Amorepacific's established brands lack appeal to younger consumers in China [4] - Industry experts suggest that introducing new brands is a preferred strategy for companies to attract the new generation of consumers in the competitive Chinese market [4]

Core Viewpoint - The article discusses the decline of Korean cosmetics in the Chinese market and their resurgence in the U.S. market, highlighting the factors contributing to these trends. Group 1: Decline in Chinese Market - Korean cosmetics, once popular in China due to hit dramas and celebrity endorsements, have seen a significant decline, with Amorepacific reporting a 30% year-on-year drop in sales in the Greater China region [1] - In 2021, China accounted for 53% of Korea's cosmetics exports, but this figure is projected to drop to around 25% by 2024, with the U.S. market showing the largest growth, nearing 20% of total exports [1] Group 2: Resurgence in U.S. Market - Korean cosmetics are making a comeback in the U.S. market, aided by the popularity of the 10-step skincare routine and the influence of social media platforms like TikTok and Instagram [2][6] - Amorepacific has initiated brand revitalization efforts, including rebranding its high-end skincare line Sulwhasoo and hiring well-known celebrities as brand ambassadors, leading to double-digit sales growth for brands like Laneige [3][5] - The introduction of a wider range of product shades to cater to diverse skin tones has significantly boosted sales, as seen with the brand Tirtir, which expanded from 3 to 40 shades [5] Group 3: Market Dynamics and Consumer Behavior - The influence of K-culture, including K-dramas and K-pop, continues to drive consumer interest in Korean cosmetics in the U.S. market [7] - The absence of tariffs on most Korean cosmetics due to the U.S.-Korea Free Trade Agreement has made these products more competitively priced compared to local brands [7] - The "lipstick effect" suggests that consumers are more willing to try affordable and innovative Korean cosmetics during economic downturns [7] Group 4: Distribution and Marketing Strategies - Korean brands are increasingly focusing on offline retail experiences, signing long-term leases in key locations to attract local consumers [8] - Initiatives like the opening of Olive Young stores in the U.S. aim to enhance consumer exposure to Korean beauty products [10] Group 5: Challenges Ahead - Korean cosmetics companies face challenges such as stricter U.S. FDA regulations and potential tariff impacts due to changing political climates [11]

Investment Rating - The report assigns a neutral rating to Hilton Hotels and a bearish rating to Amorepacific and LG Household & Health Care [2]. Core Insights - The Korean cosmetics industry is experiencing a decline in duty-free sales (DFS), with April 2025 showing a 10% year-over-year decrease, an improvement from a 16% decline in March 2025 [4][6]. - In the U.S. market, Korean cosmetics exports continued to grow, with a 21% year-over-year increase in April 2025, although some brands like COSRX are struggling with inventory issues [11][21]. - The Chinese market is showing a decline in online sales, with major platforms experiencing a 31% to 42% year-over-year drop [2]. Summary by Sections Duty-Free Sales Performance - April 2025 DFS revenue reached $822 million, down 10% year-over-year, primarily due to declines in local and foreign sales [4][6]. - The total DFS revenue for April 2025 is 47% of the level seen in April 2019, compared to 39% in March 2025 [7]. U.S. Market Insights - Korean cosmetics exports to the U.S. in April 2025 increased by 13%, contributing to a total export growth of 21% [11][16]. - COSRX's sales on Amazon in the U.S. fell by 38% year-over-year, while Laneige saw a 73% increase in the same period [21][24]. Chinese Market Dynamics - The report highlights a significant decline in online sales across major platforms in China, with declines ranging from 31% to 42% year-over-year [2]. - Local brands are gaining market share, with multinational companies experiencing varying degrees of growth and decline [52].

Group 1 - The core viewpoint of the article highlights the significant divergence in performance among major Korean cosmetic companies, with some experiencing substantial declines in profits while others show growth in international markets [1][2][3] - Korean cosmetics are facing challenges in the Chinese market, with companies like LG Household & Health Care and Amorepacific reporting revenue declines of 4.1% and 10.4% respectively in China [1][23] - In contrast, Amorepacific reported a remarkable growth of 79% in the Americas, indicating a successful expansion strategy in that region [1][32] Group 2 - Among the three major Korean cosmetic companies, only Amorepacific achieved double-digit growth in both revenue and operating profit, with increases of 17.1% and 62% respectively [3][6] - LG Household & Health Care and Aekyung both reported declines in profits, with LG's revenue down by 1% and operating profit down by 3%, while Aekyung's revenue fell by 10.7% and operating profit plummeted by 63.3% [6][15] - The overall export of Korean cosmetics reached $2.6 billion in Q1 2025, marking a 13% increase, but exports to China saw a significant drop of 15.3% [18][19] Group 3 - The article emphasizes the ongoing struggles of Korean cosmetics in the Chinese market, with many brands withdrawing or closing stores, despite the market still being a crucial area for growth [30][31] - Companies are adjusting their strategies in China, with Aekyung planning to expand its product lines and Amorepacific aiming for breakeven through improved channel management and e-commerce operations [30][31] - The performance in the U.S. and Japan remains strong, with LG Household & Health Care reporting a 3.1% increase in North America and a 23.2% increase in Japan [31][32]