Our target price for Amore of W132,000 is based on ~30x applied to FY25 EPS estimate. Our target multiple is 1.0 standard deviation below the stock's 10-year historical average (same as before). We believe Amore will continue to trade below its historical average P/E, given structurally lower revenue/profit pool coming from travel retail channel & less stickiness in consumer’s preference (especially among younger generation).

Key upside risks that could cause the shares to trade above our target price include: 1) meaningful recovery in both travel retail revenue & profitability; and 2) Amore becoming successful in the US with more diversified brands (on top of existing COSRX / Laneige / Innisfree).

Key downside risks that could cause the shares to trade below our target price include: 1) China biz structurally becoming a loss-making biz (even post restructuring); and/or 2) worsening sign of notable slowdown in COSRX earnings growth.