Beauty stocks led by cosmetics makers gained ground on the 28th as semiconductor shares that had driven South Korea's stock market lost momentum. APR, Amorepacific, LG H&H and Cosmax rose as much as 6% during the session. With investors turning to companies with solid fundamentals, analysts expect major beauty firms to beat market consensus on second-half earnings improvement.
APR (278470) traded at 456,500 won, up 22,200 won or 5.06% from the previous session, according to the Korea Exchange. Other cosmetics stocks also advanced. Amorepacific (090430) changed hands at 150,900 won, up 8,500 won or 5.97%, while LG H&H (051900) gained 6.37%, Cosmax (192820) 6.89%, Silicon2 7.63% and Kolmar Korea 9.88%.
The moves contrasted with semiconductor and AI shares, which had led the KOSPI but were little changed. Samsung Electronics, the largest company by market value, traded at 258,500 won, down 7,500 won or 2.82%, while SK hynix fell 47,000 won or 2.72% to 1,683,000 won. Analysts attributed the caution to investors staying on the sidelines ahead of the Jackson Hole meeting scheduled for 11 p.m., even after Nvidia's second-quarter results announced the previous day beat market estimates.
Brokerages said valuations in the cosmetics sector are at attractive levels. "The cosmetics sector drew attention as an alternative that reduces market volatility and posted explosive share price gains in a short period, and expectations for companies' second-half earnings are now higher than in the first half," said Kim Myung-joo, an analyst at Korea Investment & Securities. "Considering the possibility that cosmetics export values to Canada for August 1-10 may be adjusted, it is time to focus on companies with high valuation appeal."
Silicon2 and APR were cited as prime examples. Kim said that while Silicon2's recent share price gains have been pronounced, its valuation remains attractive even from a distributor's perspective. Solid share performance is expected in the second half as the impact of its Mexican unit, which has begun full operations, is joined by earnings from a Brazilian unit set to be established, the analyst said. Kim added that APR could see upward revisions to earnings estimates if new businesses such as skin boosters and energy-based devices (EBD) get fully under way.
