Dalba Global product promotion poster. Photo courtesy of Dalba Global
Dalba Global fell for a second straight day even after posting record earnings for the second quarter, as expectations built up ahead of the results and weaker-than-expected third-quarter guidance triggered profit-taking.
The stock closed at 228,500 won on the 15th, down 7,500 won, or 3.18%, from the previous session, according to the Korea Exchange (KRX). Shares had already tumbled 9.9% the day before. Analysts said the pullback reflected disappointment that results fell short of heightened expectations after a rapid short-term rally. Shinhan Securities also cited investor fatigue following the recent surge as a factor behind the correction.
The earnings themselves were the highest on record. Dalba Global’s consolidated second-quarter revenue rose 45.6% year-on-year to 186.9 billion won, while operating profit climbed 61.6% to 47.2 billion won. The operating margin came in at 25.3%. Operating profit beat the market consensus of 41.2 billion to 41.3 billion won by about 15%.
The problem was that actual market expectations had risen even higher than the consensus. Shinhan Securities estimated that the market had anticipated operating profit of more than 50 billion won, factoring in the earlier-than-expected recognition of U.S. Amazon Prime Day sales, which shifted to the second quarter from the third. Shinhan’s own estimate was about 52 billion won. Although the company set fresh highs in both revenue and profit, the results fell short of the elevated bar.
The third-quarter guidance provided by Dalba Global also weighed on sentiment. The company guided for revenue of 170 billion won and an operating margin of 17% in the third quarter, both below the 186.9 billion won in revenue and 25.3% margin recorded in the second quarter. Analysts attributed the outlook to seasonal factors, including slower summer demand for mist products and supply issues with sunscreen containers. Hyundai Motor Securities likewise projected that short-term earnings momentum would weaken, citing the entry into the third-quarter off-season and slowing sales in Korea, Russia and Japan.
Still, most analysts see no change in the mid- to long-term growth trajectory. Overseas revenue rose 74% year-on-year to 141.5 billion won in the second quarter, accounting for 76% of total sales. North American revenue led the growth, jumping about 174% to 34.8 billion won, while European revenue climbed roughly 240% to 20.5 billion won. In the U.S., the company is expanding beyond Amazon and TikTok Shop into offline channels such as Costco, while in Europe it is pursuing online growth and new offline retail entries at the same time.
Expectations for improved profitability from expanding business-to-business (B2B) sales also remain. According to Shinyoung Securities, the B2B share of revenue rose 4 percentage points from the previous quarter to 39% in the second quarter, while the cost-of-sales ratio held at 23.2%. The firm said that greater efficiency in advertising and other selling and administrative expenses could support future profitability.
Brokerages have maintained their “buy” ratings. Kyobo Securities and Shinhan Securities kept their target price at 310,000 won, while Hyundai Motor Securities set 290,000 won and Shinyoung Securities 275,000 won. With sales regions, distribution channels and product lines all expanding simultaneously, led by North America and Europe, analysts said investors should distinguish between the short-term adjustment in earnings expectations and mid- to long-term growth potential.
This Bureau Chief, That Stock