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Yuanta Securities has raised its target price for Silicon Two (257720) by 16.7%, from 42,000 KRW to 49,000 KRW, citing strengthened foundations for structural growth beyond short-term earnings recovery. The previous session’s closing price was 34,750 KRW, implying a 41% upside potential to the new target.
On April 28, analyst Lee Seung-eun at Yuanta Securities explained, “The target price revision reflects an increase in the target price-to-earnings ratio (PER) applied to the average 2025–2026 earnings per share (EPS), from 17 times to 20 times.”
Lee highlighted three key reasons for the PER revision: “First, despite a downturn in consumer sentiment across Europe, demand for K-beauty products has remained relatively solid. Silicon Two has secured stable demand by expanding retail channels, including store placements at Boots and a fixed presence in the 'Korean Skincare' category."
“Second, amid an era of high inflation, preferences for cost-effective products and expectations of easing tensions from the Russia-Ukraine conflict are enhancing K-beauty’s competitiveness in price and efficacy, boosting its market penetration," Lee added. "Third, while protectionism is intensifying in the U.S., Europe has emerged as a strategic market, where Silicon Two is establishing real growth infrastructure through securing logistics hubs, expanding retail channels, and building high-margin structures.”
Lee noted that Silicon Two’s European sales surged 49% year-on-year in 2024, and the region’s share of total sales expanded from 11.7% to 17.1%, rapidly emerging as a new core market replacing the U.S. "The expansion of a high-margin structure based in Europe, sales growth in the UAE and other emerging markets, and diversified performance across multiple strategic brands all justify a structural re-rating of the stock’s PER," Lee explained.
The analyst also positively assessed the company's efforts to rebuild its distribution portfolio around high-growth brands. “Silicon Two is reducing its dependency on COSRX, whose sales growth is slowing, and is shifting toward a multi-portfolio structure centered on high-growth brands such as Beauty of Joseon, TirTir, Medicube, and Biodance," Lee stated. "Notably, Beauty of Joseon now accounts for 24% of Silicon Two’s total sales, with approximately 46% of the brand’s annual revenue being distributed through Silicon Two."
This indicates a strong mutual reliance between the two companies and suggests that Silicon Two’s distribution capabilities are highly trusted by partner brands, according to Lee.
Furthermore, Lee emphasized that, "Following its strategic partnership with Goodai Global—which acquired TirTir in May 2024—the contribution of the TirTir brand to Silicon Two’s sales is also expanding rapidly. The simultaneous growth of multiple brands within Silicon Two’s platform demonstrates the distributor’s platform power, helping reduce earnings sensitivity and stabilizing its long-term revenue structure.”
*[KOSDAQ]Silicon2(257720) operates a distribution business based on overseas branches and logistics centers, selling E-Commerce direct-imported products to approximately 180 countries worldwide through its platform 'Stylekorean.com,' featuring K-Beauty brands. Market capitalization is 2.13 trillion won(as of April 25, 2025, closing price).
Yuanta Securities has raised its target price for Silicon Two (257720) by 16.7%, from 42,000 KRW to 49,000 KRW, citing strengthened foundations for structural growth beyond short-term earnings recovery. The previous session’s closing price was 34,750 KRW, implying a 41% upside potential to the new target.
On April 28, analyst Lee Seung-eun at Yuanta Securities explained, “The target price revision reflects an increase in the target price-to-earnings ratio (PER) applied to the average 2025–2026 earnings per share (EPS), from 17 times to 20 times.”
Lee highlighted three key reasons for the PER revision: “First, despite a downturn in consumer sentiment across Europe, demand for K-beauty products has remained relatively solid. Silicon Two has secured stable demand by expanding retail channels, including store placements at Boots and a fixed presence in the 'Korean Skincare' category."
“Second, amid an era of high inflation, preferences for cost-effective products and expectations of easing tensions from the Russia-Ukraine conflict are enhancing K-beauty’s competitiveness in price and efficacy, boosting its market penetration," Lee added. "Third, while protectionism is intensifying in the U.S., Europe has emerged as a strategic market, where Silicon Two is establishing real growth infrastructure through securing logistics hubs, expanding retail channels, and building high-margin structures.”
Lee noted that Silicon Two’s European sales surged 49% year-on-year in 2024, and the region’s share of total sales expanded from 11.7% to 17.1%, rapidly emerging as a new core market replacing the U.S. "The expansion of a high-margin structure based in Europe, sales growth in the UAE and other emerging markets, and diversified performance across multiple strategic brands all justify a structural re-rating of the stock’s PER," Lee explained.
The analyst also positively assessed the company's efforts to rebuild its distribution portfolio around high-growth brands. “Silicon Two is reducing its dependency on COSRX, whose sales growth is slowing, and is shifting toward a multi-portfolio structure centered on high-growth brands such as Beauty of Joseon, TirTir, Medicube, and Biodance," Lee stated. "Notably, Beauty of Joseon now accounts for 24% of Silicon Two’s total sales, with approximately 46% of the brand’s annual revenue being distributed through Silicon Two."
This indicates a strong mutual reliance between the two companies and suggests that Silicon Two’s distribution capabilities are highly trusted by partner brands, according to Lee.
Furthermore, Lee emphasized that, "Following its strategic partnership with Goodai Global—which acquired TirTir in May 2024—the contribution of the TirTir brand to Silicon Two’s sales is also expanding rapidly. The simultaneous growth of multiple brands within Silicon Two’s platform demonstrates the distributor’s platform power, helping reduce earnings sensitivity and stabilizing its long-term revenue structure.”
*[KOSDAQ]Silicon2(257720) operates a distribution business based on overseas branches and logistics centers, selling E-Commerce direct-imported products to approximately 180 countries worldwide through its platform 'Stylekorean.com,' featuring K-Beauty brands. Market capitalization is 2.13 trillion won(as of April 25, 2025, closing price).