The move is backed by South Korea’s government and the Korea Exchange, who are encouraging domestic companies to split shares as a way to boost trading by individual investors and increase stock turnover to raise money and fund expansion.
In separate regulatory filings, the cosmetics player and its holding company, AmorePacific Group stated that each will split their shares 10-for-1.
According to Bloomberg, the company’s shares have risen as much as 15% before trading 2.1% higher as of Feb 25th, which will be suspended from April 22.
In a recent statement, AmorePacific reps said that "with the stock split, we expect retail investors to have easier access to our shares and our shareholders can trade them more easily."
In terms of profit, the personal care player showed substantial growth last year, posting sales worth W3.87 trillion (US$1=W1,100) and operating profit of W563.8 billion in 2014, up 25 per cent and 52 per cent respectively on-year.
Reps attribute the brand's success to sales of cosmetics at home and abroad, backed by the arrival of more foreign tourists, mostly Chinese, who shop at duty-free shops.
AmorePacific plans to be the biggest cosmetics company in Asia by 2020
AmorePacific has got big goals in mind, including a significant expansion programme that aims to make it the biggest cosmetics player in Asia and one of the biggest globally, according to the company’s chief technology officer, Hak Hee Kang.
Speaking to Cosmetics Design at the sidelines of the Cosme Tokyo 2014 event, Kang explained how the South Korea-based company is enjoying a wave of popularity throughout the APAC region that is putting the company in a stronger position.
“Most of this growth will be naturally derived from overseas trade, and in particular from China. This means that exports should rise from the current rate of approximately 20% to about 50% by the year 2020,” he reveals.
China will be pivotal...
AmorePacific's chief technology officer went on to explain that the company is aiming to grow its footprint in the China market by expanding its dedicated retail presence in tier one and some tier two cities.
“We want to have standalone stores throughout China. Until now we have had more of a presence in department stores in the country, but if we have our own dedicated stores this means we will have more power and be able to control the brands better,” says Kang.