[Click e-Stock] "Kolmar Korea: Suncare Peak Season Signals Another Strong Q2"

LS Securities Raises Target Price to 120,000 Won

On June 10, LS Securities raised its target price for Kolmar Korea from 98,000 won to 120,000 won, maintaining its "Buy" investment rating, citing expectations of strong second-quarter results.

Orin A, an analyst at LS Securities, stated, "The growth momentum of Kolmar Korea's domestic subsidiary is extremely strong, and expectations for a recovery in the previously concerning performance of the U.S. subsidiary remain valid."

The profitability of the domestic subsidiary is expected to remain solid for the time being. Analyst Orin predicted, "This year, the domestic subsidiary's export-driven sales ratio is expanding, which is easing seasonality, and increases in raw material prices are being reflected in product prices, resulting in continued robust profitability." She estimated annual sales would grow 20.3% year-on-year, with an operating margin of 13.2%.

The growth in performance is driven by the "suncare" segment. Analyst Orin explained, "As Kolmar Korea's major suncare clients expand their market presence outside the U.S., particularly in Europe, Kolmar Korea's results are also expected to rise."

The company is projected to continue its solid performance in the second quarter, following the previous quarter. Sales from the domestic subsidiary are expected to reach around 400 billion won, up roughly 20% year-on-year. Orin estimated, "With the peak season for suncare products, the operating margin for the domestic subsidiary is also likely to improve to around 15%, up from the same period last year. Sales at the Chinese subsidiary are anticipated to rise 9.1% year-on-year to approximately 54.4 billion won, with the peak season effect lifting its operating margin to the low 10% range."

For the U.S. subsidiary, sales are expected to be in the low 10 billion won range, while the Canadian subsidiary is forecast to maintain a stable trend similar to the first quarter. Orin noted, "For Yonwoo, the cosmetics packaging subsidiary, it appears that indie brands are partially filling the order gap left by legacy customers, which is expected to improve the product mix. In particular, the increased share of orders from indie brands is leading to improved profitability, raising the likelihood that Yonwoo will turn an operating profit."

This content was produced with the assistance of AI translation services.