"Now Is a Buying Opportunity While Overlooked"... Record-High Earnings Ahead, but Stock at Historical Low [Click e-Stock]

Valuation Hits Historic Low Despite Record-High Earnings Outlook
Cosmetics Export Trend Remains Solid
Stock Price Pressured by Limited Market Attention

According to securities industry analysis, Kolmar Korea, a cosmetics research and development specialist, is expected to achieve record-high earnings this year, while its stock price remains at historically low levels.

On June 17, Korea Investment & Securities reported that analyst Kim Myoungjoo maintained a "Buy" rating and a target price of 130,000 won for Kolmar Korea, stating, "Now, while the stock is overlooked, is a buying opportunity."

Recently, the cosmetics industry has continued to perform well, and macroeconomic uncertainties have eased. However, the sector’s stock prices have shown disappointing trends. This is mainly because capital flows have been heavily concentrated in leading sectors such as semiconductors within the market.

Kim emphasized, "Kolmar Korea's current valuation is at a historical low, but this year's performance is expected to be the highest ever. Even taking into account the unfavorable market supply and demand, the current stock price level is highly attractive."

Kolmar Korea's consolidated revenue for the second quarter of this year is projected to reach 825.9 billion won, a 13.0% increase year-on-year, and operating profit is expected to rise by 32.4% to 97.3 billion won. Operating profit is anticipated to exceed market expectations by 5.2%. As major client companies have shown solid sales, the domestic subsidiary's revenue is forecast to rise by 23.5% year-on-year, with operating profit jumping 32.7% to 65 billion won.

In China, the subsidiary is expected to achieve around 10% sales growth year-on-year, as the industry bottoms out and management focuses on profitability. In contrast, the U.S. subsidiary is projected to see a 12.6% year-on-year decrease in sales, continuing its negative growth trend.

Kim explained, "Raw material prices have increased due to tensions between the U.S. and Iran, but Kolmar Korea is estimated to have successfully raised product prices. Even just expanding the offline distribution channels of brand companies in the U.S. and broadening regional reach in Europe and elsewhere is enough to drive further performance improvement."

He further added, "As uncertainties surrounding the Strait of Hormuz ease, there is a high likelihood that shipping costs will fall, which is positive for cosmetics, a leading export sector. Although the growth rate of cosmetics exports from June 1 to 10, adjusted for working days, was only 14.0% year-on-year and seemed somewhat disappointing, when considering the base effect from last year's data error in Poland exports, the actual trend is quite solid."

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