National Pension Service Buying In... Manufacturers Gain Spotlight Over Brands as Sales Surge in US and Europe

Reflecting the K-beauty Export Boom, Focus on 'ODM' Growth Potential

Simultaneous Buying of Kolmar Korea, Cosmax, and Cosmecca Korea

Rising Expectations for Performance Amid Expanding Exports to the US and Europe

It has been confirmed that the National Pension Service increased its shareholdings in major domestic cosmetics original design manufacturing (ODM) companies across the board in the second quarter of this year. As cosmetics exports reached an all-time high, with the K-beauty export boom continuing in the United States, Europe, and Japan, industry analysts interpret this as a move that focuses on the growth potential and earnings stability of manufacturers rather than brands.

According to the Financial Supervisory Service’s electronic disclosure system on July 8, the National Pension Service increased its holdings in the "Big 3" cosmetics ODM companies—Cosmax, Kolmar Korea, and Cosmecca Korea—during the second quarter of this year. The National Pension Service raised its stake in Cosmax from 11.22% (1,273,792 shares) to 12.57% (1,426,108 shares), adding 152,316 shares and increasing its share by 1.35 percentage points.

The stake in Kolmar Korea also rose from 10.21% at the end of the first quarter to 12.80% at the end of the second quarter, a 2.59 percentage point increase. As a result, the number of shares held increased by 610,516, from 2,410,103 shares to 3,020,619 shares. Cosmecca Korea also raised its stake during the same period from 12.52% (1,337,645 shares) to 12.87% (1,374,650 shares), an increase of 0.35 percentage points.

Analysts say that the National Pension Service’s simultaneous increase in its holdings of the three leading domestic cosmetics ODM companies reflects expectations for the continued growth of K-beauty. In particular, K-beauty’s positive impact is rapidly spreading not only to brand companies but also to manufacturers. In fact, as Korean indie brands have gained popularity in the United States, Europe, Japan, and other markets, production orders from these brands have been increasingly concentrated with domestic ODM companies such as Cosmax, Kolmar Korea, and Cosmecca Korea. As the number of K-beauty brands grows, ODM companies’ client bases also expand, creating a structure in which ODM firms are bound to benefit.

Securities analysts predict that among cosmetics-related sectors, ODM companies are expected to show the most noticeable improvement in performance this year. This is due to a significant increase in orders for sun care and basic skincare products, especially in the United States, as well as the growing share of high-performance products—which is further contributing to profitability. Because ODM companies have dozens to hundreds of clients, their earnings volatility is relatively low compared to companies reliant on a single brand’s success.

The relatively high predictability of earnings compared to brand companies is another reason institutional investors favor ODM firms. While the earnings of brand companies can fluctuate significantly depending on hit products or marketing results, ODM companies secure stable orders based on a diversified client base, earning them a reputation for sustainable growth. The National Pension Service’s recent investment is also seen as a bet on the overall growth of the K-beauty industry rather than on the success of any particular brand. In fact, while brands may change rapidly in response to market trends, ODM companies are likely to consistently benefit from market expansion as they secure a diverse range of clients.

Jongdae Park, a researcher at Hana Securities, analyzed, "In 2026, with Korean cosmetics exports expected to rise by more than 25% year-on-year, the industry is enjoying its strongest global momentum ever. Despite the peak season for K-beauty’s popular sun protection products ending in the second quarter, growth in the second half of the year is also unlikely to slow, and the growth rate is likely to exceed expectations."

Woojeong Kwon, a researcher at Kyobo Securities, interpreted, "As K-beauty brands expand their reach from the United States to other regions, overall order volumes are increasing. In addition, the number of new hit brands is rising, which is contributing to the improved performance of ODM companies."

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