[Click eStock] "Cosmecca Korea Secures Competitiveness with New Brands... Target Price Up"

Samsung Securities Raises Cosmecca Korea Target Price to 110,000 Won

On July 8, Samsung Securities raised its target price for Cosmecca Korea from 90,000 won to 110,000 won, maintaining its 'Buy' investment rating. The brokerage cited Cosmecca Korea's strengthened competitiveness in securing new brand orders, which is expected to drive further profit expansion.

Samsung Securities forecasts Cosmecca Korea's second-quarter revenue and operating profit at 204.1 billion won (+26.2% year-on-year) and 26.3 billion won (+14.2%), respectively. These figures are in line with market expectations.

The Korean subsidiary is expected to record sales of 153.6 billion won as new clients enter a phase of revenue growth. Englewood Lab is projected to maintain a solid performance, focusing on major clients with high dependency, and is expected to generate sales of 57.5 billion won. The Chinese subsidiary is estimated to post sales of 7.9 billion won, improving by 23.3% quarter-on-quarter, mainly driven by cushion and other makeup products, despite deferred production volumes for multinational companies (MNCs) due to raw material supply issues.

Donghee Jung, a research analyst at Samsung Securities, stated, "Profitability is expanding based on the company's competitiveness in securing orders from new indie brands. We have raised our operating profit estimates for 2026 and 2027 by 2.4% and 3.0%, respectively, compared to previous forecasts. The upward revision of the target price also reflects the 12.5% increase in the peer average multiple, due to favorable supply-demand conditions for ODM (Original Design Manufacturer) companies."

He added, "For the Korean subsidiary, both revenue and profit margins are expected to improve in the second half, driven by increased order volumes from new clients. While the Eumseong plant is essentially running at full capacity by securing major client lines, the recently acquired Ochang plant will begin operations next year, enhancing capacity to accommodate new clients."

He continued, "Although the U.S. FDA approval of BEMT (Bemotrizinol) allows American brands access to the same ingredient—meaning it is not a short-term differentiator—the structure, in which Englewood Lab is solely responsible for producing OTC sunscreen, is expected to drive meaningful mid- to long-term benefits. With a high proportion of new brand clients, Cosmecca Korea is highly attractive among listed ODM companies, especially in terms of potential for upward earnings revisions in the second half."

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