[Click e-Stock] "Kolmar Korea Expected to Deliver Another 'Surprise' in the Second Half... Target Price Up"

Hanwha Investment & Securities Raises Target Price from 120,000 Won to 150,000 Won

On August 12, Hanwha Investment & Securities raised its target price for Kolmar Korea from 120,000 won to 150,000 won, while maintaining its "Buy" investment rating.

Youjeong Han, a research analyst at Hanwha Investment & Securities, commented on Kolmar Korea, stating, “In the United States, the company is diversifying its clientele at a faster pace than expected, and Yonwoo—its subsidiary specializing in cosmetic containers—is also beginning a turnaround with reduced dependence on legacy clients and increased orders from indie brands. As a result, there is greater visibility for improvement in business segments that have previously weighed on the company’s performance.”

In the second quarter of this year, Kolmar Korea posted consolidated revenue of 861.3 billion won, representing a 17.9% increase year-on-year. Operating profit rose by 50.2% to reach 110.3 billion won, surpassing the market consensus of 94.9 billion won. On a standalone basis, the operating margin hit a record high for the second consecutive quarter at 16.4%.

The operating loss in the U.S. narrowed by 2.3 billion won from the previous quarter, amounting to 1.4 billion won. According to the analyst, “As sales contributions from the company’s previously largest client have dropped to 50%, a global MNC-affiliated color cosmetics brand has entered the top five client list, accelerating client diversification more rapidly than expected.” Yonwoo, Kolmar Korea’s cosmetics container subsidiary, also reported significant improvement, with sales growing to 91.1 billion won and operating profit reaching 7 billion won, driven by a higher proportion of indie brands and robust orders for sun care containers.

The analyst projected that Kolmar Korea’s “earnings surprise” would continue into the second half of the year. She estimated consolidated revenue for the second half at 1.6014 trillion won and operating profit at 152.6 billion won. “Based on orders, the third quarter exceeds the second quarter, and despite a decrease in working days from 62 in Q2 to 57 in Q3 due to summer holidays, standalone sales are expected to remain at least on par with the previous quarter,” she explained.

She added, “While existing clients continue to expand their export destinations and SKUs, the order sizes from scaled-up brands are increasing. Even if some third-quarter production schedules are pushed back to the fourth quarter, this is due to differences in working days, rather than a slowdown in demand. Therefore, we expect that the high level of standalone sales will continue in the second half.”

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