[Click eStock] "Kolmar Korea, Top Beneficiary of K-Beauty's Global Momentum... Target Price Raised"

On August 13, Hana Securities raised its target price for Kolmar Korea from 140,000 won to 180,000 won, identifying the company as the biggest beneficiary of the global momentum in the Korean cosmetics industry. The firm maintained its 'Buy' investment rating.

Jongdae Park, an analyst at Hana Securities, stated, "This year, the Korean cosmetics industry is experiencing its strongest global momentum ever, with exports up more than 30% year-on-year. Kolmar Korea stands out as the greatest beneficiary among original design manufacturers (ODMs), especially as basic product categories are driving exports to Europe and the United States," adding, "We anticipate a significant increase in both business scale and simultaneously in earnings per share (EPS) and valuation, setting the stage for strong share price momentum."

In the second quarter of this year, Kolmar Korea posted consolidated sales of 861.3 billion won, up 18% from the same period last year, and an operating profit of 110.3 billion won, a 50% increase, thereby beating market expectations (operating profit consensus of 94.9 billion won). Park noted, "For the first time in the history of Korea’s ODM industry, quarterly operating profit surpassed 100 billion won. Domestic operations grew by 31%, leading the earnings improvement. Plant utilization reached 81%, while the share of sun care sales hit an all-time high of 35%, driving the operating margin to a record 16.4%," he explained.

This strong earnings growth is expected to continue. Park commented, "Even taking into account the seasonal lull in the fourth quarter, we estimate that annual domestic sales will exceed at least 1.5 trillion won," adding, "With sales of basic categories other than sun care growing significantly, the operating margin in the third quarter should not drop markedly compared to the second quarter."

Following the launch of basic products for global multinational corporations (MNCs), strong market response has led to the development of new large-scale projects. Park stated, "Depending on the performance of basic products for global MNCs, Kolmar Korea now has an opportunity to expand its ODM reach into the global luxury basics category," adding, "We expect earnings could outperform consensus going forward, and see valuation normalizing as a result."

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