[Click e-Stock] Expectations for Kolmar Korea Are Bound to Rise

Hyundai Motor Securities raised its target price for Kolmar Korea from 170,000 won to 185,000 won, while maintaining its “buy” rating.

On Oct. 14, analyst Ha Heeji of Hyundai Motor Securities said, "We set the target price by applying a 20x 12-month forward price-to-earnings ratio (PER) for industry peers to Kolmar Korea's 12-month forward earnings per share (EPS) of 9,466 won. We focused on the upward revision to our fourth-quarter earnings estimate for this year, reflecting continued high growth led by Kolmar Korea's domestic operations and favorable industry conditions. The company has also secured medium- to long-term growth potential, supported by expanded production capacity (CAPA) in the second half of next year and increased orders from global clients."

Kolmar Korea is expected to report consolidated revenue of 831.4 billion won for the third quarter of this year, up 21.7% from a year earlier, and operating profit of 91.1 billion won, up 56.1%, in line with market expectations.

In Korea, revenue is expected to reach 431.5 billion won and operating profit 65.8 billion won. "High growth is expected to continue, supported by solid orders, particularly for skincare products," Ha said. "The container procurement issue is a temporary supply-demand mismatch caused by a surge in demand for some brands, reflecting strong demand for those brands."

She added, "In the United States, revenue at the U.S. subsidiary is expected to edge up from the previous quarter, but it will continue to post a loss because it will take time for new clients to contribute to earnings. China is also expected to remain in the red. Earnings will decline as orders from major clients slow, but the company will respond by increasing volumes for global multinational corporations and expanding production for Southeast Asian markets."

Regarding Yonwoo, the cosmetics container maker acquired by Kolmar Korea, she said, "It is expected to return to profitability and outperform expectations. Orders for pumps from clients are continuing, but volumes are slightly lower than during the peak season in the second quarter of this year. Profit improvement will be limited as a provision for performance bonuses is reflected in the results."

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