SK Securities on July 14 raised its target price for Korea Kolmar from 120,000 won to 140,000 won, an increase of 16.7%, citing strong growth in cosmetic exports. The firm maintained its 'buy' rating.
Hyung Kwon-hoon, a researcher at SK Securities, stated, "The export market for skincare products is showing exceptional strength, which is sustaining the performance momentum for Korea Kolmar, known for its high proportion of basic cosmetic sales. We expect strong growth without significant seasonal impacts through the third quarter."
Korea Kolmar's consolidated revenue for the second quarter is estimated at 821 billion won, with an operating profit of 95.5 billion won, reflecting increases of 12.3% and 30.0%, respectively, compared to the same period last year. The operating profit is expected to align with market consensus of 94.9 billion won.
The domestic subsidiary is anticipated to see improved performance driven by increased production due to strong export demand. Standalone revenue is projected to reach 410.2 billion won, a 25.0% increase year-on-year, while operating profit is expected to rise by 31.8% to 64.6 billion won due to operating leverage.
The researcher noted, "Cosmetic exports in the second quarter grew by 39% compared to the same period last year, and online sales traffic for major indie clients has remained strong since the first quarter."
Particularly, the expansion of indie brands into overseas offline channels is expected to support this growth. He added, "Unlike in the past, indie brands are increasing their penetration in offline channels in the U.S. and Europe, so we anticipate strong shipment growth to continue at least through the third quarter."
For the overseas subsidiaries, differentiated trends are expected by region. While sales in North America may temporarily decline, new projects in the second half are expected to improve performance. The China subsidiary is projected to maintain a growth rate similar to the first quarter, with sales expected to increase by 13.4% year-on-year.
* This article has been translated by AI.
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