IBK Investment & Securities announced on August 3 that it has initiated coverage on Korea Kolmar, citing continued growth in sun care and basic care products, along with expectations for the normalization of performance from its U.S. subsidiary and stable profit contributions from HK Innoen. The firm has set a buy rating and a target price of 150,000 won.
Researcher Jo Kyung-jin from IBK Investment & Securities stated, "Korea Kolmar is an ODM company with strengths in the production of high-margin sun care and basic care products. Thanks to strong exports in the sun care and basic categories from its domestic operations and diversification in production categories, we expect to see growth in revenue and an expansion of operating leverage."
He added, "In the past, there was a seasonal pattern where orders slowed down after the second quarter, but this year we anticipate a solid order flow continuing into the second half. The gradual normalization of performance from the U.S. subsidiary and stable profit contributions from HK Innoen are expected to support overall performance."
Jo projected that consolidated revenue for the second quarter would reach 826.9 billion won, with operating profit estimated at 96.9 billion won. He noted that the domestic subsidiary is expected to achieve solid results with revenue of 403.9 billion won and operating profit of 64.2 billion won, driven by increased sun care orders as it enters the summer peak season and a rise in export volumes from existing clients.
Furthermore, he mentioned, "The expansion of orders from top clients and an increase in production for global multinational corporation (MNC) brands are expected to lead to margin growth. The U.S. subsidiary is likely to continue its gradual recovery, as the decrease in orders from existing key clients will be partially offset by new brand volumes."
* This article has been translated by AI.
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