Korean cosmetics manufacturer Kolmar has reached an all-time high stock price during trading, buoyed by its record performance in the second quarter of this year. The company's growth in the domestic cosmetics original design manufacturing (ODM) sector, along with increased orders from scale-up brands and rising overseas demand, has led to a significant improvement in its financial results, prompting analysts to raise their target prices.
As of 9:32 a.m. on the Korea Exchange, Kolmar's stock was trading at 138,200 won, up 5,700 won (4.30%) from the previous trading day. At one point, the stock surged to 144,000 won, marking its highest price ever.
The stock has seen a sharp increase this month, rising 39.18% from August 3 to August 12, ranking 20th among KOSPI stocks in terms of growth during that period.
The surge in stock price is attributed to improved financial performance. Kolmar reported a consolidated operating profit of 110.3 billion won for the second quarter, a 50.2% increase compared to the same period last year. Revenue rose by 17.8% to 861.3 billion won, while net profit jumped 68.9% to 70.6 billion won. Notably, this marks the first time that quarterly operating profit in the cosmetics ODM industry has exceeded 100 billion won.
For the first half of the year, cumulative revenue reached 1.5893 trillion won, up 14.8%, with operating profit increasing by 41.8% to 189.2 billion won. Net profit also saw a significant rise of 100.9% to 130.6 billion won.
The domestic business has been the main driver of these results. In the second quarter, domestic standalone revenue was 430.4 billion won, a 31.2% increase year-on-year, while operating profit rose by 44.3% to 70.8 billion won. Analysts attribute this success to strong demand for skincare and sun care products, as well as the growth of existing indie brands, which has led to larger order volumes.
Orina, a researcher at LS Securities, noted, "While the influx of new indie brands previously drove growth, we are now seeing a significant increase in order sizes from major scale-up brands. The global competitiveness of Kolmar and its clients is improving faster than market expectations."
Analysts have collectively raised their target prices for Kolmar. On the same day, all 15 securities firms that issued reports on Kolmar increased their target prices, with Shinhan Investment & Securities setting the lowest at 153,000 won and LS Securities at the highest at 200,000 won.
Park Hyun-jin, a researcher at Shinhan Investment & Securities, stated, "We believe that the increase in coverage of new indie clients, along with smooth responses to export demand in new categories, will continue to drive profit leverage effects from revenue growth in the third quarter for the Korean subsidiary."
Kolmar has set a target for domestic standalone revenue of 430 billion won for the third quarter, with an operating profit margin of over 15%. LS Securities anticipates that production for year-end promotions in the U.S. and Europe will be concentrated in the third quarter, and the expansion of European exports for scale-up clients will emerge as a new growth axis.
Additionally, the expansion of over-the-counter (OTC) sales in the U.S. and the launch of new products are expected to provide further momentum for sun care growth in the second half of the year and into next year. However, the impact of summer vacations in the third quarter may reduce operational days, which could affect actual sales capacity.
* This article has been translated by AI.
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