Hana Securities announced on November 9 that it has raised its target price for Cosmecca Korea from 147,000 won to 155,000 won, citing strong growth in domestic operations, which saw a 55% increase compared to the same period last year despite a high base from the previous year. The investment recommendation remains a 'buy.'
Park Jong-dae, a researcher at Hana Securities, stated in a report that "there has been a significant increase in orders from both large clients and small indie brands. Although there were fewer working days due to the Chuseok holiday and summer vacations, the company managed to handle the volume by increasing overtime and outsourcing."
Park noted that Cosmecca Korea recorded consolidated sales of 247.5 billion won and an operating profit of 27.2 billion won in the third quarter, which fell short of market expectations but still demonstrated strong performance. He highlighted that domestic sales exceeded 200 billion won for the first time in a quarter, driving the improvement in results.
When compared to the third quarter of 2021, sales have quadrupled, reflecting an average annual growth rate of 32%, significantly outpacing competitors such as Cosmax and Kolmar Korea during the same period.
Regarding the profitability of domestic operations, Park analyzed that a temporary increase in costs had an impact. He explained, "The domestic operating profit margin declined compared to the previous quarter due to rising costs from increased outsourcing and a one-time incentive of about 2 billion won related to exceeding performance in the first half of the year."
Additionally, he mentioned that "the issue of container shortages was resolved in the first half of the year," and projected that fourth-quarter domestic sales would likely be similar to those in the third quarter.
* This article has been translated by AI.
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