Korea Kolmar, a leading domestic cosmetics ODM (Original Design Manufacturing) company, received target price upgrades from multiple securities firms on the 9th, while the National Pension Service expanded its stake in the company. Heungkuk Securities raised its target price from 88,000 won to 136,000 won, a 54.5% increase, and Samsung Securities raised its target from 110,000 won to 140,000 won, a 27.3% increase. The upgrades reflect strong Q2 performance projections driven by increased orders for suncare and skincare products amid robust K-beauty export momentum. Korea Kolmar operates in the cosmetics ODM sector, where companies manufacture products for brand clients, and has benefited from global expansion of K-beauty demand.
Securities Firms Raise Korea Kolmar Target Prices by Up to 54.5%
According to the financial investment industry on the 9th, Heungkuk Securities recently raised Korea Kolmar's target price from 88,000 won to 136,000 won, a 54.5% increase. The adjustment was based on analysis that Korea Kolmar demonstrates the typical profit structure of cosmetics ODM companies.
For Q2, looking at Korea Kolmar's domestic standalone entity only, Heungkuk Securities projected revenue of 405.2 billion won, up 23.5%, and operating profit of 62.4 billion won, up 27.3%, reaching an operating margin of 15.4%. The firm analyzed that the domestic entity would deliver overwhelming performance driven by increased order volume for suncare and skincare products.
Samsung Securities also raised its target price from 110,000 won to 140,000 won, a 27.3% increase. The firm assessed that the central axis of growth remains the domestic entity focused on K-beauty clients, supported by this year's strong export performance in domestic cosmetics.
National Pension Service Increases Korea Kolmar Stake to 12.68%
The National Pension Service increased its stake in Korea Kolmar from 10.52% to 12.68%, an increase of over 2 percentage points, according to the Q2 stake change disclosure filed on the 1st. During the same period, the pension fund also increased its Cosmax stake from 10.81% to 12.85%, indicating capital allocation across the cosmetics ODM sector where performance momentum has been confirmed.
The securities industry's raised expectations and the pension fund's buying activity are moving in the same direction.
Korea Kolmar Q2 Domestic Revenue Projected at 405.2 Billion Won
For Q2, Korea Kolmar's domestic standalone entity is projected to achieve revenue of 405.2 billion won, representing a 23.5% increase. Operating profit is forecast at 62.4 billion won, up 27.3%, with an operating margin reaching 15.4%. The projections are attributed to increased order volume for suncare and skincare products.
US Subsidiary Operating Loss Forecast at 11.1 Billion Won
However, the US subsidiary's performance remains an uncertainty factor for Korea Kolmar. Heungkuk Securities forecast the US subsidiary's operating loss at 11.1 billion won this year, down from 13.4 billion won last year. The US subsidiary's volatility in client order volume is cited as the largest loss factor.
Ultimately, the profitability gap between the high-margin domestic business and the low-capacity-utilization overseas business serves as a core variable in Korea Kolmar's performance.
Korea Kolmar Cites Global K-Beauty Demand Growth
Korea Kolmar stated, "As interest in K-beauty expands globally, global demand is increasing centered on suncare and skincare." The company added, "We expect continued growth as client companies' growth continues centered on the North American and European markets, and collaboration with global brands expands."
FAQ
What target price did Heungkuk Securities set for Korea Kolmar stocks?
Heungkuk Securities raised Korea Kolmar's target price from 88,000 won to 136,000 won, representing a 54.5% increase. The adjustment was based on analysis that the company demonstrates the typical profit structure of cosmetics ODM companies, with Q2 domestic revenue projected at 405.2 billion won and operating profit at 62.4 billion won.
Why did the National Pension Service increase its Korea Kolmar stake?
The National Pension Service increased its Korea Kolmar stake from 10.52% to 12.68% according to the Q2 disclosure filed on the 1st. The pension fund also increased its Cosmax stake during the same period, indicating capital allocation across the cosmetics ODM sector where performance momentum has been confirmed amid strong K-beauty export trends.
