Hyundai Motor Securities reported on November 9 that while Korean Colmar continues to experience solid growth in its domestic cosmetics manufacturing business, the expansion of production capacity will be a key factor for future performance. The firm maintained a 'buy' rating but lowered its target price from 185,000 won to 160,000 won.
Ha Hee-ji, a researcher at Hyundai Motor Securities, analyzed in a report that Korean Colmar's consolidated revenue for the third quarter reached 828.2 billion won, a 21.3% increase compared to the same period last year, while operating profit rose by 40.4% to 81.9 billion won, although these figures fell short of market expectations.
The domestic business continued its robust growth. Revenue from the domestic subsidiary in the third quarter was 433.7 billion won, up 34.7% year-on-year, with operating profit increasing by 42.0% to 62.9 billion won. Despite some supply chain disruptions for packaging, the company achieved its highest quarterly performance, driven by increased orders from major clients and demand for sun care products.
Growth is expected to continue into the fourth quarter. Although revenue may decline compared to the previous quarter due to fewer working days, the domestic subsidiary's revenue is projected to increase by 43% year-on-year. Strong orders are anticipated to persist until the first half of next year, and the completion of the raw material plant in July is expected to alleviate production bottlenecks.
However, the overseas business has struggled. While the U.S. subsidiary saw a 122.2% increase in revenue, it continued to incur losses due to the recognition of approximately 2.5 billion won in inventory valuation reserves. The subsidiaries in Canada and China also reported losses. In contrast, the cosmetics packaging manufacturing subsidiary, Yeonwoo, achieved a 35.1% increase in revenue and returned to profitability.
Hyundai Motor Securities forecasts that Korean Colmar's consolidated revenue will reach 3.5666 trillion won and operating profit will be 416.1 billion won in 2027. The target price was calculated based on a 12-month forward earnings per share (EPS) of 10,173 won and a price-to-earnings ratio (PER) of 16 times.
Researcher Ha stated, 'With solid demand expected in 2027, we are exploring various methods to secure production capacity in the first half of the year,' adding that there are expectations for long-term growth due to increased production capacity in the second half and rising volumes from global clients.
* This article has been translated by AI.
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