[Click eStock] "Korea Kolmar, Short-Term Momentum Lacking... Target Price Down"

[Asia Economy Reporter Song Hwajeong] Daishin Securities evaluated Kolmar Korea as stable but lacking short-term momentum on the 24th, and lowered the target stock price from 56,000 KRW to 52,000 KRW. The investment opinion was maintained as 'Buy.'

Han Yujeong, a researcher at Daishin Securities, said, "The target price downgrade is due to a 7% downward revision of the 2020 operating profit estimate."

Kolmar Korea's Q4 performance last year fell short of expectations. On a consolidated basis, Q4 sales increased by 3% year-on-year to 389.4 billion KRW, while operating profit decreased by 30% to 27.8 billion KRW. Researcher Han explained, "Compared to the same period last year, sales of mask packs decreased and the domestic cosmetics market growth slowed, resulting in a 7% decline in standalone cosmetics sales, and a one-time cost of about 3 billion KRW was reflected, causing a significant drop in operating profit. Additionally, due to sluggish sales to major clients of the Beijing subsidiary and slow capacity utilization increase at the Wuxi subsidiary, combined sales in China only increased by 13%, and losses continued."

This year's performance is expected to show a low start and strong finish. Researcher Han said, "Sales this year are projected to increase by 10% to 1.6944 trillion KRW, and operating profit is expected to grow by 15% to 135.2 billion KRW. Due to the normalization of subsidiaries and the base effect from last year, attention should be paid more to the second half than the first half."