[Click eStock] "Pumtek Korea, Gradual Recovery Expected"

Luxury Brand Orders Recover from Q4... Collaboration with Global Cosmetics Packaging Company HCP

[Asia Economy Reporter Kum Boryeong] An analysis has emerged predicting a gradual recovery for Permtek Korea.

According to Korea Investment & Securities on the 21st, Permtek Korea's cumulative sales for the third quarter amounted to 108.7 billion KRW, and operating profit was 15.4 billion KRW, representing decreases of 12% and 23% respectively compared to the previous year. In contrast, its subsidiary Bukook TNC recorded sales of 41.3 billion KRW and operating profit of 5.4 billion KRW, increases of 15% and 194% respectively compared to the previous year.

Na Eun-chae, a researcher at Korea Investment & Securities, stated, "The combined sales and operating profit guidance for 2020, including the subsidiary Bukook TNC, are 200 billion KRW and 27 billion KRW respectively. Thanks to the subsidiary consolidation effect, operating profit is expected to maintain the previous year's level. Bukook TNC has seen significant performance improvement due to strong demand for daily necessities and the start of pharmaceutical product deliveries. Production efficiency has improved through economies of scale driven by increased sales. Permtek Korea's core business is struggling due to domestic luxury brands facing difficulties amid duty-free store downturns, resulting in sluggish exports. However, as demand from China improves, luxury brand orders are recovering from the fourth quarter, and exports are also expected to gradually recover supported by a low base and North American demand recovery," she explained.

Permtek Korea is the second-largest domestic cosmetics container company following Yeonwoo. Last year, it posted sales of 175.4 billion KRW and operating profit of 26.9 billion KRW. It has secured major clients such as Amorepacific, LG Household & Health Care, and Est?e Lauder. By acquiring up to a 40% stake in tube container company Bukook TNC, Bukook TNC's performance has been reflected in consolidated results since the fourth quarter of last year.

Researcher Na said, "The upstream industry is passing the bottom, and growth driven by the subsidiary Bukook TNC consolidation effect and portfolio diversification into daily necessities and pharmaceuticals are positive factors. Based on collaboration with the global cosmetics container company HCP, we will also seek additional expansion," she added.