Despite COVID-19... Expected Performance of Permtek Korea This Year

[Asia Economy Reporter Hyunseok Yoo] Despite COVID-19, Pumtec Korea is expected to achieve strong performance this year.

According to the financial investment industry on the 27th, Pumtec Korea recorded consolidated sales of 47.5 billion KRW and operating profit of 6.6 billion KRW in the fourth quarter of last year. This represents a decrease of 7.8% and 2.3%, respectively, compared to the same period last year.

Kim Taehyun of IBK Investment & Securities said, "Sales fell short of guidance, but operating profit exceeded expectations," adding, "On a separate basis, Pumtec Korea's sales decreased by 8%, but operating profit increased due to improved cost structure." He also noted, "The subsidiary Buguk TNC experienced production downtime due to the relocation of production facilities following the completion of a new factory."

However, this year's performance is expected to improve despite COVID-19. IBK Investment & Securities forecast that Pumtec Korea's sales and operating profit this year will increase by 17.1% and 13.5%, respectively, to 230.5 billion KRW and 31.1 billion KRW compared to the previous year.

He explained, "With the easing of the COVID-19 situation due to vaccine supply, the domestic and international cosmetics market is expected to improve," adding, "Deliveries of cosmetic pumps and containers, as well as droppers and sticks, are expected to expand." He further added, "Sales of cosmetic tubes by Buguk TNC are also expected to improve, and sales of containers related to hair care products (such as hair dyes) are anticipated to continue strong."

Additionally, the health functional food company Jallon Natural, acquired last month, is expected to contribute to performance improvement. Pumtec Korea acquired a 60% stake in Jallon Natural. Researcher Kim emphasized, "Jallon Natural recorded sales of 10.6 billion KRW last year, and considering Pumtec Korea's consolidated sales of 196.8 billion KRW, it is expected to have about a 5% sales increase effect."

Moreover, Jallon Natural's marketing capabilities are also expected to be beneficial. He said, "Entering the high-growth health functional food market is positive, but Jallon Natural has strengths in influencer marketing through SNS," adding, "It is expected to expand its own brand-based business in cosmetics, daily necessities, and beauty products in the future."