[Asia Economy Reporter Seungjin Lee] Cosmax, a cosmetics research, development, and manufacturing (ODM) company, recorded solid performance in the second quarter, driven by expanded exports to overseas markets including China.
Cosmax announced on the 11th that its consolidated sales for the second quarter increased by 13% year-on-year to 430.4 billion KRW, and operating profit rose by 68% to 43.9 billion KRW. Net profit grew by 89% to 26.1 billion KRW.
Cosmax explained that strong growth in its Korean and Chinese subsidiaries, along with improved profitability, contributed to the favorable results. In particular, despite a slowdown in market growth in China, the '6.18 event' effect and expansion of online clients helped the operating profit margin increase by 3.3 percentage points year-on-year to 10.2%.
Looking at each subsidiary, the Korean subsidiary recorded second-quarter sales of 230 billion KRW, up 10% from the previous year. While steady growth continued in the skincare and color cosmetics categories, the color cosmetics category stood out with a 17% year-on-year increase in sales.
The Chinese subsidiary’s sales grew 33% year-on-year to 171.4 billion KRW. Net profit increased by 79% to 19 billion KRW. The Chinese market was led by sales growth from online clients. Among the top 20 clients in China, 16 are online clients. During the 6.18 event, 13 of the top 25 best-selling color cosmetics products on 'Tmall' were produced by the Chinese subsidiary, accounting for more than half.
The Shanghai subsidiary achieved sales of 140.4 billion KRW, a 43% increase year-on-year. Online client sales surged due to the 6.18 event effect. The online sales ratio exceeded 65% in the first half of this year. The Guangzhou subsidiary recorded sales of 36.2 billion KRW, up 9% year-on-year, and net profit rose 41% to 3.4 billion KRW. The Guangzhou subsidiary also saw a significant increase in online sales, which accounted for 75% of sales in the first half of this year.
The US subsidiary’s consolidated sales for the second quarter were 34 billion KRW, down 12% year-on-year. Cosmax explained that recovery is being seen in basic products and some color cosmetics items, and efforts to reduce costs and control expenses have helped reduce losses.
Indonesia’s sales were 10 billion KRW, down 8% year-on-year. Although sales to local online clients increased, offline client sales remained sluggish due to the prolonged COVID-19 situation.
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