Why Does Cosmax Keep Raising Its Targets?

[Asia Economy Reporter Hyunseok Yoo] The target price for Cosmax is rising. This appears to be influenced by steady performance improvements and expectations that it will benefit from the With Corona phase.

According to the financial investment industry on the 20th, Cosmax recorded consolidated sales of 430.4 billion KRW and operating profit of 43.9 billion KRW in the second quarter. This represents increases of 13.5% and 67.5%, respectively, compared to the same period last year.

The securities industry evaluates Cosmax's performance as an earnings surprise. Soyeon Jeong, a researcher at Kyobo Securities, said, "This is the result of sales expansion and profitability improvement due to a strong turnaround of the Korean subsidiary and continued high growth of the Chinese subsidiary."

Orina, a researcher at Ebest Investment & Securities, also evaluated, "The main factor for the performance exceeding expectations is the strong performance of the Chinese subsidiary."

Since August, Ebest Investment & Securities, DB Financial Investment, Yuanta Securities, NH Securities, and others have raised their target prices, citing expectations that Cosmax's strong performance will continue.

In particular, the third quarter is also expected to record strong results. Hana Financial Investment forecasted that Cosmax's third-quarter consolidated sales and operating profit could increase by 9% and 41%, respectively, year-on-year, reaching 348 billion KRW and 20 billion KRW.

Jongdae Park, a researcher at Hana Financial Investment, emphasized, "The cosmetics industry has maintained favorable performance and stock momentum since the second half of last year as Chinese consumer demand recovered. Cosmetics benefited from the recovery of Chinese cosmetics consumption in 2021, and as we enter the year-end With Corona period, we can expect benefits from the recovery of domestic color cosmetics consumption."