[Click eStock] "Korea Kolmar, Synergy Expected from 'Yeonwoo' Acquisition... Both Investment Opinion and Target Price Up"

[Asia Economy Reporter Hwang Yoon-joo] Daishin Securities upgraded its investment opinion on Kolmar Korea from 'Hold' to 'Buy' on the 14th and raised the target price to 60,000 KRW. This decision was based on the assessment that the acquisition of Yeonwoo, the leading domestic cosmetics container company, has redefined Kolmar Korea's cosmetics business division.

Han Yoo-jung, a researcher at Daishin Securities, stated, "Through this acquisition, Kolmar Korea is expected to improve profitability by internalizing container manufacturing, while Yeonwoo will accelerate securing overseas clients."

Han explained, "In the long term, leveraging Yeonwoo's intellectual property rights and R&D capabilities will enable offering differentiated products to clients and enhance competitiveness in the cosmetics ODM (Original Design Manufacturer) market."

Kolmar Korea decided on the 13th to acquire 6.82 million shares held by Yeonwoo's largest shareholder and the spouse of the largest shareholder for 286.4 billion KRW.

Han noted, "Yeonwoo's main products are pump-type, tube-type, and sample-type plastic cosmetic containers," adding, "The cosmetics container market requires high technical skills and considerable time to establish relationships with clients, making entry barriers high."

He evaluated, "Yeonwoo holds the number one market share in the domestic pump-type container market and exports products overseas through its Chinese subsidiary and the US PKG Group. As of 2021, the domestic and overseas sales proportions were 56% and 44%, respectively."

Han added, "With Kolmar Korea's strengthened competitiveness, discount factors have been resolved," and "the target price has been raised by 20% from the previous level, and the investment opinion upgraded from 'Marketperform' to 'Buy.'"