[Click eStock] "Cosmax NBT, Continued Annual Profit Growth Expected"

IBK Investment & Securities Report

[Asia Economy Reporter Minji Lee] IBK Investment & Securities forecasted on the 27th that although Cosmax NBT's profits are inevitably expected to decline due to an expanded deficit at its U.S. subsidiary in the first quarter, the expectation for annual profit growth remains valid.

For the first quarter, the company is predicted to record consolidated sales and operating profit of 75.2 billion KRW and 1.6 billion KRW, respectively. Sales are 8% higher compared to the same period last year, while operating profit is 25% lower. The Korean subsidiary's sales are expected to increase by 5.1% year-on-year to 56.3 billion KRW, with operating profit projected to rise 17.4% to 5.7 billion KRW.

Although the domestic market, which benefited from COVID-19 last year, faces a challenging base effect in the first half of this year, performance improvement is anticipated due to increased exports to China. The Chinese subsidiary also saw increased sales volume during the Lunar New Year period, and the Australian subsidiary is expected to experience growth in scale due to an increase in clients. IBK Investment & Securities analyst Taehyun Kim stated, “However, despite increased sales to major clients such as Dr. Kelian at the U.S. subsidiary, an operating loss of 5.5 billion KRW is expected due to the impact of handling poor inventory, making a company-wide profit decline inevitable.”

This year, consolidated sales are estimated to increase by 13.5% year-on-year to 328.5 billion KRW, and operating profit is expected to rise 63% to 10.5 billion KRW. The Korean subsidiary's sales and operating profit are projected to grow by 10.2% and 1.6%, respectively, to 234.6 billion KRW and 27.2 billion KRW. Analyst Kim explained, “During the second quarter, the launch effect of individually recognized raw materials related to joint health and the expansion of exports centered on Asian regions including China, Singapore, and Taiwan are expected. The Chinese subsidiary is also expected to improve sales and operating profit by 10.6% and 34.7%, respectively, due to new product launches in the second half.”

The Australian subsidiary is expected to record sales of 44.4 billion KRW and operating profit of 800 million KRW. Although losses will continue, the scale of growth is expected to be significant due to the influx of new clients. The U.S. subsidiary's sales and operating loss are forecasted at 48.7 billion KRW and 20.7 billion KRW, respectively, with expectations for profitability improvement through yield enhancement and product price adjustments remaining valid.