[Click eStock] "CNC Inter, Full-Scale Sales Expansion After 4Q"

[Asia Economy Reporter Hwang Yoon-joo] NH Investment & Securities forecasted on the 16th that C&C International will fully enjoy the reopening phase from the fourth quarter through the first half of next year. No investment opinion or target price was provided.

Jiyoon Jung, a researcher at NH Investment & Securities, stated, "Consolidated sales for the fourth quarter are estimated at 37.5 billion KRW, a 62% increase compared to the previous year, and operating profit is expected to rise by 3325% to 6.9 billion KRW."

Sales from the Korean subsidiary are expected to increase by 60% to 31.4 billion KRW. The cumulative order amount for the third quarter this year rose by 70% compared to the previous year. Domestically, since April, the market has shifted into a full reopening phase, with continuous new product orders from client companies.

Researcher Jung analyzed, "Considering the average product lead time (3 to 6 months), the trend of already confirmed orders being reflected in sales through the fourth quarter and the first half of next year will remain valid. In particular, the sales proportion from North American clients (such as Rare Beauty, tarte) is steadily increasing."

The Chinese subsidiary is scheduled to start production at its Shanghai Plant 2 from December this year. Researcher Jung assessed, "With the expansion of existing production capacity (CAPA) from 23 million units to 55 million units, mid- to long-term sales of the Chinese subsidiary are also expected to approximately double."

He added, "Currently, about 80% of the Chinese subsidiary's sales come from Chinese brands, with online-focused color cosmetics client INTO YOU playing a key role. The Korean subsidiary is currently operating the Hwaseong plant at full capacity and plans to expand production capacity at the Yongin plant by the end of 2023 to diversify global clients and accommodate orders." This expansion will increase existing production capacity from 65 million units to a maximum of 140 million units, which is evaluated as beneficial for sales upside.