[Click eStock] "VTGMP, Structural Reorganization for Focus"

Sangsangin Securities analyzed on the 2nd that VT GMP appears to be undergoing a structural reorganization to focus on its core business.

VT GMP, formerly the KOSDAQ-listed company GMP, has been operating various businesses including laminating, cosmetics, music planning, and bio by acquiring stakes in VT Cosmetic starting in 2017, GMP Bio in 2018, and Cube Entertainment in 2020.

VT Cosmetic, which was a subsidiary, was absorbed through a merger in 2019, and currently, the cosmetics division has become the main business accounting for the largest portion of consolidated performance (51% of sales, 80% of operating profit). Next, the entertainment business, which also has a high contribution, is showing high sales growth and a profit turnaround.

Researcher Kim Hyemi of Sangsangin Securities stated, "Other divisions are acting as negative factors in terms of growth or profitability, and the company plans to sell off the remaining businesses except for the core business," adding, "If the sale is successful within this year as planned, it is expected to improve profitability by eliminating loss-making businesses and to repay stock-linked bonds through cash 확보."

Additionally, Researcher Kim Hyemi explained, "The company's cosmetics sales in Japan are a major factor in performance improvement and will be a key investment point after the split," noting, "The Cica Line launched in 2018 gained popularity in China, generating 68% of cosmetics sales in China in 2020. However, with the prolonged COVID-19 pandemic and diversification of overseas expansion of domestic cosmetics, the company entered Japan in 2020, and as of last year, 76% of cosmetics sales and 83% in the first quarter of this year were from Japan."

He continued, "This year, as part of channel diversification, the company plans to further expand offline store openings and lay the foundation for continuous growth through the successful launch of a new product (Lidleshot)," adding, "The company's cosmetics business goal for this year is a 13% growth compared to the previous year and an OPM of about 15%. Considering the growth of the entertainment division and the resolution of other loss-making divisions after the sale, a positive stock price trend is expected."