[Click eStock] "Bonne, Benefiting from Growth of Indie Brand Cosmetics"

KB Securities analyzed on the 19th that Bonne is expected to benefit from the growth of the indie brand cosmetics market. No investment opinion or target price was provided.

Bonne operates its core businesses in cosmetics ODM and its own brand business. Since production is done through OEM, Bonne can be regarded as a cosmetics development specialist company. Additionally, it operates a household goods business through its subsidiary, 'Atosafe.' In the second quarter of this year, it achieved sales of 19.6 billion KRW and an operating profit of 1.5 billion KRW. Sales increased by 46% compared to the same period last year, and operating profit turned positive.

KB Securities explains that attention should be paid to Bonne, which is beginning to grow again alongside the growth of the indie brand cosmetics market. Jaeyoon Han, a researcher at KB Securities, stated, "Currently, there is a craze for indie brands in the United States, and although the total export volume of Korean cosmetics has not increased significantly, the performance of indie brands shows dramatic growth. After COVID-19, there has been a change in consumer purchasing behavior (expansion of purchasing channels), and in cosmetics, consumer preference is shifting from premium products to indie brand products promoted through social media such as Instagram."

He emphasized, "If the rise of indie brand cosmetics continues as it is now, ODM companies will inevitably benefit as well. Among them, the reason to focus on Bonne is that it is an ODM company capable of responding even to small initial order quantities."

He added, "Many new indie brand entrepreneurs are small-scale businesses due to the nature of their operations. They inevitably feel burdened by minimum order quantities, but in Bonne’s case, since it does not produce in-house, it can handle small quantities."

In particular, Bonne is expected to grow alongside the growth of new brands. He said, "Bonne is a company capable of increasing orders from existing customers due to market growth and acquiring new customers. It has a business structure that can grow in tandem with new indie brands, so we believe it has high growth potential."